Taking A Big Picture View Of Healthcare And Medicaid Expansion
This week Governor John Kasich criticized President Donald Trump’s move to cut subsidies to health insurers to defray some of the cost of healthcare.
Kasich told NBC’s Meet the Press that the move would ultimately hurt people who won’t be able to afford coverage.
KASICH: “We actually anticipated that these payments would not be made. These companies are going to take this hit for the first two or three months. But for the next year, they anticipated that these payments would be cut. We always budget conservatively and plan conservatively. But over time, this is going to have a dramatic impact.”
Healthcare has been a key issue for Kasich, as he defends Medicaid expansion under the Affordable Care Act.
Next year’s gubernatorial election could see Ohio take a drastically different path, especially as the President and Congress continue efforts to dismantle the ACA.
Earlier this month I moderated a City Club panel discussion about healthcare at the Happy Dog on Cleveland’s west side.
Experts aimed to put our healthcare system and the current debate in a global context. Joseph White is a professor of public policy at Case Western Reserve University, and he said what we have now…is not the best.
WHITE: “As a general point if you had to just look at metrics the United States probably has the worst healthcare system among advanced industrial countries. Now there’s probably some exceptions to that, some other metrics you could use. But in general, we’re not doing very good.”
One of the ways to measure how well a healthcare system is doing is by seeing how many people are covered, but also how many are not treated, and perhaps die, by conditions that are treatable.
This happens in other countries as well, but Case health finance professor J.B. Silvers told me this is a particular issue for the U.S.:
SILVERS: “We’re worse at it than most others, for a whole variety of reasons. Yes it happens elsewhere, but more frequently here, probably more than anything because of the complexity of our system, and the diversity of the population. If you look at healthcare, probably the worst pre-existing condition is poverty, and poor people that live in bad conditions don’t do very well. Even if they manage to get into a hospital—and we do require hospitals to stabilize folks—even if they get into a hospital, they get discharged out into that environment and then they don’t do very well. We’ve got a lot of sociodemographic issues that we have to pay attention to as well as the direct delivery problems.”
Our discussion on global healthcare included mention of the importance of preventive care as part of some systems around the world, and to a degree in the U.S., too—it’s usually cheaper to get out ahead of conditions before you have to pay to treat them, including drug costs.
But one reason the U.S. system is so expensive, according to Professor White, is because of mismanaging costs.
WHITE: “If you compare countries in terms of percentage of the Gross Domestic Product spent on healthcare by the government, the United States is the sixth or seventh most in the world. It’s just that we’ve managed to mis-control costs so badly, that it’s not enough. The second thing is that if you talk about paying a portion of the hospitals’ costs, there’s substantial reason to suspect that hospitals will spend any money they can get. It’s not at all clear that if employers only paid 110% of the current supposed costs, maybe the costs would go down a bit. The Medicare calculations that are used in deciding what Medicare will pay are to some extent based on what notions of what it should cost…”
Here is where many other advanced economies diverge from the U.S. system, in which the government regulates and dictates costs on a broad scale.
Prof. Silvers gave a local example of hospitals not necessarily having to spend as much, if they won’t be paid as much.
He pointed to Medicaid expansion under the ACA, which Ohio did not enroll in the first year.
So Metrohealth looked to another solution to insure more people:
SILVERS: “The first year, John Corlett was the chief government person at Metrohealth, he worked with the state to take the county subsidy that goes to Metro—which is about $30 million—and run it through the Medicaid program with a waiver, so that we were able to insure 29,000 people in Cuyahoga County that otherwise would not have been insured. These are working people, but above the Medicaid normal level but below the insurable level from the exchanges. Those were people largely that Metro was already taking care of. They were just taking care of them on a sliding scale where they only got a very small fraction of the total payment that they’d like to have had if they’d been able to be paying customers. Actual expenditures were, I believe, 29% less than the state and the federal government thought it was going to cost to insure those people. Now why is that? One they were already in organized care—they were going to medical homes, they were being treated by docs at Metro. And there was no incentive for Metro to spend any more than they had to for those people, but the quality levels were still high. They weren’t getting paid more, so they didn’t spend more.”
Silvers says that showed if you don’t have the money, you can still cover more people.
CORLETT: “One of the things I took away from my experience with Metrohealth was when we improve quality, we actually lower costs. We keep people healthier.”
This is John Corlett, who is no longer at Metrohealth…but now heads the Center for Community Solutions:
CORLETT: “Prior to the Affordable Care Act, and Metro sort of early expansion of Medicaid in Cuyahoga County, and then the state’s expansion of Medicaid—I think the system largely failed people without insurance. We know they had much worse health outcomes. We know they had chronic diseases they weren’t able to control, that they lost jobs because they weren’t able to work. There was a lot of really bad outcomes from when we didn’t have coverage. One of the things that we learned at Metrohealth, and I think the state of Ohio has also demonstrated, is that when you manage people’s care, you get much better outcomes, particularly people who have chronic diseases, because in the prior world people’s care wasn’t managed at all, and what we found was people showed up usually in the most expensive setting—a hospital emergency department—and their care was never really coordinated. The same person could go to three or four different hospitals, they didn’t even know that person had been to three or four different hospitals, and their care wasn’t managed very well, so we had really poor outcomes and really expensive services.”
GANZER: “You don’t have a crystal ball, but it seems like every time another healthcare bill is presented in Washington, and then it looks like it’s not going to pass, we’re left with question marks about what’s going to happen to the system? What’s going to happen in Ohio, to Medicaid expansion? Do you have any thoughts on where you think it’s going, especially for Ohio?”
CORLETT: “I think Ohio is really going to be at a crossroads this next year. We’re going to choose a new governor. As you pointed out, Governor Kasich has been very supportive of the Medicaid expansion. It’s not clear that whoever succeeds him will be as supportive, so I think state policy makers are going to face a series of difficult questions about Medicaid and about healthcare in general. I would hope that they would focus on looking at ways to improve quality in the program, make sure people are covered, look at the outcomes—focus on the health outcomes, and not on trying to just sort of slash the program and cut hundreds of thousands of people from their health insurance.”