The Missouri Solution: Market-Based Medicaid Transformation

No doubt you have heard in the news that Governor Nixon met with Republicans this week to promote his ideas for Medicaid and to intimate that he supports our efforts of true, positive, Medicaid transformation in Missouri.  The Supreme Court decision from last summer makes Medicaid expansion optional for the states. While he may promote flat out expansion at any cost, he was willing to consider support for a proposed plan for reform from House Republicans. We also agree that it should be Missourians, not the federal government, who make these pivotal decisions for our state.

The conservatively led Missouri House is committed to finding the best solution for Missouri. We will not jeopardize the best health outcomes for our neediest citizens nor will we risk the financial stability of our state by expanding a broken, unsustainable system to include 300,000 more people. We must fix Medicaid so that it provides access to quality health care for our most vulnerable citizens at a reasonable cost to taxpayers.
Medicaid has proven itself inefficient, and many recipients receive lower quality care than individuals with private insurance or even those with no insurance at all. Many doctors refuse to take new Medicaid patients because of low reimbursement rates. And because the current system lacks competition, there is no incentive to improve care or control costs.

The failures of the current system make it imperative that we enact actual, meaningful reforms rather than slap a billion-dollar Band-Aid on a broken system. If we are going to do what is best for Missourians, we must transform our Medicaid system so that it provides high quality care to those who need it most. This means taking a commonsense, conservative approach and transforming our system into a good investment that results in healthy, productive citizens.

As we undertake the challenge of transforming Missouri’s Medicaid system, there are several key components that are critical to making the system the high-quality safety net it was meant to be:

Encourage free-market principles and competition to lower costs. Give Medicaid recipients the power to choose the plan that best fits their situation.

Incentivize preventative care.

Promote price transparency to allow recipients to shop for the most cost-effective medical solutions.

Demand less federal oversight and more flexibility. Empower our state to adapt the program to meet the needs of Missouri’s growing population and an ever-evolving health care industry.

Reaffirm Medicaid’s original purpose: to serve as a safety net for our most vulnerable citizens – seniors, children, and the disabled.

Medicaid was never meant to provide healthcare to everyone. Rather than expand the pool of recipients who receive increasingly diminished services, we need to transform Medicaid into a system that ably provides the highest quality care to those who need it most.

House Republicans are currently exploring a market-based, transformative approach to Medicaid. It incorporates many of the components listed above. The bill, HB 700, sponsored by Rep. Jay Barnes would move private insurers into a position of greater competition to provide coverage for low-income Missourians. It would empower Missourians, turning recipients into participants who actively make health care decisions and not wait until their health care needs require the emergency room. This system has the potential to vastly improve quality of care while containing costs and reaffirming Medicaid’s role as a true safety net.

HB 700 is not the final solution to the Medicaid crisis, but it is a solid starting point. From here we can work toward a sustainable Medicaid system that can continue to meet our state’s needs for years to come. We will continue to monitor the innovative solutions proposed by other states. Arkansas, for example, is pushing for a system that would enroll those newly eligible for Medicaid into the same private insurance plans available to individuals and small businesses.

Regardless of how we proceed, in the end we are dependent on whether the federal government will grant us a waiver that empowers our state to transform our Medicaid system. The White House structured Medicaid expansion as a take-it-or-leave-it ultimatum when it comes to states getting federal dollars for the program. However, as the President sees more and more states refuse to accept the money along with all rigid federal requirements, we see a greater willingness to allow state governments flexibility to transform Medicaid as they see fit.

Governor’s Proposal Just Makes Things Worse

I glanced at the U.S. Debt Clock on Tuesday afternoon.  If each taxpayer in the country had to make a one-time payment to collectively pay off the federal debt, that amount would be $146,080.  So here is my question: “Do you have over a hundred thousand dollars you and your family do not need?”  Odds are you do not.  Democrats like to contribute our fiscal problems to a “lack” of revenue.  They tell you that they can solve so many problems if only they had more of your money with which to spend.  They then sell you the idea that Republicans are evil because we oppose mortgaging a collective generation of children’s – even grandchildren’s – futures for the sake of poorly run programs that do not even come close to solving the problems they were intended to solve.  One such program is Medicaid.
 

