June 13, 2011
Caring for the Underserved: The Holes in the Safety Net are Getting Bigger
While nephrologists are very familiar with the uniqueness of the Medicare entitlement for ESRD patients, the critical importance, structure, and challenges to the Medicaid program that directly impact ESRD patients are less well known. Medicaid came into being in 1965 part of the same legislation that created Medicare. It was designed to be complimentary to Medicare- to provide a safety net for the support of health care delivery to individuals who could not afford to pay for care. Medicaid is different from Medicare however, since it is financed through a Federal/State sharing of cost program. There are no limits on what a given state can spend on its Medicaid program, and the Federal spending match is determined by formula varying from 50% of state costs (in 18 states) up to 74.3% (in Mississippi). The matching formula is based on state per capita personal income compared to the national average.
The current economic recession has been a disaster for Medicaid programs and there is no light at the end of that tunnel. Falling state revenues and an incredible increase in the enrollment in Medicaid programs have driven states to draconian measures to stop the bleeding. By the end of 2009 nearly 49 million Americans, one in six, were covered by Medicaid. Although MIPPA increased the Federal share of costs temporarily, that is coming to an end, and after July 1st of this year the Federal contribution will return to pre-2009 levels.
How are states responding to this crisis? Not rocket science- cut reimbursement to providers, renew the push to move Medicaid patients into managed care, create more restrictive medication formularies, and eliminate some high cost procedures from the list of covered services. The result will be less access to care, increased use of emergency services and withholding of medically needed services- all leading to unacceptable health outcomes for some of our most vulnerable.
For patients with ESRD significant Medicaid cuts proposed in North and South Carolina, Louisiana, Texas, Minnesota, California, Illinois and many other states could be devastating. But in the face of these challenges, nephrologists and the renal community have an opportunity to step forward and help states understand that creative approaches to improving quality for Medicaid patients with ESRD can also drive lower costs. Removing barriers to permanent access placement and avoiding catheter placement; increasing the emphasis on starting home therapy as an initial dialytic modality; initiating care coordination/care management in Stage 4 CKD are just three of the ways states could save money by investing in better care.
As a renal community we need to get involved in our individual states, educate them about the ways better quality for ESRD patients can control costs in their Medicaid programs and then we need to partner within our states to make this ideas become reality. I had the privilege of spending 1994-95 working with Senator Paul Wellstone from Minnesota. He stated:
“ …how can we live in the richest, most privileged country in the world, at the peak of its economic performance, and still hear [from politicians] that we cannot afford to provide a good education for every child, that we cannot afford to provide health security for all our citizens?”
— Paul Wellstone (The Conscience of a Liberal: Reclaiming the Compassionate Agenda)
Like Senator Wellstone I know we can do better.
I look forward to your comments, until next time.
Striving to bring quality to life,
Allen R. Nissenson, MD
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Kay Bostick M.S.W. said,
June 17, 2011 @ 5:14 pm
As a nephrology social worker I appreciate Dr. Nissenson’s comments on the Medicaid cuts. It is inconceivable that our government would cut Medicaid benefits for the most needy persons in our society. I believe that access to proper health care should be a right for every citizen not a privledge. I see so many kidney dialysis patients who would have had longvity and a better quality of life if they had the proper medical care before initiating and continuing through their life span on dialysis.
Allen Nissenson said,
June 17, 2011 @ 5:54 pm
I agree entirely, Kay and would like to hear comments from some of the “healthcare is a commodity” folks so we can have an open debate on this point.
Catherine Cooper said,
July 16, 2011 @ 6:59 am
Twenty of my thirty nursing years have been spent in chronic hemodialysis. In early years we had a more holistic approach with the nephrologist orchestrating most of the primary care. For urban and underinsured patients we need on-site primary and urgent care. Why isn’t Davita interested in offering this type of service ? Patients would be out of the ED and have better quality care and more continuity with their care if there were other services provided on-site.
Let’s be clear, these patients get turfed out of everywhere,
we see them 3 days a week, if we were allowed to be more
involved it would the perfect opportunity to improve outcomes.
Bob Gutman said,
August 25, 2011 @ 6:23 am
As some of the commentators point out below, this is not a perfect, or long enough study. But it does seem so suggest some interesting trends. Giving poor more coverage does make them feel better and does decrease the sense of needing to borrow money. It did not seem to improve health otherwise or to reduce ER use. What do you think?
