Who is gaming the system? Surprise, it's the corporations!

I recently participated in a panel discussion following a presentation on the impact of the Affordable Care Act (“Obamacare”) by UC-Berkeley economist J. Bradford DeLong. Unsurprisingly, Dr. DeLong, who worked in the federal government as Deputy Assistant Secretary of the Treasury for Economic Policy in the early years of the Clinton administration, during an earlier attempt to pass comprehensive health reform, took an economic point of view. He described the economic theories behind each of the approaches to health reform, how the ACA was put together, how it most resembled the “RomneyCare” model implemented in Massachusetts and endorsed by Hillary Clinton but abandoned by the Republicans; he also showed that the Obama administration miscalculated the near-unanimity of Republican opposition. He also looked at how the implementation of the ACA has been more successful than many feared (or hoped) and how the economic analysis behind it was distorted by the Supreme Court decision to allow states to not expand Medicaid, which has resulted in an enormous transfer of wealth from the “red” states that have not to the “blue” states that have done so. Apparently, the ideological commitment by many states (including my own, Kansas, and neighboring Missouri) to harm its people and give away money is puzzling from a purely economic, as well as a human, point of view.

One of the themes Dr. DeLong notes coming especially from “conservative” economists and Republican politicians (and we hear a lot) is the need for people to have “skin in the game”, by which they mean co-pays, deductibles, and other ways of people paying out of their pockets. As Dr. DeLong noted, the only large, well-designed, and meticulous study of the impact of such “skin in the game”, the 1983 RAND experiment (which I have previously discussed; see Insurance company profits up and patient care down, May 17, 2011*)  showed that even small out-of-pocket payments discourage people from seeking care for both minor and major conditions, ultimately cost much more to care for, and harm the health of those people. As noted by one of the audience, current requirements in many “high-deductible” plans for “skin in the game” cost-sharing are far greater than those studied by RAND (and can be 45% of a person’s income!) and are thus even more likely to have a major negative health impact.

Another common “game” meme, mentioned by one of the other panelists, is concern with people “gaming the system”. If this conjures up images of elegant gamblers in formal wear playing roulette with James Bond in a posh casino on the Riviera, that is the intent. Like Ronald Reagan’s “welfare queens” and Kansas Governor Sam Brownback’s “able-bodied adults who refuse to work”, it is meant to divide people by creating a “them” who are taking it easy while the hard-working “us” pay the price. Of course, this is nonsense; most of those individuals so “gaming the system” are merely trying their best not to break their budgets paying for health insurance until they get so sick that they need it. Yes, this is certainly contrary to the concept of insurance (everyone pays and only some people benefit, but you never know when it will be you), and is a big reason that most countries have gone to a “social insurance” system that just covers everyone.

In fact, despite all the fooforaw about it, there is no data suggesting that there is massive “gaming of the system” by regular people. Michael Hiltzik’s Los Angeles Times column of February 27, 2016 makes this clear, focusing on “Special Enrollment Periods” (SEPs), times when people can enroll in or change their insurance outside of the usual ACA annual period. Huge insurance companies like Aetna and Anthem have asserted, without much evidence, that people are using these SEPs (mostly designed to allow changes when you get married, divorced, have a baby, move to a different state where your current plan wouldn’t cover you) to “buy to use”, in Anthem’s words, meaning you wait until you’re sick to get insurance. Hiltzik presents data that shows this is not significantly the case, and that it is absurd; he writes “Aetna must think the entire country consists of people plotting how to get a quickie marriage or divorce or have a baby just in case they get sick. The vast majority of SEPs cover a relatively trivial number of cases, unless you think there are hordes of people applying to become members of a Native American tribe after they get sick.”

Of course, people do game the system. But the big gaming is by the insurance companies themselves and the providers of care. These corporations, big insurance companies, health systems, drug makers, who have the clout to “game the system” do so all the time as part of their core business models. It is convenient for them to divert our attention to regular people, middle-class people, and especially poor people, as the ones gaming the system. In fact these are of course the folks who suffer the most harm, whose health is most affected, whose access to care is most limited, and who are stuck with crummy health coverage because this is all they can afford.

The insurers work every legal angle (and perhaps some not-so-legal) to figure out how to mostly insure relatively healthy, low-cost people (after all, 5% of people account for 50% of health costs and 1% for 20%, see my Red, Blue, and Purple: The Math of Health Care Spending, October 20, 2009, and Kaiser Health News report 2013),  while the high-cost patients are covered by Someone Else. Providers, especially health systems and hospitals, figure out how they can “upcode” to get maximum reimbursement from insurers, attract people who have high-profit-margin conditions to themselves, and encourage high-cost, low-reimbursement poor and poorly-insured people to find their care from Someone Else. Insurers blame providers for charging too much, providers blame insurers for paying too little. One of the other panelists, a hospital executive, complained about how insurers seek transfer risk, which is part of the definition of insurance, to the providers. Neither is blameless, and the other big players, pharmaceutical companies (and device manufacturers) make out like bandits, with no major candidate having a real plan to address this according to a report by Julie Rovner of Kaiser Health, (cited here by Medpage Today). Of course, this equates all plans to “negotiate prices” and it is obvious that a single-payer health plan, such as that advocated by Bernie Sanders, will have a lot more negotiating clout than the multiple-insurer mess that other candidates support and exists today.