Old, Broken Medicaid

Have you ever heard anyone say that Medicaid is a good insurance program?  I have not and I am willing to bet you have not either.  Medicaid is such a terribly run inefficient program that one-third of doctors nationwide will not even take on new Medicaid patients.  Studies also show that Medicaid recipients have worse health outcomes than those who have private insurance.  There is even evidence that shows that on par, a Medicaid recipient is actually more likely to go visit the emergency room than someone who is uninsured.  This is the exact opposite of the intended effect the program is supposed to have!  Specialty care, which is expensive and often crucial to treating our medically underserved, is limited by Medicaid’s burdensome federal regulations and requirements.  When it comes to access and outcomes, Medicaid is failing.

This underlying truth is undeniable and uncontested.  Yet this is the program that Governor Nixon wants to saddle on to more than 250,000 additional Missourians.  According to the 2011 American Community Survey, 86.3% of Missouri’s citizens have some form of insurance.  With this expansion, we only improve the coverage to 90% - a mere 4% increase in coverage (assuming no one drops their private insurance for “free” healthcare) for a staggering cost to taxpayers of one billion dollars!  Common sense could not be more in our favor to reform this system to improve its operation, help people get well, and save taxpayer dollars. 

Unfortunately, this is not the plan Governor Nixon is endorsing.  Consider this: in the last four years as Governor, he has had the opportunity to try and change Medicaid so it actually helps people get well.  Instead, he has waited until his re-election before he jumped on the expansion bandwagon.  Thankfully, there are alternatives to the ill-conceived idea of growing this broken system.

Transformed Medicaid

Republicans and Democrats alike in places like Florida, Louisiana, Kansas, Texas, and Wisconsin have taken notice of Medicaid’s vast shortcomings.  Instead of just throwing more money at the problem, these states have offered realistic solutions.  With a pragmatic approach, they have instituted reforms that have promoted stronger patient outcomes, increased doctor participation, and reduced burdensome restrictions on care that can be given.  We can bring those solutions to Missouri and that is what we will be working towards this session.

The Right Thing To Do

Governor Nixon delivered his annual State of the State address this week, highlighting his newfound liberal stance on entitlement programs – specifically Medicaid.  He is advocating for a billion dollar increase in the Missouri budget to expand a broken program that is already filled with waste, fraud and abuse.  Auditor Schweich’s recently released audit proves the fact that welfare programs remain rife with improper spending and abuse.  Those are facts.  The Governor’s talking points, which certain liberal editorial boards have parroted across the state, are supposedly: 1) “It’s the right thing to do.” and 2) “It’s the smart thing to do.”  This is the depth of his argument.  For $1 billion of your hard earned tax dollars, I expect more details and you should, too.

I oppose the expansion of this entitlement and here’s why:

A.     The Missouri electorate has consistently reminded its government officials that they will not accept tax increases, do not favor ObamaCare, nor have they supported those who have promoted either.

i.       President Obama lost Missouri in both of his elections

ii.      Governor Nixon campaigned on no new taxes and never mentioned his support of ObamaCare in his re-election bid

iii.     Proposition C in 2010 overwhelmingly rejected ObamaCare to the tune of 70% of the vote

iv.     Proposition B in 2012 (less than 12 weeks ago) proposed a tax increase on cigarettes to support education programming – it failed 

B.     None of the politicians or advocates of the expansion have addressed how to pay for the expansion once Missouri’s share kicks in – an amount that will cost you and I hundreds of millions of dollars.  Next to spending on social programs, which comprises almost one-third of Missouri’s current $24 billion budget, education is our largest expenditure.  Our kids – our future job creators, employers, researchers – will see less funding per capita in the classroom if this short-sighted expansion moves forward. 

C.     An economic analysis of the impact of Medicaid expansion was released late last year, and some have taken these figures as gospel.  New jobs, they say.  New taxes from new spending, they say.  The problem with this analysis is glaring, but unreported.  It fails to account for where the money will come from and what the underlying impact of taking it out of your pocket will do to the economy.  This is not new money.  It is borrowed, and it will ultimately come from our taxpaying citizens and our businesses.  When they are forced to give the government money, they can’t spend it in the private sector, invest it in their own future, or save it for a rainy day.  Yet zero consideration for this huge, looming economic squeeze is given.  Let us not forget our federal government is making fiscal promises without passing a budget and by borrowing $0.40 of every $1.00. 

