Status of Health Care Access in America
Here are two provocative pieces (an op-ed from the New York
Times and an article from the Washington Post) about a health care crisis
unfolding before us while our attention is diverted to Iraq. The first piece
documents the problems faced by State Medicaid programs around the country,
which are being forced to cut programs due to state budget shortfalls. As we
try to expand access to long-term community based services and supports, and
implement Olmstead, this broader context of budget cuts is troublesome.
The second piece, an op-ed by the former editor in chief of the New England
Journal of Medicine, discusses the broader health care problem posed by
escalating costs and reduced access. The author advocates extending a
single-payer system like Medicare to cover all Americans so that money can be
saved on administrative costs. Much of today's health care costs, she says,
are due not to the price of health care itself but to administration and
insurer (as opposed to health care provider) profits.
Jonathan Young, PhD
JFA Editor, AAPD
States' Budget Woes Fuel Medicaid Cuts
By Amy Goldstein
October 11, 2002
The Washington Post
Oklahoma will mail letters soon to nearly 79,000 poor residents -- some
families that recently left welfare, others people who are disabled or old --
telling them that, as of March, they no longer will be eligible for Medicaid.
In Illinois, Medicaid officials last month began to require patients who need
a popular anti-depressant drug, Zoloft, to get tablets that are twice as
strong as they need, then break the pills in half.
And Missouri's Medicaid program last July stopped paying for adults to get
eyeglasses or for doctors to perform circumcisions on newborn boys.
Such cost-cutting would have been unthinkable a few years ago, but now it is
part of a contraction of the nation's largest public health insurance program.
All but nine states have taken -- or are planning -- steps to rein in Medicaid
expenditures this year.
Those decisions by governors, legislators and Medicaid administrators
underscore the pressures states are confronting in a weakened economy. Their
revenues are plunging, and increases in unemployment and poverty are prompting
more people to sign up for government help. Those pressures coincide with a
resumption of rapid medical inflation, particularly for prescription drugs.
As a result, states are reversing a trend that lasted nearly a decade. During
the 1990s, the federal government and states, which share responsibility for
Medicaid and the newer Children's Health Insurance Program (CHIP), added money
and changed rules so that public insurance programs could reach more Americans
who lack health coverage -- and pay for more kinds of care. The piecemeal
additions to government insurance have been the main method Congress used to
help lessen the problem of the uninsured after lawmakers rejected President
Bill Clinton's efforts to redesign the nation's health care system eight years
ago.
But in the changed fiscal climate, a new survey of Medicaid programs shows,
increasing numbers of states are dropping certain groups of patients,
curtailing some services, requiring poor people to help pay for their care,
limiting access to expensive drugs, and cutting -- or freezing -- payments to
hospitals, doctors, nursing homes and other providers of care.
"We are beginning to undo the expansions that have taken place," said Rob
Restuccia, executive director of Health Care for All, an advocacy group in
Massachusetts, where the legislature has decided to stop covering about 50,000
unemployed adults, added to Medicaid four years ago, as of next April.
The states' problems are spilling into Congress as governors and other state
officials lobby the federal government aggressively for relief. "Many of us
are dealing with the crisis," said Mike Fogarty, chief executive officer of
the Oklahoma Health Care Authority, the state's Medicaid agency. "We are
hopeful there will be a crisis response."
States are pinning their hopes on a plan, passed by the Senate in July, that
would temporarily increase federal Medicaid payments -- $6 billion over 18
months, although some senators are considering providing less. But the White
House opposes the measure. And asked whether the House would consider it, a
spokesman for Speaker J. Dennis Hastert (R-Ill.) said, "I don't think we are
doing it."
Medicaid, the public insurance program for Americans who are poor and
disabled, is expected to cover 47 million people this year, making it larger
and faster-growing than Medicare, the federal health insurance program for the
elderly. In Medicaid, the federal government supplies slightly more than half
the money -- currently nearly $150 billion a year in federal subsidies -- and
sets minimum coverage rules. States are free to offer extra services and
include more people. It is those options that states are now cutting.
In recent years, health care for the poor and uninsured has been a subordinate
political issue as the Bush administration and Congress have placed priority
on trying to provide prescription drug coverage for the elderly and
protections for Americans in private health plans.
"We've got to get Medicaid reform on the national agenda," said Ray Scheppach,
executive director of the National Governors Association. "Everybody says,
'We'll do it after Medicare,' but we don't ever seem to get Medicare done."