What did I say as a panelist? Basically, that the goal of the system should be to maintain and improve the health of people, and that the economic design of the system should be designed to achieve that goal, rather than having competing economic theory be the driver, and people the incidental victims. I said that spending money on providing health care to people was not a bad thing, but spending huge amounts on “health care” when more than half was going to profit was. I said that all this spending on medical care (and profit) limited what was left to be spent on creating the conditions that allowed people to benefit from medical care – like housing, food, education – the social determinants of health.

I think that this resonates with people, both at the event and in the world. Or maybe I’m one of those “hopeless idealists”. If the alternative is being cynically corrupt, I wouldn’t want to be anything else.

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* Citations from that blog post: “RAND Health Insurance Experiment (as cited in Freedom abroad, health at home: experiments in preventive health care, February 13, 2011; the study was published in the New England Journal of Medicine in 1983[1]; and it is summarized in an article by Joseph P. Newhouse, "Free for all?:  lessons from the RAND Health Insurance Experiment", RAND 1993.”

Medicaid expansion: Is there something the matter with Kansas?

One of the key parts of the Affordable Care Act’s (ACA) effort to cover most Americans was the expansion of Medicaid to cover everyone under 138% of the federal poverty level (FPL). The Supreme Court decision in 2012 (National Federation of Independent Business v. Sebelius) found in favor of the “individual mandate”, allowing the law to go forward, but found against the ability of the federal government to withhold all Medicaid funding from states that did not expand Medicaid. This decision did not prevent the federal government from creating an incentive for states to expand Medicaid, which it did; for the first 4 years the federal share of cost of expansion would be 100%, dropping to 90% thereafter. This is quite a financial incentive, and as of December 15, 2015, 31 states have expanded Medicaid, 4 are considering it, and 16 are not, depicted on this map from the Kaiser Family Foundation (KFF).

Neither of the Kansas City area states, Kansas and Missouri, are in the expansion group, and thus a significant portion of their population remains uncovered. Like the other 14, control of their legislatures (and in Kansas, of the governor’s office) is in the hands of very conservative Republicans ideologically hostile to ACA. However, this is a problem not only for the poor people left without insurance and their advocates (like many of the healthcare foundations), but also the states’ hospitals, who continue to have to provide care for these people without reimbursement. To some degree it is also a problem for the state’s business community because more than half of the this group of people are employed, mainly in small businesses that cannot afford to buy private health insurance. It also decreases, in the opinion of many Chambers of Commerce, the state’s ability to attract new business and jobs.

On January 5, 2016, I attended a forum on expanding KanCare (Kansas’ privatized Medicaid program) sponsored by many of these business organizations (6 Chambers of Commerce), hospitals, physician provider organizations, and healthcare foundations (see list of sponsors on KC COC site). The event, held in Overland Park in the Kansas City area, followed a similar one held in Wichita in November, 2015.  It began with a presentation by Dave Kerr, a Republican former president of the Kansas State Senate, detailing how Medicaid expansion would bring in at least 10 times what the state would have to spend. After this were two panels, one consisting of 5 KS legislators (3 Republican, 2 Democratic; 3 senators, 2 representatives), and the other of 5 healthcare experts.

Prominently included in the second group was the president of the Indiana Hospital Association, Doug Leonard, who presented how his state had effectively expanded Medicaid. The presumption of the sponsors of the event was that this would resonate in Kansas, because Indiana is also a conservative state with a very conservative governor (Mike Pence) who had mandated the expansion based on certain principles of individual responsibility and fiscal neutrality. Indiana’s plan is one of 4 (those with asterisks on the map) that were developed with federal waivers. In its first year, it has enrolled 220,000 people into its Medicaid program, and, largely because it is paying providers at Medicare rates, increased by 1,000 those who accept Medicaid. It is paid for by a combination of increased cigarette taxes and levies on hospitals.

Unsurprisingly, this resonated well with most of the attendees and speakers, although support was not universal. Sen. Jim Denning (R., Overland Park), who is considered a health policy leader in the state senate (apparently he works for a group of private ophthalmologists), indicated that Indiana’s program would not pay for itself after the first year and would have to tap into the state general fund. The moderator asked Mr. Leonard, who drily indicated that perhaps Sen. Denning had information that Indiana did not have. When the moderator asked Sen. Denning the source of his information, he indicated “the Forbes article”. Mr. Leonard responded that, first of all, it was not an article but a blog post in Forbes, and second that the state had responded point-by-point to its incorrect assertions.  

Sen. Denning’s credibility as a source of facts was already questionable, as he had previously asserted that Medicaid expansion would affect only those between 100% and 138% of the FPL as those below 100% were already eligible for KanCare (not true; in Kansas, adults actually must be actual below about 33% of FPL, in addition to being a a special group like mothers of dependent children or disabled, to be eligible for KanCare) and that those between 100% and 138% of FPL could buy subsidized “silver” plan coverage on the exchanges for about $2.50 a month (not true; those below 138% of FPL are not eligible to buy coverage on the exchanges at all). I do not know if he misspoke or whether he believes those assertions to be true. If the latter, it is not clear whether whether those misconceptions in part inform his opposition to KanCare expansion (and thus could be changed by the facts) or if his ideological opposition informs his willingness to believe such incorrect information. However, he is a leader in the state senate, and so he is probably accurate when he asserts that the KS legislature will not expand KanCare. Other legislators on the panel, including the Republicans, indicated that such expansion would require leadership from KS Governor Sam Brownback, which the governor has not indicated will be forthcoming. One, Sen. Jeff King (R., Independence) is from the town whose hospital recently closed, at least in part because it could not count on KanCare expansion; he indicated that his father, who had had 2 heart attacks, was now 25 miles, not ¾ of a mile, from the closest hospital.