Governor Nixon may find it easy to just say “It’s the right thing to do,” but I’m here to make responsible decisions.  I’m here to be realistic and pragmatic.  Governor Nixon and his allies may feel comfortable trying to hoodwink the public into agreeing with their positions, but I’m here to be honest with you.

 

I will not support this short-sighted, bankrupt idea.  The right thing to do is to support limited government, better tax policy, and growth strategies that will encourage entrepreneurship and economic development.  The right thing to do is transform the Medicaid program to improve access, care delivery, and overall healthier outcomes. It’s not just the right thing, but also the smart thing to do.

Medicaid Transformation

Glancing at the headlines and editorials from around the state, it appears that a great deal of the discussion, at least in the political discourse, revolves around a proposed drastic expansion of the welfare entitlement of Medicaid.  In economic terms, the expansion will cost taxpayers billions of dollars over the next several years.  Although I remain committed to investing in our State’s healthcare system, especially for those who truly need our assistance:  our seniors, the disabled, the truly destitute and children who have no other resources; I am opposed to a rudimentary knee jerk welfare expansion proposal because I believe Medicaid should be be transformed.  Let’s take a quick snapshot at reality and set aside our ideological beliefs on the program for just a moment.

According to the Department of Insurance, Financial Institutions, and Professional Registration (they track all doctors licensed to practice in Missouri) there are 19,628 Doctors of Medicine (MDs) and 3,145 Doctors of Osteopathic Medicine (DOs).  According to numbers obtained from the Department of Social Services (they track the Medicaid program) only 88% of MDs accept Medicaid.  Amongst DOs, however, the contrast is even worse.  Of all DOs in Missouri, only 33.19% are even registered to accept Medicaid. 

Those who are in the field of healthcare are likely not surprised by this figure.  One reason is that DOs routinely perform certain forms of treatment that are not reimbursed by Medicaid – it is the nature of their methods.  But another cause is likely as follows:

Most MDs practice in larger hospital systems and in more urban areas.  There will be DOs at these hospitals, but you will find a much larger percentage of DOs practicing in our rural areas – perhaps with their own small practice – than in urban regions.  Our urban areas are also home to much larger populations of individuals and families covered by strong, private insurance policies.  These policies, along with the size of the larger hospital systems, allow the more urban facilities to leverage the profits they realize from private insurance carriers against the heavy losses they see when they care for individuals on Medicaid.  In many cases, our rural areas do not have this luxury – doctors in small, private practice shops literally cannot afford to accept Medicaid patients.

The ugly truth that lies within the Medicaid program is that it compensates providers at alarmingly low rates.  Often, this rate is barely above 50% of what the same provider would receive in payment from Medicare – the federal health insurance program for our nation’s senior citizens (and even that rate often cannot match private insurance).  Steven Lipstein, CEO of BJC HealthCare, alluded to the ramifications of Medicaid’s low reimbursement rate and its negative impact on healthcare costs in an article appearing on STLToday.com on January 15, 2013.  I would encourage you to read it – the link is below.

For these reasons and several more, simple Medicaid expansion, as President Obama and Governor Nixon have proposed, will only exacerbate a broken system.  Even worse, it costs taxpayers billions in borrowed money with no end to the unprecedented deficit spending in sight.  Let me reiterate: simply giving an individual a Medicaid card doesn’t ensure them access to care.  This is a fact.  And yet, that is the only solution the left has offered.  Your Republican leadership will actually propose innovative solutions to the healthcare crisis in our state.  Look to our members to propose ways to transform Medicaid and not just kick the can down the road and saddle your children with debt in the process.

To read the article mentioned above, please follow this link: http://www.stltoday.com/news/opinion/columns/why-medical-charges-appear-to-be-so-high-and-still/article_be563466-f91d-5db6-8ce4-c448f9a1d5ad.html