It seems to me that there is no good reason for Medicare and Medicaid to be two separate programs. Housecleaners are surely no less deserving of decent medical care than Palm Beach retirees, yet we arduously separate the two programs so as to lavish extra care on the more affluent class of beneficiaries. It's no good saying that the Medicare recipient earned theirs through contributions, because they didn't--people in the system now are net beneficiaries, not contributors. It's just that on average they're whiter, they speak better English and their subsidized lifestyles are considerably better upholstered. I'm not sure why any of these entitles them to a better grade of publicly provided healthcare.One study published in the Journal of the American College of Cardiology (2005) found that Medicaid patients were almost 50% more likely to die after coronary artery bypass surgery than patients with private coverage or Medicare. The authors suggest this may be a result of poorer long-term, follow-up care. Like other similar studies, this one tried to control for the other social and medical factors that are believed to influence patients' clinical outcomes.
Another study in the journal Ethnicity and Disease (2006) showed that elderly Medicaid patients with unstable angina had worse care, partly because they were less likely to get timely interventions or be treated at higher quality hospitals. Three other recent studies showed that Medicaid patients presenting with heart attacks or unstable angina received cardiac catheterization less often than Medicare or private paying patients. This procedure to open blocked heart arteries has become standard care, with ample evidence showing it improves outcomes.
The same trends can be observed in other diseases. For example, a study of adults with cancer published in the journal Cancer (2005) found that patients on Medicaid were two to three times more likely to die from the disease even after researchers corrected for differences in the location of the tumor and its stage when diagnosed.
The federal and state governments are equally culpable for the program's troubles. The federal government matches state Medicaid spending, paying an average of 57% of costs. States expand enrollment in order to qualify for more federal aid. Insurance coverage has become the end itself, with states spreading resources widely but thinly -- without enough attention to the quality of care, accessibility, or whether coverage was actually improving health. States have no obligation to rigorously measure health outcomes in order to qualify for more federal money.
* One of my favorite doctors was running a Medicaid mill, which I faithfully patronized when I was uninsured. She was charming, caring, and merrily full of ways to help me milk the system, which I had to politely turn down and pay her in cash. Given the reimbursement schedule Medicaid offers, I couldn't blame her a bit.
PR. My grandmother, may she rest in peace, would get outraged and offended if I accidentally slipped and referred to her coverage as "Medicaid" rather than "Medicare" in talking with her. One was welfare, while the other was earned by all those Medicare withholdings from her paychecks over the years.
This raised a big question in my mind: Given the studies that have shown little effect to having medical coverage at all, do we know that the difference in outcomes is caused by less payment?
A couple alternative guesses that seem plausible are:
a. There are other differences between medicaid and medicare patients that weren't controlled for in the studies he quoted, but that have some important impact on health outcomes. I believe income, IQ, education, ethnicity, and social class all have correlations with health outcomes, and also (mostly in the other direction) with being on Medicaid. (I'm curious how they dealt with the difference in ages in the patients, which seems like it would be a big problem in evaluating quality of care, but also which seems like it would make Medicaid outcomes look better than Medicare outcomes, not worse.)
b. The choice of doctor is more important than the amount of care consumed. If we assume that doctors who take Medicaid patients are in general lower quality than doctors who don't, then being in Medicaid may lead patients to start regularly seeing a lousy doctor. Then, when they go in for treatment, they will presumably get less effective treatment, more medical errors and complications leading to them dying or getting worse instead of better, etc. I seem to recall some previous research along these lines, too (involving black patients generally getting worse quality medical care, due to the subset of doctors they saw). But I am probably jumbling the details of that in my head--anyone know more?
"It's just that on average they're whiter, they speak better English and their subsidized lifestyles are considerably better upholstered."
Err... and there are more of them than the Medicaid recipients, and they vote more often.
Yep, keeping Medicaid and Medicare separate makes no sense from a medical perspective, but all kinds of sense from a political coalition-building perspective. Old folks are *much* more politically powerful than poor folks.
Because we are self-employed, we have no traditional, employer-based group plan health insurance.
So we purchase a high-deductible plan ($5,000/person); mostly to protect our home and investments should one of us experience a catastrophic illness. We do this fully expecting to pay out-of-pocket for most, if not all, of our medical care each year.
The treatment we receive from the medical community is probably not that different from what medicaid patients receive -- lowest common denominator. I have to carefully remind providers that I am able to pay for their services, happy to pay, and will pay on a much-more timely basis.