Beyond Sen. Denning, there were other concerns about the forum. Every panel member was white, and other than one state senator, Laura Kelly (D., Topeka), every one was man. Women gave the opening and closing remarks, but there were no people of color who spoke. This was obvious, but not the only important way in which the speakers (at least) and probably audience differed from the average person. One reason was that there were a lot of business leaders, because they have clout. They do, however, have a limited – and not always accurate – view of the rest of the people in this country. They seem to think that support for expansion of KanCare (and other social programs) is important until people get good jobs and get these benefits from their work (they referred a lot, disparagingly, to the “able bodied unemployed”). But where are the jobs? Job creation is supposed to be a high priority of the governor and legislature, and is the stated reason for the dramatic tax cuts of 2012 (indeed, rich people are now renamed “job creators”) but not only has job growth been slow, but it is mostly in lousy jobs – poorly paid and without benefits (eg., health insurance!). There was a great deal of talk about “retraining”, but there simply are not enough “good” jobs to employ everyone no matter how retrained they are. Their myopia may be because many well-to-do people have contact with others who are like them; in their neighborhoods, work, and country clubs. They have little insight into the real issues confronting those in the bottom 80%, not to mention 50% or 10%. I doubt they even know what the numbers are, but this article from CNN Money, with its neat interactive graph, should help; the median household (not individual) income in the US is $52,000.

I see lots of both poor and “regular” people as a doctor in the clinic and in the hospital. I live in a neighborhood that is mostly, well, working class. I see my neighbors, adults and children, on the streets when I walk my dogs. They’re trying, but it is not easy for them. Jobs are scarce, and many of those  that  they can get involve the sort of physical labor that takes its toll on their bodies and leaves them prematurely disabled. Lack of health insurance exacerbates their problems. A major recent NY Times/Kaiser Family Foundation study, reported by the NY Times, finds “Even Insured can face crushing medical debt”. Those business leaders who may think that $200K a year (for a household, most with two earners) is “middle class” should know it puts that household in the top 5% (and, for goodness sakes, in many parts of the country households making $200K are still struggling!). It would be good for them to meet with some regular folks and find out about their lives. I applaud the work that the various healthcare foundations in Kansas, many of whom co-sponsored this event, are doing. But our leaders, political, business, and otherwise, need a little reality check to leaven the ideology.

There are a lot of things that impact on whether a person is healthy besides access to health care (the social determinants of health: housing, warmth, food, education, safety, etc.). But access to health care helps. 

Who is left out of ACA, and how does this affect Health for All?

The Affordable Care Act (ACA, Obamacare) has been very successful, despite the pronouncements of doomsayers (mostly Republicans). More than 10 million people who were previously uninsured have received coverage, and this has dramatically increased their access to health care. However, many people remain without health insurance, and many more are barely able to afford their premiums or can afford only the most basic plans. These people fall largely into three groups: those who the law was never planned to make eligible (mainly those people who are living in this country without documents), those people who make less than 133% of the poverty level but were not previously eligible for Medicaid and live in states that have not opted for Medicaid expansion, and lower-income people above 133% of poverty who have either not bought insurance on the exchanges or bought it and have since dropped it.

The first group, those without papers, comprise over 11 million real human beings in this country, people who work and go to school and get sick and visit our emergency rooms. That they are not even considered in ACA or any other proposal considered politically viable is a head-in-the-sand approach that ignores both human suffering and the cost of providing care to them. This cost is often shifted to hospitals, doctors, and volunteer organizations, such as the student-run Jaydoc Free Clinic in Kansas City, KS. The work that volunteers do is admirable, like that of the people celebrated by the first President Bush as “1000 points of light”, but it is not the way a wealthy country should have to provide care to people.

The second group is composed of those that the ACA intended to be covered by Medicaid expansion, but who live in states that have opted not to expand Medicaid. Given that the federal government would have picked up 100% of the bill for the first 4 years and then 90% thereafter, it is financially a good deal for the states. The reason that states like Kansas have not done so is entirely political; these are all states with Republican governors and/or Republican-controlled legislatures (although it does not include all of those!) whose core political position is opposition to anything coming from President Obama. Their proposed health plan is -- well, nothing, but they are against Obamacare, and against expanding Medicaid, and if this seems not only mean but economically stupid, so be it. People who in other states can access care when they need it are going without care or showing up in extremis in ERs. Hospitals end up footing the costs for people who could have been insured..

In Kansas, the first hospital closure that might have been forestalled with Medicaid expansion has occurred. Closing of Kansas hospital adds to Medicaid expansion debate (Kansas City Star, October 18, 2015) describes the closure of Mercy Hospital in Independence, KS. Doctors from relatively nearby towns that still have a hospital report increases in ER visits from people from Independence.There are many reasons that contributed to this closing, including the fact that residents of rural areas such as Independence are older and sicker than the national or state average, but a large proportion of them would have been eligible for expanded Medicaid had the state implemented it. The article makes clear that “While Medicaid expansion may not have saved Mercy Hospital, there are some in Montgomery County who say it could save many individuals.”

