◆ The American health care payment system is stuck in the mud–mired down by traditional ways of delivering medical services.
We can do better. Major, cost-effective technologies are available to be utilized.
It is unlikely that the Senate Republican factions will resolve their health care related legislative differences, although last-minute compromise is possible. Also, it is unlikely that Congressional Republicans and Democrats will bridge their ideological and political differences. The American public demands lower cost, effective, appropriate health care coverage.
Pragmatic economics, coupled with technology, is key because money to be saved by reducing Medicaid expenses can be used to provide increased health care coverage to the really Medicaid eligible, working Americans, and retired senior citizens.
This reality concept will be regarded as mean-spirited by the 45 percent of American adults who do not have full-time employment, and the 94 million people who have decided to remove themselves the job market, and their political supporters. Requiring work as the consideration for receiving Medicaid social benefits is not necessarily mean-spirited.
Why Obamacare Failed
◆ The Obamacare (ACA) health care law concept and implementation has failed because it has substantially increased health care premia and reduced coverage.
The Republican House alternative may be better than ACA, but it will be changed because the Republican Senate has three or more competing groups with conflicting approaches to health care legislation, none of which conform to the House version. A two-party compromise Senate health care bill is unlikely to be reached because Democratic senators will not vote for Republican health care legislation, and the likelihood of a good faith compromise is nil.
There is an impasse: a predicament affording no obvious escape. Meanwhile, the future health care of Americans is in limbo.
The solution is apparent, but unperceived: patient data collection by smartphone, and the acquisition of an available personal health care profile and its adaptation.
Nobody’s happy with the Republican proposals, either
◆ The most recent health care public polling suggests dissatisfaction with both parties’ plans.
For example, the Republican House bill, repeal and replace ACA, has only 16 percent approval.
The public approval of ACA and whether efforts should continue to repeal and replace this law are almost evenly split among the public.
Self-interested players in Health Care . . . with different goals
◆ The health care discussion arena is composed of numerous self-interested players. Their interests are often different.
Following are differing perspectives:
- Provide what the public needs, rather than what they want
- Older people use more than one-half of the health care money in the last few months before they die
- The younger generation believes that they are health infallible, and they do not want to pay for older generation and senior health care expenses
- What can the federal and state governments afford to pay for health care that competes with other national priorities such as road building and maintenance, education, national security, and military defense?
- Compassion for the health care underclass has financial limits: single-parent families, the disabled, many of whom could be employed part-time, and alcohol and drug addicts
- Many private health care insurance companies have and are canceling their participation in government sponsored health care plan coverage because of contemporary major losses and future financial uncertainty
- The fallback solution that may emerge may be a federal government single payer, rather than the private sector insurance
- Personal health responsibility: stay healthy and save money for oneself and for the government is not part of American culture
- High volume Medicaid provider hospitals provide high technology services that are duplicative and are expensive, although these devices are not fully utilized in many urban areas
- Primary care physicians correctly believe that they are under-reimbursed for the essential Medicaid services that they provide. As a consequence, many primary care physicians are leaving the practice of medicine, or they decline Medicaid patients because of the high volume of paperwork documentation that is required
Economics encompasses all of these issues: what can taxpaying citizens and their government afford, and what is the priority allocation among competing government services?
Although there are no easy solutions, we need to use the best technology currently available and some emerging ones, and supplement them by training a new generation of medical-technology providers.
Medicaid’s Explosive Growth, Explosive Costs
◆ President Obama’s ACA increased Medicaid eligibility to 133 percent above the poverty line. However this Medicaid increase was challenged in NFIB v. Sibelius, finding that it was state coercive, and that the federal government could not compel states to increase Medicaid eligibility.
The federal government pays states for a defined percentage of their Medicaid program expenditures. The Federal Medicaid Assistance Percentage (FMAP) varies by state based on criteria such as per capita income. The average federal payment made to states is 57 percent; 50 percent for wealthy states, and 75 percent for lower per capita income states.
The 1965 Medicare amendment to the Social Security Act established the Medicare and Medicaid programs. The concept of Medicaid is that it is a social health care program for families and individuals with limited resources and special needs that is funded by federal and state governments. States manage the program and they have broad discretion to determine eligibility and benefits. Medicaid eligibility is an ideological and political battleground. Reduction of people who receive Medicaid benefits is regarded as mean-spirited – an estimated decrease of 20 million Medicaid recipients by the year 2027. In contrast, there may be as many as 20 million Medicaid recipients who are not eligible.
An estimated 1/3 of people who receive Medicaid payment are able-bodied who can work in the public or private sector. This concept – “get off the couch and go to work” – is now enforced by some states which have passed “Workfare” legislation wherein able-bodied persons must work to qualify for social program benefits.
Back to the States to Cope with Costs
◆ Consider another proposition that places health care responsibility with states, rather than the federal government. States would receive a federal government payment, varying from 50 to 75 percent based on poverty eligibility levels. The states would have responsibility and flexibility to determine eligibility and the amount that they would pay for Medicaid expenses. The federal government responsibility would be to audit state health care payments to be certain that health care money provided by the federal government would not be diverted to other state programs. The advantage of total state responsibility would be administrative control, program efficiency, adherence to strict eligibility enforcement, and the political choices to be made by state citizens, that would vary by state.
Economics drives political and social policy decisions because funding for Medicaid health care is finite. The FDA has provided an exception to the spiraling cost of Medicaid by reducing the cost of prescription medicine for patients. Many drugs do not face competition from cheaper generic alternatives even though their intellectual property protection rights have expired. When there are two or more generic competitors the drug cost to consumers drops by about 50 percent, saving consumers an estimated $250 billion dollars. Economic competition in medicine can result in major cost savings. The issue is whether economic cost saving and program efficiency can compete and overcome political differences.
Conclusion: Looking Forward
◆ Look to the future of medicine and health care. Hardware and software permeates all sectors of health care, but it has not been applied in medical practice. Sensors, imaging, patient genetic history, artificial intelligence, and home health monitoring, if used nationally, can retard or reduce the $3 trillion annual health care expense.
US health care is the primary responsibility of doctors and hospitals that have made marvelous contemporary advances in patient diagnoses and care. The future improvement will be to exponentially advance contemporary health care by focusing on available, cost-effective technology.
This is an opportunity to create a new, innovative profession: data-based health care consulting, with or without traditional M.D. degrees; and for medical schools to adopt emerging technology in their curricula.
Richard Friedman worked on Medicaid and Medicare cost containment for the US Department of Health, Education and Welfare 1974-76 when these programs were 9 percent of GDP – now at 18 percent. He has provided legal representation to hospitals and physician groups while in the private practice of law.