The disturbing thing is what the insurance company won't allow, even though they're not paying for it. All this for several hundred a month, to boot.
I can see why folks would bilk the system; gotta pay for all that staff filing paperwork and deciding what to pay, what not to pay, while not providing one bit of medical care to anyone.
You're writing as though Medicaid is the system for the poor and Medicare for the wealthy. Those "housekeepers" will go on Medicare when they reach 67 and have the same health care as the "Palm Beach retirees." Until then, we expect people to purchase their own health care as they do cars, housing and food. The notion that those on the dole (i.e. those who get their necessities from the public trough) don't have it as good as those who purchase it for themselves isn't unique to health care. But comparing Medicare and Medicaid recipients shows a fundamental misunderstanding of the roles those programs pay in society.
The difference between someone on Medicare and someone on Medicaid is very simple:
The care provided by Medicare is funded by people who have been paying into the Medicare Ponzi scheme for decades.
The care provided by Medicaid is also funded by people who have been paying into the Medicare Ponzi scheme for decades.
For those on Medicaid, I suggest taking advantage of a unique American social program that my father came to this country to exploit. It's called "work hard and get a job". Millions of immigrants with little money manage to secure themselves lifelong payouts from this lucrative social program. Perhaps you can too!
Zic: and you didn't even mention the ridiculous cost inflation from the "negotiated discounts" that insurers use as a selling point for their services. There was also something about providers not being to advertise (or even offer?) lower cash prices than those they submit to insurers... not sure of the details. Taken together, this looks like a blatant violation of antitrust.
Of course decent doctors WOULD quietly give the cash-paying patient the same and better discounts. But they apparently have no way of competing on price...
For the life of me I cannot understand why can't medical insurance be treated in the same way as all other kinds of insurance -- a purely financial service without any special legal treatment.
The big reason why they can't simply be consolidated, I think, is that Medicare is a federal program whereas Medicaid gets up to half its funding from the states (and sometimes local governments).
Medicaid also covers some things that Medicare does not. IIRC, Medicaid has always paid some part of prescription costs.
"The notion that those on the dole (i.e. those who get their necessities from the public trough) don't have it as good as those who purchase it for themselves isn't unique to health care."
Medicare and Social Security are just forms of welfare that politicians (who use them to buy votes) and the recipients (whose votes are bought) don't want called welfare.
For about three years, I had a next door neighbor who had a practice in Johns Hopkins Hospital, which was odd and sort of banged through my skull that doctors rarely move, he was living in NJ for his wife's job, who was also a doctor who ran FDA drug trials for big pharma while he commuted to Baltimore and was only home on the weekends.
His practice was mostly Medicare patients, and as far as gaming the billing system, Medicare isn't any different than Medicaid, though just from scuttlebutt, there is a difference in degree. Since he was at JHU though, he saw patients from all over, and also had the problem that Medicare pays differently based on where one lives, which made people from places like Kentucky close to charity cases for him. He liked NY patients much better.
Billswift,
I understand your point, but I think they're different in that at some point we ALL get them.
Medicaid, like welfare, is needs based. We only get them if our income is below a certain amount.
For instance, the "housekeeper" on Medicaid gets Medicare when he/she retirees. The "Palm Beach retiree" (note the use of stereotypes) will likely never get Medicaid.
Obviously, we need to spend much more on Medicaid than we do.
Re: competing on price--
While healthcare providers can set whatever rates they like for self-pay patients, thus allowing for a minimal degree of market economy --"minimal" because cash healthcare costs for anything but basic services are well out of the price range for about 90% of the population, forcing providers to charge on a sliding scale or write off losses--they may NOT lower, much less advertise lowering, out-of-pocket rates for insured patients. To do so would be considered a kickback, since it increases the moral hazard damage to the insurer: if I say I will never charge a copay to any patient, thus drawing more patients, my leverage against insurers increases regardless of the value or quality of care provided. I'm basically considered to be paying patients $25 (or whatever the copay is) to visit me so that I can sock their insurer for full price. This is breach of contract with private insurers and a violation of federal law if practiced with Medicaid/Medicare patients.
Of course, since providers can't compete on price, and insurers determine what patients pay where, insurers have more or less total power over all but the most renowned physicians/hospitals when it comes to determining reimbursement. CMS (the Medicaid/Medicare cabal) is the greatest tyrant of them all, since it has zero profit motive to retain subscribers and next to no control over who subscribes, anyway.