The Kansas Hospital Association (KHA) has been lobbying hard for Medicaid expansion because their members are losing money caring for uninsured people who are covered in the states that have expanded Medicaid. These hospitals are absorbing the impact of cuts to MediCARE which were supposed to be offset by the decrease in the uninsured resulting from the expansion of MediCAID, which is of course not happening in states such as Kansas, and it sees Mercy as the first domino to fall. KHA has a lot of influence in the state capital, Topeka, and rarely loses battles that it engages as strongly as it has this one, but so far there has been no movement from the Governor or legislature. While some legislators are beginning to rethink the issue: “ ‘My sense is a lot of legislators are saying we need to have that discussion (about Medicaid expansion). We need to take a hard look at that issue,’ said Rep. Linda Gallagher, a Lenexa Republican. ‘I do support that myself’”, others are adamantly opposed: “’I know that’s on the table. I don’t think any decision has been made on that,’ said Rep. Tony Barton, a Leavenworth Republican. ‘I think it would be moving in the wrong direction. I’ll leave it at that.’” And well he might leave it at that, as there is really nothing he can say that makes economic or social sense. It is a quintessential statement of opposition, being against something because, well, he is against it.

The Star article makes clear that Independence, KS has had, like many small towns, difficulty in recruiting and retaining physicians, but even those towns with doctors have hospitals with major financial challenges that could be helped by Medicaid expansion. Dr. Doug Gruenbacher, board chair of the Kansas Academy of Family Physicians (KAFP), an organization representing the family doctors who are the mainstay of rural health care, practices in Quinter, KS. While Quinter has fewer than 1000 residents (compared to Independence’s 9300), its group of family doctors cares for people from perhaps a dozen surrounding counties. Dr. Gruenbacher wrote a letter to the Salina Journal (October 10, 2015) calling for Medicaid expansion. He says “I know that my hospital [Gove County Medical Center] and more importantly, my patients, would benefit from the expansion.”

This leaves the third group of people who have had little or no benefit from the ACA: those who have  either not been able to afford to purchase insurance on exchanges, despite subsidies, or have dropped it as a result of rate increases by insurance companies. In “Insurance Dropouts Present a Challenge for Health Law” (NY Times, October 11, 2015), Abby Goodnough focuses on people in Mississippi, another states that has not expanded Medicaid. She observes that many of those who are working and making more than 133% of poverty are eligible for subsidies on the exchanges – indeed, 95% of Mississippians receiving coverage this way have subsidies, the highest percentage in the nation – but increasingly are finding the premiums more than they can afford on their tight budgets. Sometimes people were dropped from their insurance companies simply because they did not provide some information that the law requires to prevent undocumented people from signing up. Sometimes they just couldn’t afford it.

The ACA prohibits insurers from denying coverage for those with pre-existing conditions, but does not prohibit them from charging more for that coverage. And they do. “Walter Whitlow, 56, a remodeling contractor in Volente, Tex., said he had never seen the emails the federal marketplace sent him asking for additional proof of income after he signed up for a Humana plan in January. Doctors diagnosed throat cancer in February, and in June he learned from his oncologist’s office that his monthly premium had gone to $439 from $103 and his deductible to $4,600 from $900.” Whoops. Glitch.

Or not. The ACA was an attempt to accommodate many political interests, and thus is a conglomeration of different programs. Its commitment to insurance companies, whose support seemed to be necessary to pass the bill, was to have the “individual mandate”, so that the insurers, now required to cover everyone, would have everyone, not just the sickest, in their risk pool. However, beyond this, the ability of insurers to increase premiums for the sick was projected to be a problem, but the advantages of passing the program outweighed it. ACA is not intended to ensure health for all, but coverage for most (except those noted above). In the aggregate, it has been of great benefit. But for individuals, like Mr. Whitlow, the impact has been disastrous.

It is important to remember that this impact is not because we passed a bill that tried to cover as many people as possible, as opponents of ACA maintain without any data. It is because that bill did not go far enough, did not cover everyone, did not provide sufficient protection for people from the predatory practices of insurance companies. These are not the reasons that most ACA opponents want to fix, although they should be fixed. Dismantling ACA will not help the people who are described above, suffering despite this program; it would only vastly increase their number.

But change is necessary. We do, in fact, need a comprehensive national health program that simply, like those of most countries, covers everyone. Like Medicare for all. This will not solve all problems. It will not necessarily bring doctors to rural Kansas. It will not insure quality. It will not, in itself, completely control costs. But it is a necessary, if not sufficient, step.

“Our mission as family physicians is to provide care to all Kansans, not just the insured,” Dr. Gruenbacher writes. The next step is to make sure that there are no Kansans, or Americans, left out. 

Medicaid expansion and uncovered lives: are people meaner in the South?

I have lived in a number of places, from New York City to Texas, Illinois to Kansas. Politically and socially there are very different norms that prevail, which are demonstrated by the difference in who we elect and what policies we choose to legislate. And, yet, in all of these places people are people. They can be kind and generous or mean and selfish. As individuals, they love and care for their children, or sometimes don’t. They are respectful of others, or not. In all places. And yet it is clear that there are major regional tendencies to policy that must reflect the local and regional values even though people are not necessarily nicer or meaner. I think that my blog posts have made clear my positions on many issues, particularly those related to health and to social justice.

Obviously, self-interest has a lot to do with what people believe, what policies they support, and which politicians they vote for to implement those policies. To a large degree, it is economic – what is good for me and my family, as illustrated in the old Clinton campaign mantra “It’s the economy [stupid]”. Of course there is more than that. If people voted mostly for their economic self-interest, we would have a very different set of national policies because there are so many more poor and middle-class people than rich, and in the last decade especially so many more middle-class people descending toward poor than ascending toward rich. Many of the policies we have would only be supported by those who are both rich and selfish, the latter being only a portion of the rich. And yet, so many of our policies only benefit the very richest. When it is “the economy”, it is usually good for the wealthy and big business, but not necessarily for all of us. And it is more so in some states and regions. We are, not individually but as a group, meaner some parts of the country than in others.

