When our state of Arizona announced last year that it would participate in “Obamacare’s” Medicaid expansion, the law’s supporters declared a victory for the poor and their health care. Reality hasn’t been so cut-and-dried.
As a physician, I have dealt with Medicaid on a regular basis. In my experience, the program, while well-intentioned, does not live up to its expectations and is not on par with private insurance. Expanding this broken program will only further ingrain its problems into our health-care system.
Medicaid’s flaws ultimately stem from its rigid, one-size-fits-all nature. Far too much of the program is decided by bureaucrats in Washington and not by local leaders at a municipal or state level. Ultimately, this lack of local control undermines Medicaid’s ability to help the poor.
First and foremost, Medicaid’s top-down approach misallocates money and resources. Since it isn’t personalized, the program in general treats every patient the same. This inefficiency drives costs up. States, trying to keep the program affordable, respond by driving reimbursements to doctors down. State governments can also take money away from other priorities such as education, transportation and security.
Most of the time it’s a mix of these two options. According to the National Association of State Budget Officers, in Arizona, 32 percent of state expenditures was spent on Medicaid in 2012. This is already significantly above the national average of 23.7 percent; it is also significantly more than the 22.8 percent spent on Medicaid in 2008. Over this same period, spending on elementary and secondary education has decreased from 27.5 to 19 percent of state spending.
At the same time, states are often forced to slash already low Medicaid provider reimbursements. According to health-care policy expert Avik Roy, in Arizona in 2008, Medicaid payments to primary-care physicians were only 78 percent of private rates. As costs increase under the Affordable Care Act, it is very likely that these already low reimbursements will decrease even further.
For doctors, these low reimbursements sometimes don’t even cover the costs — both medical and administrative — that Medicaid patients incur at their office. As a result, along with the administrative hassle of the program, more and more doctors are refusing to participate in the program.
This perverse turn of events — the result of poor policy — ultimately leaves Medicaid patients with substandard health care. With fewer doctors to see them, they often experience lengthy wait times. The longer they wait, the worse their health problems get and the more likely they are to turn to expensive and overcrowded emergency rooms for help.
Multiple studies bear this out. One recent study found Medicaid patients have higher death rates following surgery. With throat cancer, Medicaid patients are 80 percent more likely to have tumors that spread to one lymph node than patients with private insurance.
After heart angioplasty, they are 59 percent more likely to have “major adverse cardiac events” like strokes and heart attacks. Other studies show similarly depressing trends in other medical fields. Health-care policy expert Scott Gottlieb has called Medicaid “worse than no coverage at all.”
This is what Arizona’s Medicaid patients now face. What will really help them is Arizona getting more control over Medicaid. We need the flexibility to work with local and regional resources to meet the local needs of the underinsured and uninsured. Most importantly, Arizona needs the flexibility to tailor benefits to individual beneficiaries.
Ultimately, Medicaid is a program in need of more reform, not more beneficiaries. Yet that’s not what Obamacare’s Medicaid expansion has done.
In Arizona, as elsewhere, expansion will only extend Medicaid’s problems to more people. This is not a victory, especially for the people trapped in this broken program.
Jason Fodeman practices medicine in Tucson, Arizona.