I don't know what can be done to fix this, I know the road to ruin starts in considering healthcare/health insurance a true market economy. The whole system needs work. CMS proves single-payer can either be oppresive in its tax burden or punitive in its reimbursements, or both), and private insurers won't (and shouldn't) cover all patients irrespective of risk.
More to the point of Megan's actual post, though, merging Medicaid and Medicare would make sense actuarially, since it would combine the risk pools: old people of any income are greater insurance liabilities than are low-income people in general. Administratively, it would be a pickle, particularly since Medicaid and Medicare fight moral hazard in very different ways. Medicare has a standard 20% coinsurance rate and a high deductible, increasing the patient's exposure to the financial end of things and incentivizing economical treatments. Medicaid, in many cases, has negligible out-of-pocket costs for its patients (since they're generally broke anyway), but it seems to discourage waste by way of skinflint reimbursements--it pays so little, physicians almost take a loss on high-cost procedures, so short of out-and-out (imprisonable) fraud there's no path to wealth for Medicaid-heavy providers. Merging the two systems would require reconciling these practices in a manner that would bankrupt neither the government nor the low-income/geezer public.
Merge them, rename it and institute means testing to determine how much everyone pays for their visits/procedures/prescriptions.
Only if you assume the family spent the 14k a year their employer currently spends on their health care. If people saved that 14k most people would be able to pay out of pocket for nearly all healthcare.
There would be a small 50k deductable plan for the truely catastrophic.
This would never work in practice as 90% of people would just spend the money and then complain they can't afford healthcare and the government should foot the bill.
I have a disabled son who gets Medicare and also qualifies for Medicaid. The Medicaid used to pay for his prescriptions, now all it pays is the Medicare premium for him.
That helps, but he buys his Medicare prescription coverage and that coverage won't pay for three of the four medicines he needs.
Medicare is fantastic for old people who have enough money to cover the out of pocket expenses, but less than a month into the year, my son's out of pocket expenses have been $400. Considering that Social Security disability is his only income, that's over 1/3 of his monthly income.
And, he worries sometimes that the financial support given him by his family will disqualify him for the Social Security.
If he had a child which he couldn't support, he and the child would both qualify for full Medicaid. Or, if his SS check was $50 less/month, he'd qualify for the prescription coverage with Medicaid which DOES pay for the drugs he needs.
My point is that Medicare is not all it's cracked up to be for those on limited incomes.
That might be the best policy suggestion from a blog this year.
The care provided by Medicare is funded by people who have been paying into the Medicare Ponzi scheme for decades...The care provided by Medicaid is also funded by people who have been paying into the Medicare Ponzi scheme for decades.
Right, and national defense is funded by people who have been paying into the Department of Defense Ponzi scheme for decades.
Well, yes, if every American had an extra $14k a year (using your figures), and then saved it as a personal health account, most people would be able to pay out-of-pocket for everything. Of course, if we did that, the economy would really crater since we'd be taking 2.1 trillion dollars (conservatively) out of it for a bunch of mini-contingency plans, while those funds going to insurance companies at least creates jobs and profits. There'd be no such thing as a small 50K deductible plan since there'd be no profitable health insurance industry to fund it, and anyone with serious chronic illness wouldn't be able to get insurance OR meet costs with their $14,000 cash stack.
And, as you note, nobody would save $14,000 of extra money on the off chance they incurred exactly $14,000 in health care costs annually; I know I'd use it to pay down debt. If people then use a portion of it to buy, say, health insurance, as would be sensible, the problems of the health insurance economy would remain with one MORE set of fingers in the pie (i.e. each employee), and would further concentrate the risk pool as healthy people took their windfalls and ran.
People often idly ask what happened before we had health insurance, let alone Medicaid/Medicare--i.e., how can it be so important if we lived so long without it. The simple answer is that people went to state hospitals, went broke, and died young--or stayed healthy, which, obviously, all those old enough to remember adulthood pre-Medicare did. We need a health insurance system--public, private, whatever--but the one we have needs some efficiency tweaks at almost every level.
I'm gonna flag Jasper 10 yards for a bad comparison. National defense > medicare/medicaid/SS. The benefits of national defense are realized right now, whereas with medicare/medicaid/SS, they are supposed to be realized later.
Creative no? How about merging the Army and the Post Office?
How about merging the Army and the Post Office?