Access to health care and the means to be healthy (having the opportunity to have a home, and good food and a job and a reasonable opportunity to care for the needs of yourself and your family) is one important arena in which we are meaner in some places than others. We know, for example, that expansion of Medicaid under the Affordable Care Act has varied not only by state but largely by region. Since the ACA intended people under 133% of poverty to be covered by this expanded Medicaid (paid by the federal government, 100% for 4 years and then 90%), they are not eligible for health insurance exchanges. Thus, if their state did not expand Medicaid, they are unable to get coverage. This is the map of states that have expanded Medicaid; clearly, it there is a strong regional difference:

This figure from the Kaiser Family Foundation, showing the regional focus of non-expansion of Medicaid in the Southeast, South Central, Plains and Mountain states, is included in a very interesting piece in the Huffington Post by Harold Pollack of the University of Chicago, “Martin Luther King wouldn’t be very happy with this map”, posted on King’s Birthday holiday, January 19, this year. What he is referring to is that the South, the area King was from and spent most of his time working in (much of which is shown in the movie “Selma”) is one of the areas most affected. But Pollack makes the point that it is actually much worse, and that the South has the vast majority of uncovered people because some of those geographically-large Mountain and Plains states haven’t got very many people. Other states that have not expanded Medicaid, like Wisconsin, have other programs covering a large number of those who would be eligible for an expanded Medicaid. We have seen maps of the US re-drawn to make the size of states proportional to their population, where California and Texas and Florida and New York are huge, and Mountain states tiny. Pollack asked Harvard researcher Laura Yasaitas to show the states re-drawn to have their size proportional to the number of uncovered people. The results are even more amazing:

Because of their larger population, Southern states now obviously account for the vast majority of uncovered people, with the most populous states – Texas, Florida, Georgia, and North Carolina seeming huge. The two states Kansas City borders, Kansas and Missouri, are pretty big (Missouri is the one above Arkansas, the blue keystone in the middle, and Kansas is to its west, over Oklahoma which is recognizable because of its panhandle). Montana, Wyoming, and Utah fade not because they are covering people but because of their small populations. California and New York only show up because the mapmakers artificially pretended there were a couple of thousand uncovered people so they wouldn’t drop off the map altogether.

As Pollack points out, the two states that have benefited the most in terms of fewer people being uninsured are Arkansas, the keystone mentioned above, and Kentucky, the dark blue state above and to its east. This is because these two, southern/border states, had very large proportions of uninsured as did the rest of the South, so showed the greatest increase in covered people when they expanded Medicaid. Arkansas’ expansion created poignant stories in places like Texarkana where the poor folks in the Arkansas half were now able to get coverage, while those in the Texas half were not (see the NY Times “In Texarkana, uninsured and on the wrong side of the state line”, June 8, 2014). The lesson is that Medicaid expansion could benefit even more people if it were implemented in these large-population states, with real significant changes in the actual and potential health status of lower-income people there.

But they haven’t done it and are unlikely to. The political will is not present. There are anti-ACA crusaders in many states, but they are particularly prominent in the South, which already has the highest proportion of poor and needy people and the lowest levels of social services. Clearly, this has a lot to do with race – that historically and in the present many of the poorest people in the South are African-American (and, especially in Texas, Latino). This makes Dr. Pollack’s invocation of Dr. King particularly relevant. And particularly poignant. Racism has been one of the dominant themes in America, and while it certainly exists in all parts of the country, it has never been as institutionalized as in the South (remember slavery? Jim Crow?). And to those who say it is not like that anymore, we don’t have Bull Connor, or the bridge in Selma anymore, we are the New South, look at the map above.

I really don’t think that the people in the South, any more than in Kansas or Missouri—or Montana and Wyoming—are meaner than they are in other parts of the country. So why do they elect people who institute policies to make it look like they are?

Medicaid expansion or not: everyone needs coverage

In an echo of my blog post of November 17, 2013, “Dead Man Walking: People still die from lack of health insurance”, the New York Times’ lead article on November 29, 2013 was “Medicaid growth could aggravate doctor shortage”. The main point in my blog was that, to the degree that there is a doctor shortage exacerbated by increasing the number of people who have health insurance (from Medicaid expansion or insurance exchanges or any other reason), the shortage was already there. If the reason that it was not felt earlier was because people, not having health insurance, did not seek care, does not change the fact that these people were here and were as sick as they were or are. To the extent that they were not getting health care because they were uninsured is a scandal. If anything, that people will now have coverage and thus seek care is an unmasking of an extant but unmet need.

The Times article looks particularly at Medicaid because many doctors will not see Medicaid patients since the payments do not cover their costs (or, in many cases, because they can fill their schedules with people who have better-paying health insurance). Those physicians who do accept Medicaid often feel that they will not be able to take more Medicaid patients for the same reason, and it is unlikely that those who are already not accepting Medicaid will begin to. The problem is significant for primary care, even for institutions like Los Angeles’ White Memorial Hospital that already care for large numbers of Medicaid patients. In the NY Times article, my friend Dr. Hector Flores, Chair of the Family Medicine Department at White Memorial, notes that his group’s practice already has 26,000 Medicaid patients and simply does not have capacity to absorb a potential 10,000 more that they anticipate will obtain coverage in their area.

