Poor, Not Dumb
A New Model for Sensible Reform of Healthcare
by Linda Halderman, M.D., FACS
Private Papers
Within the national debate over healthcare reform, an assumption has been revealed in several proposals: Healthcare decisions for poor Americans are best left to the U.S. Government.
As a former rural Breast Cancer surgeon whose practice consisted largely of uninsured and underinsured women, I’ve seen the quality of decision-making offered when decisions are shifted from patients and their doctors to Sacramento bureaucrats.
In 2006, Medi-Cal (California’s version of Medicaid) denied payment for one of my patient’s Breast Cancer surgery due to “incorrect gender.” She was as surprised as her doctor. After five appeals and nine months had elapsed, Medi-Cal finally paid me $253 for the two-hour cancer operation and 90 days of follow-up care.
Government Waste
So I am a bit skeptical at the reform proposals made by California’s Republican Governor and at least three Democratic Presidential candidates. All include a greater role for government in funding and directing medical care for lower income populations.
All would swell the number of citizens whose coverage is subsidized and managed under State and Federal programs.
Medi-Cal now covers one in six Californians, and the U.S. government currently spends 45% of its healthcare dollars to cover 27% of the population via Medicaid and Medicare. U.S. taxpayers watch their hard-earned dollars wasted on inefficient, top-heavy bureaucracies with little accountability for how much is actually spent on patient care.
Earlier this year, the Centers for Medicare and Medicaid Services admitted that millions of dollars were lost when the Atlanta-based oversight firm hired to detect Medicare payment fraud wrongfully rejected payments made to hospitals and doctors, making overpayment allegations on cases they were not authorized to review. This increased the corporation’s government-paid “bounty” for this work, a hefty $0.25-0.30 for every dollar of overpayment supposedly uncovered. Unraveling this attempt at accountability will likely take years.
The Current System
Currently, Medicaid expenditure per enrollee is nearly $7,000 per year. This high cost “health plan” gives recipients access to long wait times for fewer doctors, guaranteeing little ability to make healthcare decisions for themselves and their families. Arbitrary decisions made by government employees — nearly 6,000 in California alone — overrule recommendations made by doctors and nurses sitting beside their patients in exam rooms across the state.
Medicaid’s astonishing administrative costs compound the problem. According to 2005 data from the Center for Medicare and Medicaid Services, over 31% of every dollar spent by Medicaid did nothing to provide medical treatment.
A New Way
There is a better way to help vulnerable Americans receive high quality medical care while protecting the taxpayer, without expanding an already bloated bureaucracy.
I propose that the $580 plus per month now paid for every man, woman and child covered by Medicaid would be more effectively, responsibly spent as follows:
1. Low cost private insurance plans are now available throughout the U.S. Instead of funneling $580 to Medicaid, a private health insurance policy with a $2,400 deductible could be purchased for less than $200 per month for most enrollees. Private plans for healthy, younger recipients often cost less than $100 per month.
2. To cover this deductible for those without resources, a Health Savings Account (HSA) would be funded according to poverty level guidelines now used to determine Medicaid benefits.
For example, Medicaid recipients at 200% of the federal poverty level would have their HSA fully funded at $200 per month to cover the entire deductible, with a sliding scale for those with somewhat higher incomes.
3. For high-risk patients with chronic medical conditions, a risk pool like California’s “Managed Risk Medical Insurance Board” would be used to obtain more affordable policies than would otherwise be available. This protects taxpayers from the expense associated with covering sicker patients while ensuring that coverage remains available for those who need it most.
Under this model of Medicaid reform, the worst-case scenario would bring the $7,000 yearly federal and state expenditure down to $5,000 for every person covered. For younger, healthier patients covered by the program, costs would be considerably lower.
Common Sense Reform
This model, which uses low cost, high deductible plans with the safety net of a private Health Savings Account, reduces costs to the taxpayer. It offers accountability by limiting HSA use for qualified medical expenses.
It protects vulnerable patients from financial disaster during years when they need expensive medical care while lowering costs during “healthy” years instead of mandating ever-expanding Medicaid funding. It restores healthcare decision-making to patients and families with the guidance of their doctors instead of relegating these choices to a faceless “Treatment Authorization Request” form or government employee with the power to interfere in the most private of decisions…those involving our health.
Most important to me as a doctor whose rural practice was destroyed by the frustrating, unsustainable bureaucracy known as Medi-Cal, this model for reform increases quality healthcare access for those with few other options.
I sustained a personal and professional loss when I was forced to stop providing services as the only Breast Cancer Surgery specialist in a 70-mile radius in central California who still accepted Medi-Cal. I could no longer afford the $10,000-$15,000 monthly hemorrhage related to reimbursement so low it would be cheaper to close my office doors.
But my own loss is nothing compared with what the women who will be diagnosed with Breast Cancer in my community will face. “Coverage” with a government-funded “insurance plan” for them offers no coverage after all.
The stakes are high in the national healthcare reform debate. But the rewards of improving the way we approach care for those without resources are great. I hope our legislators are listening; my patients surely are.
Dr. Halderman (www.lindahalderman.com) is a Board-Certified General Surgeon practicing in rural central California.