In the meantime, states' Medicaid cuts, which began to appear about a year
ago, are becoming more pervasive. The new study, sponsored by the Kaiser
Commission on Medicaid and the Uninsured, found that Oklahoma is one of 18
states that are tightening their eligibility rules in fiscal 2003, compared
with eight states in fiscal 2002. Similarly, the number of states trimming
services has increased from nine last year to 15, with cuts in dental care for
adults particularly common. In the most widespread strategy, 40 states this
year are trying to limit their expenditures on prescription drugs, by reducing
pharmaceutical payments or making it more difficult for doctors and patients
to select expensive medicines.
And in a departure from Medicaid's traditions, states are beginning to charge
patients small fees for services that used to be free. Delaware this month
began to require its Medicaid patients to pay $1 for the vans that take them
to hospitals and doctors' visits.
Medicaid programs throughout the Washington area are taking steps to control
their spending on prescription drugs, the Kaiser study shows, and Maryland and
Virginia also are curbing payments for certain health care providers.
The Connecticut legislature, which convened a special session last June on its
budget troubles, authorized elimination of a variety of services that are not
required under federal rules. As a result, Medicaid officials are working to
decide how to pare benefits for podiatry, vision care, certain mental health
services and treatment of speech and hearing problems. Michael P. Starkowski,
deputy commissioner of Connecticut's Department of Social Services, which
faces a $20 million to $30 million deficit this year, said the agency is
trying to "cut on the fringes" in order to "preserve the critical services."
Other states are halting expansions of coverage. Oklahoma canceled plans to
broaden its coverage for breast and cervical cancer. And last month,
California Gov. Gray Davis (D) vetoed a $50 million item in the state budget
that would have enabled 300,000 low-income parents to enroll in a public
insurance program that already covers their children.
In a subtler strategy, some states are curtailing recent innovations that were
designed to find more people who were eligible for public insurance -- and
make it easier for them to stay covered once enrolled. Delaware stopped an
initiative, which had been paid for through an outside grant, to publicize
Medicaid and CHIP, the children's insurance program, and to help clients fill
out applications. "We are accepting applications, but there are no more little
signs on the sides of buses that we used to have," said Philip Soule Sr.,
Delaware's Medicaid director, who has reduced agency staff and is preparing to
propose more cuts to the governor. "It's nuts to go out there and drag people
in if you can't even serve them or deal with them."
In a different strategy to curb enrollment, Indiana has changed its rules for
how long children remain covered. Children used to be able to stay on Medicaid
for a year at a time, regardless of whether their family's income went up
during that period. Now, their family has to report income changes right away.
Stringent as they are, the changes that states are making are likely to
preface still deeper cuts in the next year or two, Medicaid directors and
health policy analysts predict.
The Kaiser study shows that states have not brought their Medicaid programs
into fiscal balance: Medicaid budgets around the country are increasing this
year, on average, by slightly less than 5 percent, even though their Medicaid
spending grew last year by nearly 13 percent and their enrollment this year is
expected to increase by 6.3 percent.
Inadequate state budgets are not the only reason some states may need to find
further cuts. Parts of the health care industry are going to court to try to
obstruct state decisions that would cause them to lose money.
Indiana, which is cutting 10 percent from its Medicaid program over a two-year
period, began last year by lowering hospital payments by 5 percent, reducing
reimbursements to pharmacies and changing its method of paying nursing homes.
Nursing homes and pharmacists sued. Eventually, Indiana put the cuts into
effect, but the nursing home change took a year because of the litigation.
"Several of our hard choices are tied up in court, which means we are not yet
booking those savings," said Gregory Vadner, director of the Missouri Division
of Medical Services, which is facing four lawsuits by health care providers
and advocacy groups.
In the long run, many state officials contend, states lack the capacity to
absorb their Medicaid burdens on their own -- particularly for nursing home
care and services for the disabled, aspects of their programs that involve
relatively few patients but the greatest expense. "Increased participation on
the federal side is warranted," said Vadner, vice chairman of the National
Association of State Medicaid Directors. "All the states have been lobbying
for this, and lobbying pretty hard."
The Bush administration has been encouraging states to experiment with their
Medicaid programs -- using existing federal subsidies. Mark McClellan, a
senior White House health policy adviser, noted that the president's budget
last spring proposed $8 billion for the next three years to help states pay
for prescription drug coverage for elderly people.
But the administration does not favor giving states more Medicaid money to use
however they want. "We prefer to have something that focuses more on making
sure it addresses an important policy priority," McClellan said. "The urgent
policy priority is assistance with prescription drug costs."
http://www.washingtonpost.com/wp-dyn/articles/A9653-2002Oct10.html
Copyright (c) 2002 The Washington Post Company
The Forgotten Domestic Crisis
October 13, 2002
By MARCIA ANGELL
CAMBRIDGE, Mass. - If it weren't for the steady beat of war drums, health care
would be front and center in this fall's political debate. And war or no war,
politicians will not be able to avoid it much longer. As John Breaux of
Louisiana, long one of the most conservative Senate Democrats, recently told
the press, "The system is collapsing around us."