The problem for access to specialists may be even greater. There are already limited numbers of specialists caring for Medicaid patients in California and elsewhere, for the reasons described above: they have enough well-insured patients, and Medicaid (Medi-Cal in California) pays poorly. It is also possible that some specialists have less of a sense of social responsibility (even to care for a small proportion of patients who have Medicaid or are uninsured), and their expectations for income are may be higher. The San Diego ENT physician featured at the start of the Times article, Dr. Ted Mazer, is one of the relatively small number of subspecialists who do take Medicaid, but indicates that he will not be able to take more because of the low reimbursement.

Clearly, Dr. Mazer and Dr. Flores’ group are not the problem, although it is likely that they will bear a great deal of the pressure under Medicaid expansion; if their practices have been accepting of Medicaid up until now, they are likely to get more people coming. The Beverly Hills subspecialists (see: ads in any airline magazine!) who have never seen Medicaid, uninsured, or poor people up until now are unlikely to find them walking into their offices. And, if they call, will not schedule them. So what, in fact, is the real problem?

That depends a bit upon where you sit and how narrow or holistic your viewpoint is. From the point of view of doctors, or the health systems in which they work, the problem is inadequate reimbursement. As a director of a family medicine practice, I know that you have to pay the physicians and the staff. For providers working for salaries, it is the system they work for that needs to make money to pay them. The article notes that community clinics may be able to provide primary care, but does not note that many of them are Federally-Qualified Health Centers (FQHCs) which receive much higher reimbursement for Medicaid and Medicare patients than do other providers. The Affordable Care Act (ACA) will reimburse primary care providers an enhanced amount for Medicaid for two years, through 2014, and yet not only is there no assurance that this will continue, but in many cases has yet to be put into place. And the specialists are not receiving this enhanced reimbursement (although the truth is that many of them already received significantly higher reimbursement for their work than primary care physicians).

From a larger system point of view, Medicaid pays poorly because the federal and state governments that pay for it (although the federal government will pay 100% of the expansion for 4 years and 90% after that) want to spend less. However, they do not want to be perceived as allowing lower quality of care for the patients covered by Medicaid, so they often put in requirements for quality that increase costs to providers which increases the resistance of those already reluctant to accept it. Another factor to be considered is that Medicaid has historically not covered all poor people; rather it mainly covers young children and their mothers, a generally low-risk group. (It also covers nursing home expenses for poor people, which generally consumes a higher percent of the budget.) Expansion of Medicaid to everyone who makes 133% of poverty means that childless adults, including middle-aged people under 65 who have chronic diseases but have been uninsured, will now have coverage.

While the main impact of Medicaid expansion is in states like California that actually have expanded the program, even in states like mine (Kansas), which have not, Medicaid enrollment has gone up because of all the publicity, which has led people already eligible but not enrolled to become aware of their eligibility (called, by experts, the “woodwork effect”). The Kansas Hospital Association has lobbied very hard for Medicaid expansion, but this has not occurred because the state has prioritized its political opposition to “Obamacare”. The problem for hospitals is that the structure of ACA relies on the concurrent implementation of a number of different programs. Medicare reimbursements have been cut, as have “disproportionate share” (DSH) payments to hospitals providing a larger than average portion of unreimbursed care. This was supposed to have been made up for because now formerly uninsured people would be covered by Medicaid (that is hospitals would get something); however, with the requirement that piece removed (thanks to the Supreme Court decision and the political beliefs of governors and state legislatures), the whole operation is unstable. That is, the Medicare and DSH payments are down without increases in Medicaid.

From a larger point of view, of course, the problem is that the whole system is flawed, and while the ACA will help a lot more people, it is incomplete and is dependent on a lot of parts to work correctly and complementarily – and this does not always happen, as with lack of Medicaid expansion. A rational system would be one in which everyone was covered, and at the same rates, so that lower reimbursement for some patients did not discourage their being seen. These are not innovative ideas; these systems exist, in one form or another in every developed country (single payer in Canada, National Health Service in Britain, multi-payer private insurance with set costs and benefits provided by private non-profit insurance companies in Switzerland, and a variety of others in France, Germany, Taiwan, Scandanavia, etc.). If payment were the same for everyone, empowered people would ensure that it was adequate. Payment should be either averaged over the population or tied to the complexity of disease and treatment (rather than what you could do, helpful or not). We would have doctors putting most of their work into the people whose needs were greatest, rather than those whose reimbursement/difficulty of care ratio was highest. There are other alternatives coming from what is often called “the right”, but as summarized in a recent blog post (“You think Obamacare is bad…”) by my colleague Dr. Allen Perkins, they are mostly, on their face, absurd.

Our country can act nobly and often has. ACA was a nice start, but now we need to move to a system that treats people, not “insurees”.

"Call the Midwife": If Britain could afford to create a National Health Service after WWII, we can now!

The main argument against not cutting (not to mention expanding) social services, including health care, for the most needy, is that we “cannot afford it”. This is the argument of the governors and legislatures in states that have refused to expand Medicaid, despite clear and convincing evidence that it will cost states much more to not do so (see Medicaid expansion will leave out many of the poorest: What is wrong with this picture?, May 26, 2013). This is portrayed in a very funny – except it’s really not -- “Daily Show” segment, cited by Dr. Allen Perkins in his blog, “Training Family Doctors”, Medicaid Expansion by the Numbers. Not being able to “afford” it is the mantra not only in the US, but also across Europe as those austerity hawks have been cutting off their people’s noses – and their election chances – in thrall to a false god.

