Governor Bentlley and the state legislature agree that they do not like the open-ended nature of our state’s health care obligation to the poor. The state’s policy makers are debating (actually, posturing may be a better description) accepting the Medicaid expansion offered through the ACA that would open up Medicaid to those with household incomes up to 133 percent of the poverty level or about $31,000 for a family of four. The federal government would pay 100 percent of the cost of services for new enrollees for the first three years, but that eventually would drop to 90 percent.

Governor Bentley said “that he would not expand Medicaid “as it exists under the current structure.”

“It’s a broken system. It’s a totally broken system right now. It is not working well, not only in Alabama, it’s not working well anywhere,” Bentley said this week.

Predictably, the legislature is divided into the pro and anti expansion factions with the Democrats taking the pro as House Minority leader Craig Ford stated

“He should know better being a physician,” Ford said. “We’ve got a lot of people without insurance in the state of Alabama.”

and the Republicans the anti

Speaker of the House Mike Hubbard, R-Auburn, said this summer that the 90-10 match is not a bargain if ”you can’t afford the 10.”

Part of the problem is that the policy makers are looking at an unpredictable (and ever increasing) cost that they see as having little ability to control. Medicaid provides for care in a “fee-for-service” model in Alabama, meaning that when folks become eligible the state pays the bills. The state gets a Medicaid bill and pays it. Without coverage dictated by income and private insurance for those not on Medicaid, state has no control over who it might have to care for. Consequently, for the major categories of people it must now care for, the costs are unpredictable (Data from this paper and this website unless otherwise stated):

  • Nursing homes- Two-thirds of nursing home stays are paid for by Alabama Medicaid. Eligibility is determined by inability to provide a certain level of care for oneself and not having any resources. The state of Alabama has little contact with those who might be eligible and cannot at this time provide alternatives to nursing home care to those people. Thus, under the current structure, the system rewards allowing people to get so sick they need to be in a nursing home, and almost all nursing homes are dependent on Medicaid at some level. We spend 61% of our Medicaid long-term care dollars in nursing homes, compared to 41% on average in the rest of America. The elderly are currently 13% of the enrollment and 26% of the cost.
  • Maternity care – a little more than half of all maternity deliveries are already paid for by Medicaid before any expansion takes place. No woman who has not been pregnant and is not currently disabled is currently Medicaid eligible in Alabama, even those with $0 income. Many people with an income above $0 but below 138% of the poverty line are employed in jobs that have no health coverage. I have cared for many women who first get care for their diabetes, hypertension, or asthma as a consequence of finding out they are pregnant and Medicaid eligible. An unplanned (due to lack of access to safe and effective contraception) pregnancy complicated by one of these chronic conditions is much, much more expensive than even a “normal” unplanned (due to lack of access to safe and effective contraception) pregnancy. Adults are 16% of the enrollment and 8% of the cost.
  • Care of children – Alabama has historically taken advantage of opportunities to deliver health care to its children. As a consequence, only 6% of Alabama’s children do not have health care coverage.  Part of our success is that more than 40 percent of the state’s children are covered through Medicaid. Alabama offers coverage to 133% of the federal poverty level (FPL) through age 9 and offers CHIPS eligibility to 300% of the FPL. Health insurance isn’t everything. We rank 37th in children’s health measures but we are able to work to improve these as a result of our almost universal coverage. While these children are an “open-ended” obligation, they are very inexpensive to care for if done correctly. Children currently are 49% of the enrollment and 29% of the cost.
  • Adult chronic illness (disability) – 15.5% of Alabama’s population between the ages of 21 and 64 is disabled. This entitles them to Medicaid eligibility in addition to Medicare in most cases. Only 10% of all Americans in this age group are disabled. Alabamians report an average of 1 full day of limited activity per month above that of the average American. Having cared for a number of these people who on disability, it is clear that inattention to chronic conditions such as hypertension, diabetes, obesity, smoking, and others have led to the final illness that “qualified” them for disability. In addition, many of people have a coexisting mental condition that contributes to their disability but often escapes notice. Inattention to these also leads to decreased productivity and workplace disruption. The disabled are 22% of the enrollment and 37% of the cost.

And the one it doesn’t have to care for:

  • Adult and sub-acute illness – In Alabama, unless you are in a nursing home, pregnant or a single parent in a family with young children, or on disability, you are not a “cost” to Medicaid. However, Alabama has an access crisis for all of her citizens. We have 8 counties with no hospitals, 35 counties that provide no obstetrical care, and there is only 1 county that does not include a medically underserved area. Alabamians are more likely to die of influenza, pneumonia, heart disease, strokes, notor vehicle collisions, and have a shorter life span than the average (or indeed most) Americans. This is because not only are we spending a lot of money in the wrong places, we are not spending enough money in a manner that would allow a better care delivery system to grow and flourish. The hospital is not the optimum place to go for a flu vaccine. If there is no one delivering care in a county because the care delivery system is broken beyond repair, there is nowhere to go for a flu vaccine or to receive life saving care for severe influenza, either.
  • Coordination of care – In Alabama, doctors get paid a lot of money for doing stuff to people. Coordinating care would mean elimination of duplicate tests, reduction of unnecessary re-admissions to the hospital, elimination of unnecessary physicians visits, and moving care into the most appropriate setting. Alabama has started doing some of this (a description is found here) but we are not doing enough nor are we doing it as well as we could.

If you have not heard of the story of the community by the river and the babies floating downstream, I refer you to this version. The question for the villagers is always how to best deploy their assets. Do they stay and catch babies or do they go upstream and find the baby source, perhaps risking some babies floating down in the interim. Medicaid was created as a sick people catcher, a way to partially reimburse doctors for caring for the sick poor who showed up in their offices and hospitals. In the interim, it has become the primary source of payment for pregnancy care and childhood illness care. It only catches sick adults after the harm of chronic illness cannot be undone. It doesn’t catch poor sick adults who, while working, are too poor to purchase health coverage.

While catching babies is inefficient and ineffective, we still need to pay some folks to stay here and catch them. Meanwhile, let’s use the expansion and other programs made available through the Affordable Care Act to go upstream. Let’s keep people from becoming disabled, keep babies from accidentally being born to women who cannot carry them to term, keep people out of the nursing home, and work to improve our child health standings. The answer to my question, therefor, is we spend both too much and not enough. Let’s spend Medicaid money more wisely to make Alabama’s health system work better.

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