That is not hyperbole. Private health insurance premiums are rising at an
unsustainable average of about 13 percent per year - and as much as 25 percent
in some areas of the country. Coverage is shrinking, as more employers decide
to cap their contributions to health insurance plans and workers find they
cannot pay their rapidly expanding share. And with the rise in unemployment,
more people are losing what limited coverage they had. Last month, the Census
Bureau reported that nearly 1.5 million Americans lost their insurance in
2001.
The fatal flaw in the system is that we treat health care as a commodity. That
has been the case for a long time, but the effects were masked during the
economic boom of the 1990's. Now, with the recession, the irrationality of
that approach is exposed.
When health care becomes a commodity, the criterion for receiving it is
ability to pay, not medical need. Private insurers and providers compete with
one another to avoid getting stuck with high-cost patients, so they can keep
more of their revenues. But this game of hot potato takes a lot of oversight
and paperwork. In fact, the hallmark of the system is the extent to which
health funds are diverted to overhead and profits.
Look at what happens to the health-care dollar as it wends its way from
employers to the doctors and hospitals that provide medical services. Private
insurers regularly skim off the top 10 percent to 25 percent of premiums for
administrative costs, marketing and profits. The remainder is passed along a
gantlet of satellite businesses - insurance brokers, disease-management and
utilization-review companies, lawyers, consultants, billing agencies,
information management firms and so on. Their function is often to limit
services in one way or another. They, too, take a cut, including enough for
their own administrative costs, marketing and profits. As much as half the
health-care dollar never reaches doctors and hospitals - who themselves face
high overhead costs in dealing with multiple insurers.
One more absurdity of our market-based system: the pressure is to increase
total health-care expenditures, not reduce them. Presumably, as a nation we
want to constrain the growth of health costs. But that's simply not what
health-care businesses do. Like all businesses, they want more, not fewer,
customers - but only if they can pay.
All piecemeal attempts to improve the system - while keeping it market-based -
have run into the following dilemma: if access to services is expanded, costs
rise; if costs are lowered, access is cut. That's the way it is. The only way
to avoid this dilemma is to change the system entirely.
What we need is a national single-payer system that would eliminate
unnecessary administrative costs, duplication and profits. In many ways, this
would be tantamount to extending Medicare to the entire population. Medicare
is, after all, a government-financed single-payer system embedded within our
private, market-based system. It's by far the most efficient part of our
health-care system, with overhead costs of less than 3 percent, and it covers
virtually everyone over the age of 65. Medicare is not perfect, but it's the
most popular part of the American health-care system.
Many people believe a single-payer system is a good idea, but that we can't
afford it. The truth is that we can no longer afford not to have such a
system. We now spend more than $5,000 a year on health care for each American
- more than twice the average of other advanced countries. But nearly half
that amount is wasted. We now pay for health care in multiple ways - through
our paychecks, the prices of goods and services, taxes at all levels of
government, and out-of-pocket fees. It makes more sense to pay only once,
perhaps through a new tax on income earmarked for health care (in the same way
Medicare is financed through payroll taxes).
It is sometimes argued that innovative technologies would be scarce in a
national single-payer system, so we would have long waiting lists. This
misconception is based on the fact that there are indeed waits for elective
procedures in some countries with national health systems like Great Britain
and Canada. But that's because they spend far less on health care than we do.
If they were to put the same amount of money as we do into their systems,
there would be no waits. For them, the problem is not the system; it's the
money. For us, it's not the money; it's the system. We already spend enough
for an excellent universal system.
A single-payer system is not socialized medicine. Although a new national
program - like Medicare - would be publicly financed, the doctors and
hospitals would not work for the government, but would remain private. Some
fear onerous government regulations from a national payment system, but surely
nothing could be more onerous for patients and providers than the multiple,
intrusive regulations imposed on them by the private insurance industry today.
We live in a country that tolerates enormous disparities in income, material
possessions and social privilege. That may be inevitable in a free-market
economy. But those disparities should not extend to essential services like
education, clean water and air and protection from crime, all of which we
already acknowledge are public responsibilities. The same should be true for
medical care - particularly since we can well afford to provide it for
everyone if we end the waste and profiteering of our market-based system.
Marcia Angell, the former editor in chief of the New England Journal of
Medicine, is a senior lecturer in social medicine at Harvard Medical School.
http://www.nytimes.com/2002/10/13/opinion/13ANGE.html?ex=1035510517&ei=1&en=e9f2f8e633095dc9
Copyright 2002 The New York Times Company
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