Reforming Medicaid

How To Reform Medicaid

Joseph Jarvis, The Salt Lake Tribune
First published February 4, 2012

Public education led all other issues at the Legislative Policy Summit 2012. One of the sponsors of the gathering, a business group calling itself Prosperity 2020, emphasized that “Education is the path to enduring prosperity.”

Three years ago, the McKinsey consulting firm published a study entitled “The Economic Impact of the Achievement Gap in America’s Schools.” The researchers found that while American fourth-graders compare well on global tests, those who are age 15 rank 24th and 25th, respectively, in science and math, among 30 industrialized countries.

They concluded that “the longer American children are in school, the worse they perform compared to their international peers.” Because we have fallen behind in education, the researchers estimate that the U.S. economy is about $2 trillion poorer in annual gross domestic product.

Since at least 1983, with the publication of the federal report A Nation At Risk, we Americans have been aware that there is a “rising tide of mediocrity” in American education. Why does nothing seem to change?

One answer came from the Chair of Prosperity 2020, Mark Bouchard, who said that Utah was failing to fund public education at the level needed because Medicaid costs are robbing the state of the needed funds.

We waste $1 trillion annually on inefficient and poor quality care. One of the costs of that waste, much of which comes from tax revenues to support public health programs like Medicaid, is the lack of adequate money for public education. That is particularly true in Utah, where we have the lowest per-pupil expenditure in the nation.

Much has been said about the Medicaid reforms passed last year by the Utah legislature. The major feature of these reforms, accountable care organizations will have us repeating the mistakes of the past. ACOs are nothing but managed care with a different acronym. Utah tried Medicaid managed care during the Leavitt administration and failed to realize any savings.

Two years ago, the Utah Healthcare Initiative proposed radical changes to the way we do Medicaid. These proposals are not popular because real reform of health care business practices is opposed by those who profit from it. But with an urgent need to improve public education, there is need for some heavy lifting.

Let’s begin with Medicaid. Here is a list of seven reforms that would save hundreds of millions of taxpayer dollars over the next 10 years:

1) Millions of Utah tax dollars are being spent on administrative expenses for Medicaid managed care. This program can be eliminated without any impact on essential services to Utah’s medically needy and the health care providers that serve them.

2) Millions of dollars are wasted annually on excessively high pharmaceutical costs because the already existing Medicaid preferred drug list is too limited in its application in Utah.

3) U.S. health care financing, including Medicaid, routinely pays for inappropriate care. Establish a Medicaid Benefit Commission this year with authority to identify commonly performed medical/surgical interventions which have little or no clinical science behind them. Second, adjudicate medical malpractice claims for Medicaid beneficiaries without punitive damages or jury trials.

4) Reduce obstetrical and newborn care costs paid by Medicaid through rewarding high performing hospital practices, which reduce elective inductions and the related unnecessarily higher rates of c-sections and NBICU admissions. And increase eligibility for post-natal contraceptive services for women delivering babies financed through Medicaid.

5) Reduce use of long term care services through better financed home health care delivery.

6) Develop improved quality care strategies for high cost Medicaid financed chronic health problems.

7) Develop a statewide hospital injury prevention program.

Joseph Jarvis is a physician and chair of the Utah Healthcare Initiative.