PERSPECTIVE
The Effects of Medicaid Coverage — Learning from the Oregon Experiment
NEJM | July 20, 2011 | Topics: Medicare and Medicaid
Katherine Baicker, Ph.D., and Amy Finkelstein, Ph.D.
There has been much debate, especially in light of the health insurance expansions in the Affordable Care Act and the current fiscal crisis, about the costs and benefits of Medicaid. Some have argued that Medicaid doesn’t deliver much in the way of real benefits, either because it pays providers so little that beneficiaries have trouble gaining access to care, or because the low-income uninsured already have reasonable access to care through clinics, uncompensated care, emergency departments, and out-of-pocket spending. Others have argued that providing Medicaid coverage to the uninsured would reduce total health care spending by improving health and reducing inefficient use of hospitals and emergency rooms. Ultimately, the costs and benefits of Medicaid are empirical questions.
One might think that these questions would have been settled with data long ago, but they are notoriously difficult to resolve.1,2 Comparisons of the insured and the uninsured can yield misleading results, because the two groups differ in many ways (such as income and baseline health) that are difficult to control for fully and that affect the outcomes of interest, such as health and the use of health care. For example, if less healthy people are more likely to find a way to obtain Medicaid, one might perversely conclude from comparing the health of those with and without Medicaid that Medicaid is bad for one’s health.
Working with a team of researchers, we have taken advantage of an unprecedented opportunity to gauge the effects of Medicaid coverage on low-income, previously uninsured adults, using the gold standard of medical and scientific research: a randomized, controlled trial. In 2008, Oregon used a lottery to allocate a limited number of Medicaid spots for low-income adults (19 to 64 years of age) to people on a waiting list for Medicaid. Those selected by random lottery draw won the opportunity to apply for Medicaid. In total, about 30,000 people were selected from the 90,000 on the waiting list. Approximately 10,000 of those selected ended up being enrolled in Medicaid; not everyone who was selected successfully filled out the required application and met the eligibility criteria.
The lottery provides an opportunity to estimate the causal effects of being allowed to apply for Medicaid (intention to treat). It also allows us to estimate the causal effects of being enrolled in Medicaid relative to being uninsured (the effects of “treatment on the treated,” which we focus on below), under the assumption that selection by the lottery to be able to apply for Medicaid affects the outcomes we studied only through its role in increasing insurance coverage.
We now have evidence of the effects of the first year of Medicaid coverage after the lottery.3 These results are based on administrative data from hospital discharges, credit reports, and death records, in addition to mail surveys we conducted. We found that Medicaid coverage increases the use of health care. In particular, it raises the probability of using outpatient care by 35%, of using prescription drugs by 15%, and of hospital admission by 30%. We did not detect a statistically significant change in emergency room utilization, although our estimates were imprecise. Overall, we estimate that the increased health care use from enrollment in Medicaid translates into about a 25% increase in total annual health care expenditures.
That Medicaid increases health care use makes economic sense, since insurance reduces the price of care for the insured (in this program, there are no copayments). The increase in health care use is associated with more consistent primary care: people with Medicaid coverage were 70% more likely to report having a regular place of care and 55% more likely to report having a usual doctor; Medicaid coverage also increased the use of preventive care such as mammograms (by 60%) and cholesterol monitoring (by 20%). Although it’s possible that improved efficiency of care delivery could reduce overall spending, that does not appear to have happened in Oregon, at least in the short run.
What benefits accrue along with this increase in spending? We examined two potential benefits: financial protection and improved health and well-being. The financial protection aspects of insurance are too often overlooked in academic and public policy discussions. Just as fire insurance is designed not to prevent fires but to help financially when fire creates catastrophic financial losses, a key purpose of health insurance is to reduce the financial risk posed by catastrophic medical expenditures.
We found that Medicaid improves financial security. Medicaid reduces by 40% the probability that people report having to borrow money or skip payment on other bills because of medical expenses. Although it does not appear to reduce their risk of bankruptcy (at least in the first year), it decreases by 25% the probability that they will have unpaid medical bills that are sent to a collection agency. This effect benefits not only the insured but, since the vast majority of bills sent to a collection agency are never paid, also those who may ultimately help to finance this unpaid care, including health care providers and the public sector.
We also found that being covered by Medicaid improves self-reported health as compared with being uninsured. Medicaid enrollees are 25% more likely to indicate that they’re in good, very good, or excellent health (vs. fair or poor health). They are 25% less likely to screen positive for depression. They are even 30% more likely to report that they are pretty happy or very happy (vs. not too happy).
