Wednesday, April 6, 2011

A Note About Cutting Medicaid Funding

Okay, as it turns out, I know a thing or two (or 100) about health care in the US. I’ve worked in the industry for years, and I’m a bit of a policy wonk.

So … states are cutting Medicaid funding. On the surface, this probably sounds great to a lot of people. Poor people, getting a handout from the state/federal government while the rest of us have to pay out of pocket for our health insurance? Screw them.

What these people don’t understand, though, is that cutting medical assistance to the poor is going to harm all of us financially in the long-term by increasing costs across the board.

Don’t believe me? Here’s how it works…

Let’s say Joe McPoor, who is covered by Medicaid, is in his kitchen making dinner one night. His hand slips and he gives himself a deep cut in his forearm with the knife he’s using.

He grabs a towel, yells to his girlfriend, and they run to the urgent care clinic and get him stitched up. He’s home in two hours. The clinic bills his Medicaid $1000, of which they get paid about $300 (because Medicaid payment levels are really low).

But, okay, Joe McPoor didn’t pay anything for his treatment out of pocket, so we taxpayers footed the bill for his $300 procedure. You think that’s unfair? Okay, fine, kick him off Medicaid. You taught him a lesson for getting a free ride on the taxpayers, and saved yourself maybe a dollar in your tax bill.

But you also screwed yourself over. Because if Joe McPoor doesn’t have Medicaid when he slices his arm, you know what he does? Bandages it up and stays home rather than going to the hospital. No stitches, since he doesn’t have the money for a health care premium, much less treatment for a non-life-threatening condition.

So great, you haven’t had to fork over your share of the $300 for his stitches. You win, right? That’s what the Tea Party tells us!

Sure, you save money – as long as he has no complications from having a gaping wound in his arm while going about his life. But what if the wound doesn’t heal, and perhaps starts to get red, painful, and perhaps starts to leak some pus? Joe’s eyeing his arm, but now he knows that he’d have to pay even more to get it taken care of, so he starts putting hydrogen peroxide in it and getting some painkillers from his buddy and hoping the problem goes away.

Then one day the pain grows too unbearable and his forearm is turning black, so Joe presents himself to the ER in his city. The doctors find that the tissue in his forearm is dying, and that he’s developed blood and bone infections from living for so long with a gaping wound. Legally, doctors can’t turn him away for a life threatening condition, so they admit him for IV antibiotics. A week later, he leaves the hospital, all healed up but facing a bill for $500,000.

Joe didn’t go to the doctor initially because he couldn’t afford $300. Do you think he’s going to pay $500,000? Of course not. He’ll go to collections, and the hospital/doctor will never see that money. And Joe learned his lesson.

But guess what? The doctor and hospital are not going to be content with losing that $500k. And they’ll never get it from Joe. But you know where they will eventually recoup that money from?

You. The insured people. The people who pay your bills. No one’s going to send you Joe’s $500,000 bill, but what doctors/hospitals will do is increase the fees they charge their paying patients, and ultimately this will increase what you pay in deductibles, coinsurances, and premiums (since insurance companies aren’t going to be content to pay those higher fees without passing the costs along to you). You may not have paid your share of Joe’s $300 ER bill, but now you’re going to pay an extra $100 or so every year to your doctor thanks to him not having coverage but also trying to keep himself from dying when a problem gets too bad to ignore.

What’s cheaper – treating very early stage breast cancer when the patient first notices a lump, or treating it once it’s metastasized to all of the patient’s organs and lymph nodes? An office visit and cholesterol medicine to treat high cholesterol and mild chest pain, or treatment for a massive heart attack and stroke?

Keep in mind – if these poor people aren’t willing or able to pay private insurance premiums, they aren’t going to be able pay tens of thousands of dollars in hospital bills either.

But neither are providers going to be content to just accept that financial loss. The rest of us will pay, via higher doctor fees and higher insurance premiums. Ultimately, it’s going to cost a lot more than the miniscule portion of your tax dollars that goes to fund Medicaid.

Cutting Medicaid hurts us all.

No comments:

Post a Comment