Wrong approach: Medicaid rationing

Like other states staggering under the burden of bloated Medicaid’s payments, Wisconsin is rationing health care to ease its budget pain.
The Walker Administration, timid about real heath care reform, has chosen to increase premiums and restrictions for recipients, and that will result in an estimated 65,000 people being lopped off the program. That round of rationing will keep the state budget in balance.
Elimination of Medicaid red ink doesn’t have to be done that way. Bureaucrats could instead learn from what the private sector is doing to accomplish real reform and to contain costs.
They could follow the lead of many private employers, including health providers and health insurers for their own employees, and adopt consumer-driven plans. It is now past debate that the combination of higher deductibles and co-insurance and health accounts cut costs by 20% to 30%.
That huge saving happens without loss of coverage or medical attention.
The state would simply say to people eligible for Medicaid: “Here’s a $2500 health savings account for you and your family; it’s your money. Spend it wisely, because you have a $1500 deductible per family member.
Behaviors would change immediately. It’s the incentives, stupid!
No more would Medicaid people call 911 for a sore throat, demand a $1500 ambulance ride to the emergency room. Such abuses happen ALL THE TIME, to the enormous frustration of ER doctors and taxpayers alike.
That kind of reform would require a federal waiver, but you would think the feds, who pay for about 60% of Medicaid, would be more than happy to have Wisconsin experiment with keeping people on the rolls through an incentive-based strategy.
A second major lever on costs is proactive primary care. In the most effective models for health care delivery, primary care doctors are back at the center of the action. They are given the time to deal with chronic diseases and keep people out of expensive and dangerous hospitals.
As with consumer-driven health plans, the savings have been audited, and they are now beyond debate. One-third cost reductions can be accomplished.
The Medicaid cuts in Wisconsin and other states may have the opposite effect – reduction in support for community primary care clinics that serve the poor.
It should come as no surprise to anyone who can do math that access to health care and cost are directly linked. It’s an inverse correlation: the higher the costs go, the lower the access.
Ergo, the upward cost trajectory just has to be tamed. And it’s more about management science than political science and economics.
Politicians are seldom versed in management disciplines. So they have a hard time being pragmatic problem solvers. All their instincts as they seek reelection take them to sound bites and easy answers, like rationing.

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