It’s hard to tell from the current data whether objective, physical health has improved. The evidence we have to date suggests that at least some of the improvements in self-reported health probably reflect a more general sense of improved well-being and reduced stress; for example, the improvements in self-reported health start to show up after only a month of insurance coverage and before health care use has started to increase. Of course, our findings of increased health care use and increased access to care suggest that physical health may also have improved or will improve. We will know more when we have data from the second year, when we collected information on physical health measures such as blood pressure, obesity, cholesterol, and blood sugar control. (Currently our only objective health measure is mortality, on which we were unable to detect an effect.) Whether it was health or general well-being (or both) that improved, both represent potentially important benefits of Medicaid, along with the reductions in financial strain.
There are, of course, limits to the lessons that can be drawn from this experiment. For example, the results are naturally specific to the study’s population, insurance plan, and health care environment. Coverage by private insurance, in different settings, or of people with very different characteristics than those who enrolled in Oregon’s Medicaid program might have very different effects. Moreover, the Oregon lottery insured only 10,000 adults. The system-level effects of insuring millions of people at once, including strain on the provider network and any changes in the delivery of care, might be quite different. In addition, our current results cover only the effects of the first year of insurance coverage. The long-run costs and benefits of Medicaid coverage may well be different.
That said, we believe that these results provide the best evidence to date on the effects of Medicaid expansions. Our results cast considerable doubt on both the optimistic view that Medicaid can reduce health care spending, at least in the short run, and the pessimistic view that Medicaid coverage won’t make a difference to the uninsured. We expect ongoing data collection to provide even more information about the longer-run costs and benefits of Medicaid coverage.
Disclosure forms provided by the authors are available with the full text of this article at NEJM.org.
This article (10.1056/NEJMp1108222) was published on July 20, 2011, at NEJM.org.
SOURCE INFORMATION
From the Department of Health Policy and Management, Harvard School of Public Health, Boston (K.B.); and the Department of Economics, Massachusetts Institute of Technology, Cambridge, MA (A.F.). The study discussed in the article was conducted by the authors along with Sarah Taubman, Bill Wright, Heidi Allen, Mira Bernstein, Jonathan Gruber, Joseph Newhouse, and the Oregon Health Study Group.
REFERENCES
Levy H, Meltzer D. The impact of health insurance on health. Annu Rev Public Health2008;29:399-409CrossRef | Web of Science
Institute of Medicine. America’s uninsured crisis: consequences for health and health care. Washington, DC: National Academies Press, 2009.
Finkelstein A, Taubman S, Wright B, et al. The Oregon health insurance experiment: evidence from the first year. NBER working paper no. 17190. Cambridge, MA: National Bureau of Economic Research, July 2011.
Download a PDF of this article
Read this article at NEJM.org
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7 RESPONSES »
Luis Alvarez
Physician
Milwaukee Wisconsin, USA
Disclosure: None
July 20, 2011 • 9:05 PM
The results of the article do not allow to tell if the overall cost of fealth care would be reduced in the long run. Prevention of disease and quick effective management of medical complications are what cuts costs in health care. In this sense it is discouraging to see that the Oregon Medicaid experiment only achieved a 35% increase in the use of primary care resources. Maybe if Medicaid reimbursement would be higher the increase would have been by 100%-200%. Also, the study group (19-64 years old) already has some sickness or wants to know if they have illness, especially if they are heads of household.
As expected, this article does not address the cost of healthcare in those age 65 or older, who end up being the money drain of health care.
Unfortunately and for different reasons, the system (private insurance, Medicare, federal offices, universities, etc) says it is way better to do some specialties than others. Until reimbursement changes there will be no incentive to do general Cardiology, Primary Care, general Pulmonary Medicine, Pediatrics and Psychiatry.
Martha Deed OH.D.
Other
North Tonawanda New York, USA
Disclosure: None
July 21, 2011 • 3:19 PM
My question for the researchers: People who are uninsured or under-insured often have unmet medical needs which, in the short run, could easily lead to more medical care and medical expense until their health needs “catch up” with the services available with Medicaid. So, I would have expected an uptick in medical expenses in the first year. And I would not draw a conclusion that Medicaid leads to higher medical costs from first-year results.
Have you accounted for this factor in your research? Perhaps through the use of a health questionnaire that would allow you to obtain a health need before and after snapshot?