It's been tried. The military was used to deliver the mail during the postal strike of 1970.
Medicare recipients vote with tremendous vigor, on average. Medicaid recipients don't vote very much, on average. Merging the two systems would likely mean a net increase in rationing for the former group. The two systems will not be merged.
The primary goal of our political class is to increase the material comfort of non-poor old people. Nothing is allowed to interfere with the pursuit of this goal. This contributes greatly to our current unhappiness with the economy, but it is still considered impolite by many to mention it.
Re: And, he worries sometimes that the financial support given him by his family will disqualify him for the Social Security.
???
I'm aware that there are some stringent income and asset restrictions on Medicaid but since when do gifts from one's family (which I assume do not show up on any tax statements unless in excess of 10K/yr) count as income?
Re: The simple answer is that people went to state hospitals, went broke, and died young
Simpler answer: healthcare wasn't very expensive back then because it couldn't do very much. Some very basic surgeries, x-rays and a few other diagnostic tests, a VERY small number of effective drugs, and lots of hand-holding. I recall reading once that in 1900 the single biggest expense on the books for a certain large hospital was fresh linens.
I'm for it, but the political wrangling around the federalization of Medicaid would be tremendous. Different states run their programs differently, cover different things, and have different eligibility rules. Unless you took the most generous version possible, we'd have months of horror stories of poor people who lost their healthcare when the Feds took it over. (think the Medicare Drug benefit news coverage) Also, Medicare eligibility is simple. Once you're covered, you stay covered. People go on and off of Medicaid all the time. Getting sensible national guidelines, deciding what sort of cost of living adjustments there would be, etc, would all be a tremendously ugly political fight.
Yes, this is the best policy prescription of the year. Actually, most Medicaid is spent on a small group of people who are also covered by Medicare, Donna B.'s son for example, but usually they are elderly people in nursing homes who have exhausted, or didn't have, retirement savings. When it comes to long term custodial care, which is very expensive per person, Medicaid does the heavy lifting. In the process, though, there is a lot of ugly bureaucratic infighting as providers try entice more generous Medicare payment and then pursue Medicaid when they are turned down for a dubious claim.
What politicians want is to keep their jobs and perhaps get promoted. Besides that, some of them want power. Medicaid beneficiaries do a poor job of voting and making campaign contributions; but politicians can improve their chances with voters by appearing compassionate, which is something they can do by expanding the number of people covered by Medicaid. Expanding Medicaid to cover young poor families does not cost much.
Just to make sure it does not cost much, politicians can enhance their fiscal conservative credentials by voting against increases, even up to what Medicare pays, which isn't much in itself, in what Medicaid pays to health care providers. They are still compassionate because they have so greatly expanded the rolls of Medicaid beneficiaries. If the newly entitled cannot find competent doctors and hospitals that will see them, well, that's another problem.
The structure of health care finance with its built in moral hazards means that there will be rules about who gets paid; what amount they get paid; what service they deliver; the reason for the service; on whose behalf the service is rendered; the eligibility of the person served; and their need for the service. The reason for the rules is that the total cost of health care, the cost of Medicaid for example that both state and federal politicians have to worry about, is the product of the number of services delivered times the amount paid for the services. To contain costs, or achieve savings if you prefer, both sides of that equation have to be addressed. The rules require a bureaucracy for enforcement. The rules require that health care providers have their own bureaucracies to make sure that they get the most out of the system. The recipient of services is not part of the struggle between these bureaucracies.
Those who counsel eliminating third-party payment for health care are probably right that total costs would be much lower as people, both providers and recipients, learn to be more prudent and as providers compete. Unfortunately, there are people with extraordinary and catastrophic health care needs that no amount of foresight and prudence can pay for. That is what Medicaid, not Medicare, is for people like Donna B.'s son. The trick is how to define those people and make sure they get what they need.
Because politicians need to be loved we are moving towards broader Medicaid coverage. That will increase pressure to make Medicaid pay more for what it delivers. State politicians will want to rid themselves of this burden. By folding Medicaid into Medicare, essentially by assuming long term care costs because what states pay for non-custodial medical care is a trifling amount to the feds, federal politicians can enhance their compassion credentials. In the end, I guess we'll all be covered by Medicaree/Medicaid, or whatver fancy name they'll give it. The program will try its best to pay health care providers as little as possible, and people who can afford it will opt out and pay providers under the table. Under the table because the government program will have a "most favored nation" provision in provider contracts that says the government will pay the provider no more than what the provider gets from anyone else.