So it was very interesting for me to watch the first episode of the British (BBC One) television series (now in its second season) “Call the Midwife”. Set in a poverty-stricken area of East London in 1957, midwives pedal their bicycles around the crowds of people and rubble that still covers the streets more than a decade after the end of World War II to attend to

pregnant women in their homes, delivering prenatal care and babies and even caring for the babies afterward. It is a not a beautiful scenario; the young midwife, Jenny Lee (based on the real life midwife Jennifer Worth, whose memoirs form the basis for the series and who died in 2011) has never seen such poverty, such crowding, such filth, so many children. It is the height of the “baby boom”, attributed initially to returning GIs who had to wait to start their families, but continuing with no end in sight; the women portrayed are having their fourth or fifth baby in their early 20s and many far more. In fact, of course, the end of this “boom” was not the aging out of the reproductive population but the introduction of effective and widely available contraception (especially birth control pills) in the 1960s.

The midwives, all nurses and many Anglican nuns, set up clinics in a gym in the interval between the pensioners’ breakfast and the evening dance classes, as well as attending women at home. They practice an obstetrics that is quaintly anachronistic, both in its tools (the wooden “fetoscope” to amplify the fetus’ heart sounds, and the glass rectal tube), and in practice (shaving the pubic area and administering enemas – “high, hot, and a helluva lot!”) but they provide much safer pregnancies and deliveries than had ever been available to this population in the past. At one point, a woman in her 23^rd (!!) pregnancy (already with 24 children, because of two sets of twins) goes into premature labor and the midwife is there to deliver what seems to be a stillbirth and begin care for the hemorrhaging mother while awaiting the arrival of the “obstetrics flying squad” with its ambulance, obstetrician, and pediatrician to continue to care, including blood transfusion in the home. When, miraculously, the baby comes to life, the mother refuses to send it to the hospital, feeding it milk with a dropper. The senior midwife tells Jenny that “we don’t ever care for these babies anymore; in the old days they died; now they go to the hospital.” When asked what they will do, she tells her they will visit three times a day until the baby is stable, and then at least once a day thereafter. In the home.

It is a dramatic and engaging story, but what fascinates me is that these services were available to these poor women. Home visits for prenatal care and delivery. Visits from nurses three times a day. An obstetrics “flying squad” to come to the homes of women who would otherwise die in childbirth. Where did the money for these services come from? Who paid these midwives, and these flying squad doctors? Well, the National Health Service (NHS). The NHS, established after the war, in 1948, to provide health care to all people in the UK. Not established at a time of prosperity, when we could “afford” it, but right after World War II, with both the nation’s economy and its literal infrastructure in shambles, with the piles of rubble still on the streets of London in 1957, 15 years after the Blitz. The National Health Service was not founded as a gesture of magnanimity from the wealthy, but as but as an explicit and well-thought out policy to provide one of the most basic of needs, health care, to all of the British people even though there was not much money; it was seen as a priority. In the second episode of "Call the Midwife", a woman who has lost 4 babies because of a pelvis contracted from rickets (vitamin D deficiency in childhood) is delivered of a healthy baby by Caesarean section. Rickets itself, the senior midwife says, is a disease of poverty and malnutrition eliminated by the NHS.

From the time I went to college and met upper-middle-class people, through my career as a doctor when I know lots of them, I have heard “horror stories” about the NHS, about the waits for things “we” never have to wait for, like elective surgeries. “My cousin says”, or “the people we had visiting from England told us”. But it was always apparent to me that this was a skewed group; the folks visiting from Britain on holiday were not the poor, were not the Welsh coalminers who had never had health care before. It is hard, I guess, when you have always been at the front of the queue, when the queue has always been so short for you that you didn’t even know there was one, to have to take your place in it; to wait in line with the hoi polloi. But ask those who never had had care, ask the poor, ask the women having babies in the Docklands.

My point here is not to romanticize poverty, or to suggest that things have always been perfect with the British NHS. It is, rather, to say that the provision of basic health care to all people is not and never has been a question of economics, it has always been a question of will. We can afford do it; indeed we cannot afford not to. Not only is it a “good investment”, it is essential humanity. Paul Krugman calls the group of health care expansion opponents “The Spite Club”, (June 7, 2013), arguing convincingly that their opposition is ideological, not fiscal. It is doubly sad to see this ideology acting in Europe, cutting the social safety net that has been in place there for decades.

When you think about what we can “afford” in health care, think about midwives making home visits to premature infants three times a day in the poorest areas of London in 1957. The expansion of Medicaid under the Affordable Care Act (Obamacare) may not be the best vehicle to bring care to the poorest (I still argue for a single-payer, Medicare-for-all, system), but opposing it is not fiscally responsible; it is both fiscally and morally reprehensible.

Medicaid Expansion: Do we care for people or not?

A cornerstone of the health coverage reforms in the 2010 Affordable Care Act (ACA) was the expansion of Medicaid to a large population currently ineligible for this benefit. This was intended to cover those who work but have low wage jobs that neither offer health insurance nor sufficient pay to buy health insurance on the private market. (This latter is, in itself, a a very large obstacle; most people in “high-wage” jobs – considered by the Department of Labor to be above about $45,000 a year -- would have great difficulty paying for private health insurance.) In most states, Medicaid covers two populations: children in very poor families and their mothers (in general, if there is a father in the home, the family is not eligible) and poor people in nursing homes (who may well not have been poor until they spent time in a nursing home). Although the first group is much larger, the latter costs much more money because the health care services that they require are so much greater.

