Thursday, November 25, 2010

Medicaid, Medicare, and the Mess

From a recent NEJM article there is an analysis of the upcoming health care plan implementation and the crisis which may likely result. As the article states:

Expanding health insurance to cover Americans who are currently uninsured, with the ultimate goal of improving access to care, is arguably the most critical objective of the recently enacted health care reform legislation. In large part, the success or failure of health care reform will hinge on the achievement of this goal.

The Patient Protection and Affordable Care Act (ACA) incorporates two strategies for expanding coverage. First is a mandate for all individuals to purchase insurance, coupled with the creation of state-based insurance “exchanges” and subsidies to help individuals whose incomes are below 400% of the federal poverty level to purchase coverage from private companies. Second is an expansion of Medicaid, underwritten by the federal government, to cover all adults whose family income is below 133% of the federal poverty level; children of families with incomes below this cutoff are already eligible for public coverage.

The chart above is from the article and depicts the percent enrolled versus the percent of the total population which is eligible under this new rule. This raises two key questions:

First, who is to pay for this and how? This adds a new and immediate burden on states which are already under one of the most severe budgetary states ever.

Second, and this is not trivial, what medical practitioners will handle this group? Physicians generally shy away from medicaid since the reimbursement is so low. Also there are just not enough physicians.

One need do just one simple calculation. If we see that now 20% of the population is eligible for Medicaid, and 18% is eligible for Medicare, then we have 38% of the population under a Government single payer plan already. With the 25% reduction in Medicare kicking in what are physicians to do. Add to that the demand for EMR technology which frankly does not meet the needs of almost any of the regular physicians, excluding the partisan enthusiasts dragged out to support the administration, we have the recipie for total disaster.

The short term growth from the same article is shown above. This is what should be of concern. The administration has implemented something which most likely will result in the collapse of the system as we know it.

The NEJM article concludes:

The impending Medicaid expansion will be the single biggest change in the program since its inception in 1965. The success of health care reform in improving access to care will largely depend on whether newly eligible individuals enroll in Medicaid and remain enrolled. Though the details of enrollment outreach, application processes, and renewal procedures may not be glamorous, they hold the key to success in expanding health insurance coverage to millions of needy Americans.

I disagree, the success is the ability to retain quality care and keep physicians in practice who are now well below any reasonable break even ratio.