I am concerned that your interpretation of your findings may lead to more resistance to taking care of the health needs of our poorest and sickest people without considering the issue of unmet medical needs.
peter lener OH.D.
Other Health Care Professional
NY New York, USA
Disclosure: None
July 21, 2011 • 7:43 PM
the best study I know of that address the issue of does it make a difference say in m mortality when they have access to medical care–it was a study in Scence Magazine years ago with the words Many Farms in the title–sorry I do n ot have the reference–if was a rural area I believe in New Mexico or Arizona that had full medical facilities available prior there where none–results medical care availability had no effect on mortality
Lynn Bailey
Other
Columbia South Carolina, USA
Disclosure: None
July 22, 2011 • 11:45 AM
Dr. Deeds does raise the question of what economist call pent up demand. There is research showing that the uninsured once covered by Medicare do for the first few years have higher rates of utilization until patients feel they have “caught up” on neglected care.
I don’t know that with one years worth of data the question can be answered. The other difficulty is that once a patient shifts from Medicaid to Medicare there is a different pattern of utilization since Medicaid benefits are richer than Medicare’s. Unfortunately the two do no compliment each other well.
Anna James
Other Health Care Professional
Anchorage Alaska, USA
Disclosure: None
July 22, 2011 • 7:02 PM
I have close friends in Oregon, one of whom “won” the Oregon Medicaid lottery. He received care for a medical condition which made the difference between being able to work or not (since there are very few jobs, he has only worked casual labor 1-3 days/week–but enough to lose food stamps); also able to get migraine medication so that instead of being deathly ill for a day, he can usually manage to stay productive. By the way, the mild increase in primary care use noted in Oregon could very well be due to the significant barriers posed by paperwork and limited provider availability.
As we look at statistics to try to figure out effects on the whole, sometimes it helps to understand what a change might mean to the individual. As a health care provider who is also insured, I am profoundly grateful that I could afford knee surgery making it possible to move freely and without pain, and that I can prevent asthma symptoms instead of trying to deal with them.
I am glad that this research, at least, looked at self-reported health. Whether or not this measure matters to decision-makers remains to be seen.
There are many, many conditions that won’t show up in any big way; conditions that simply mean that people without insurance will suffer pain, illness, or disability while people with insurance get treatment for their migraines, depression, and knee pain. In other words, health insurance for many will increase medical care usage without the benefit of decreasing cost of chronic disease. We all want to see medical care dollar spending result in measurable savings from prevention/early treatment of chronic disease. Is a goal of less suffering worth pursuing (especially when the decision-makers are not the ones who are suffering and possibly not able to work because of an easily treated medical problem)?
Danny Muskardin
Physician
Eagan Minnesota, USA
Disclosure: None
July 25, 2011 • 11:50 PM
I am a bit surprised that such data is presented secondhand in the NEJM from a paper/abstract published elsewhere. The authors cite use of an RCT, however without review of the actual data & study design, I know that I would be quite guarded to consider any study which appears to rely on subjective data assessment from the study populations (e.g. survey data), as substantial enough from which to draw any specific conclusions.
Anthony Borzotta MD
Physician
Cincinnati Ohio, USA
Disclosure: None
July 26, 2011 • 10:25 AM
The uninsured live with chronic conditions until they become medical emergencies or until they obtain some means to pay for desired care. Therefore the introduction of insurance will lead to an early increase in utilization for correction of symptomatic chronic conditions, as well as screening for and identification of asymptomatic chronic conditions. Treating such active conditions will require ongoing, potentially lifetime care.
The study cannot comment upon prevention of disease. This is determinable only when enough time passes after screening begins for a statistically valid quantity of disease to appear in the control group and not in the group of interest. Since many of the more costly diseases are not individually preventable (absent environmental, lifestyle or genetic alteration), medical care will be required by many people to help them manage chronic conditions. This implies lifetime, or societal, committment to ongoing consumption of low-expense health care. More problematic is how to differentiate between need and desire for expensive care: between one man’s back ache and another’s crippling low back pain, between quality of life or length of life.
Allen R. Nissenson said,
August 25, 2011 @ 10:29 am
The real questions here are: Were families protected from “medical bankruptcy”- the answer was yes. Did patients have better health outcomes? Harder to prove, particularly if mortality was the only outcome endpoint. I would suggest that if preventative care increased one would expect real improvements in key health outcomes, but this would need to be proven.