The standards for income eligibility vary from state to state, but in many states, including Kansas and Missouri (the states on either side of the Kansas City metropolitan area) it is well below the poverty level. Childless adults, unless they qualify for physical or mental disability, are rarely eligible for Medicaid no matter how poor. Medicaid is a federal/state shared program; depending upon mean state income, the federal government pays 60-80% of the cost. In order to make expansion more acceptable to many states that are already financially strapped, ACA provides for the federal government to pay 100% of the cost of the expansion for the first 3 years, and 90% thereafter. But, nonetheless, this expansion is in jeopardy in many states, because, essentially, the governor, legislative leaders, or both, oppose having the government insure most people. The decision by the Supreme Court that upheld ACA struck down the plan to pull all Medicaid funding from states that did not opt for expansion, thus seriously weakening the leverage that the federal government has to encourage it.

“Paul Nelson works for $10 an hour at a Kansas City car shop, suffers from diabetes and can’t afford the medicine to deal with it,” write Steve Kraske and Jason Hancock in the Kansas City Star, April 27, 2013. In “Nixon’s pleas for Medicaid expansion go unheeded”, they describe how “The working father still earns too much to be eligible for Missouri’s Medicaid program. That’s why he was hoping — praying may be a better word — for an expansion of the program this year so that he could get health coverage.” Nelson is the kind of person who might benefit from Medicaid expansion, but is probably not going to get it because the Republican-controlled Missouri legislature is so opposed to expansion, despite the strong lobbying efforts of Democratic Governor Jay Nixon, who “…displayed more gusto for the cause than any issue since he became governor in 2009…”  is now regarded as “…dead, buried, gone.” Nixon had considered the federally-funded expansion a “no-brainer”, and the fact that “An early February poll by American Viewpoint, which usually surveys for Republicans, found that voters backed expansion by 56-35 percent once they heard ‘a balanced set of arguments for and against the proposal,’” has not swayed the legislature.

In Kansas, Republican governor Sam Brownback has been playing it close to the vest regarding this issue, but Kansas legislative leaders are very strongly opposed to expansion. Brownback engineered the elimination of any opposition to his very conservative policies by running opponents to “moderate” GOP senators (the House was already in the control of the far right) in the 2012 primaries. With major funding from the Koch brothers, abetted by the traditionally low and skewed-to-the-base turnout in primaries, almost all were victorious; even the President of the Senate, Steve Morris, a rancher from far southwestern Kansas, was defeated by a young and inexperienced, but well-financed, challenger. On one issue, funding for higher education, Brownback is currently staking himself out as a relative moderate, compared to legislative leaders, as he is opposing the cuts that they have proposed. If perhaps a bit suspect, since not only did he engineer their victories but his prior budgets have significantly cut higher education, it could potentially signal a willingness to do something similar with Medicaid.

Meanwhile, as the continuation headline for the Star article, “Obama’s switch hurt efforts here”, makes clear, the administration has added its own disincentive to that of the Supreme Court by backing off on cutting Disproportionate Share (DSH) payments to hospitals that take care of a high percentage of Medicaid and uninsured patients. This weakened the commitment of hospitals and their agents, the state hospital associations (and, even more the Chambers of Commerce, which never really support publicly-funded health insurance expansion in any form) to supporting Medicaid expansion. Most still do, though, because they have been counting on expansion of Medicaid to increase their revenue from patients (like, say, Paul Nelson) who were previously uninsured and make up for cuts in Medicare payments, which are already taking place.

But much more important than the financial interests of hospitals or doctors, much more important than the posturing of politicians, is the impact on actual people. Paul Nelson is one person, but there are hundreds of thousands of people in his position in Kansas and Missouri, and many millions in the US. Their numbers are increasing; in an article in the Washington Post about the “Governments may push workers out of employer health care and into health exchange”, cited by Don McCanne’s “Quote of the Day” for April 26, “The owner of Olive Garden and Red Lobster restaurants, for example, began experimenting last year with putting more workers on part-time status.” While the focus of the article is on insurance exchanges, the probability is that low-wage workers who are put on part-time status would be more likely to qualify for Medicaid expansion.

Opponents of Medicaid expansion, in Missouri, Kansas, and elsewhere, often sound concerns about the cost, despite the fact that the federal government will pick up almost all of it. On the finances, they are wrong. But of greater concern they are not really motivated by their flawed understanding of economics, they are motivated by a lack of concern for people who are not like them, and a commitment to policies which expand the wealth of the richest individuals and biggest corporations at the expense of regular people. As the “American Viewpoint” survey points out, it is not the belief of most people, who do care about the health needs of themselves, their friends and neighbors and relatives. And, maybe even, other people who they don’t know.

The ACA, even with Medicaid expansion, even with insurance exchanges, even without changes to DSH or Medicare, does not cover everyone. Glaringly missing are those who, although without papers, are here, working in our community, living by our sides, often paying in through taxes (sales for sure, and frequently income) and sometimes needing health care, as well as others who fall outside the complexities of health insurance coverage. What we really need is an expanded Medicare-for-all, “everyone in, nobody out”. This is the real rational plan. But ACA does cover children up to the age of 26, it will prevent insurance companies from denying coverage to those with pre-existing conditions, and if states proceed with Medicaid expansion, will cover a whole lot more people who desperately need it.

People like Paul Nelson. People like the folks across the street. Maybe people like you. Our people.