If it makes sense to combine Medicare and Medicaid, then it makes sense also for us to provide politicians with Medicare-Medicaid health insurance, instead of the top-of-the-line plans the government currently funds. They pass rules and regulations concerning these insurance plans, so wouldn't these plans be better if politicians had these plans? Politicians should have the opportunity to eat their own cooking.
From the standpoint of a practitioner, the populations served and burdens (and rewards even apart from financial) are substantially different. To combine them would probably reduce interest of physician participation in serving the populations. A couple of the issues. For populations that are not billed directly for their services, a lot of times their relationship is with a clinic and not, to some extent, an individual provider. For instance, a 'retired' Army orthopedist may close his private practice and work 20 hours a week at a VA hospital. Almost all medical school practices are of the type of an instutional relationship. So potential frustrations about rate of individual procedure payment or compliance with appointments are obviated by salary and opportunities to participate in supervison, research, and educational conferences. For a purely private practitioner, the rule may be 'the first third of the patients you see, you pay for your overhead; the second third, you keep body and soul together; and, the last third, you make money.' Medicaid's payments and bureaucratic impediments to achieving work or payment impedes you from achieving any of that; so treatment may be done, to the extent it is, in the interest of treating 'the broad range of patients.'
"I recall reading once that in 1900 the single biggest expense on the books for a certain large hospital was fresh linens."
I recall reading recently how failure to change bed linens in UK hospitals was leading to the spread of MRSA and other "superbugs". It seems that with all our awesome new medical technology, we've forgotten the basics, as figured out by folks like Louis Pasteur so long ago.
It seems to me that there are two areas where inflation runs at about 3X the general rate of inflation - military and medical. Both involve a lot of new, high technology, both have the government as the biggest consumer, both are supplied by a shrinking number of bloated (and increasingly monopolistic) providers and both are really non-optional and not something you can really defer.
Holdfast, I think you could add higher education to that list. Thus far, technology seems to have no impact on the cost of education. It is fair to say that both military technology and health care technology engender greater efficiency at the margin. Bigger bombs kill more of the enemy at a lower cost per kill. New pharmaceuticals cure or ameliorate conditions - male impotency for example, that formerly went untreated.
The problem in all three cases is that those who demand the services are not responsible for their cost. The services can be optional and can be deferred, but why bother when someone else is paying.
Albatross says: "Given the studies that have shown little effect to having medical coverage at all..."
REFERENCES, please!!! Healthy people select to drop coverage, so the numbers are skewed.
{I couldn't agree with MMc's thesis more. As a physician, I will add that if you do accept Medicaid and the 18 cents on the dollar as a "give-back" to the community, your practice soon gets inundated with 'Caid patients.}
I went to a doctor in St Pete who took only Medicare-- no other insurances (we non-Medicare patients paid cash, but could turn in receipts to our insurer for reimbusrement). This meant that he didn't need a army of office staff to do his billing. He had just one full time employee, a receptionist/billing clerk (his wife filled in when that person needed a day off). Presumably he also had an accountant to do his books and a cleaning service for his office. His fees were quite reasonable and affordable, so his reliance on Medicare business did not force him to jack up his rates for everyone else. And bonus feature: he was not driven to see twenty patients per hour but could linger a bit with each patient and get to know them, like an old-fashioned doctor.
Michael,
I agree with most of your comment, except the line: "To combine them would probably reduce interest of physician participation in serving the populations." If there is no differentiation between Medicaid and Medicare populations, very few practitioners could afford to opt out of taking them since they would make up a large plurality of patients. In effect, the govt would be compelling physicians to accept this single payment system. I'm not sure that's a bad thing.
Jon F,
That actually sounds like a good idea, especially for an internist who has mostly Medicare patients anyway. Medicaid pays about half of Medicare (in my state.)
Tony, physicians are, in general, subject to the price mechanism. After all, they have been 'forced' into medicine by the historic typical median income similarly to the way Russians were forced into designing fighter planes and nuclear missiles. I think the 2 most likely outcomes to your proposal are: 1) Assuming the fees were similar to Medicare, nongovernment institution physicians would charge a several thousand dollar fee to enroll in their clinic. 2) Physicians would drop participation in both programs. This would increase the supply of physicians available for private insurance and lower rates there but would exacerbate the shortage of the physicians in the government programs.