Blog Archives

Medicare chief Tavenner stepping down; oversaw rocky health care rollout

News Alert: Medicare Chief Tavenner stepping down!!!! 

Here is the article:

WASHINGTON — Medicare chief Marilyn Tavenner — who oversaw the rocky rollout of the president’s health care law — says she’s stepping down at the end of February.
In an email Friday to staff at the Centers for Medicare and Medicaid Services, Tavenner, a former Virginia health secretary and hospital executive, said she’s leaving with “sadness and mixed emotions.”

Tavenner survived the 2013 technology meltdown of HealthCare.gov, but was embarrassed last fall when she testified to Congress that 7.3 million people were enrolled for coverage. That turned out to be an overcount that exaggerated the total by about 400,000.

Calling Tavenner “one of our most esteemed and accomplished colleagues,” Health and Human Services Secrerary Sylvia M. Burwell said the decision to leave was Tavenner’s.
Principal deputy administrator Andy Slavitt will take over as acting administrator.

The Future of Medicaid, a POPPED Balloon, and Proposals

There are more people on Medicaid than Medicare.

Think about that.  There are more people in America who qualify for Medicaid than Medicare.  Yet, as a nation, we spend more on Medicare than Medicaid.  (I assume because the older population requires more expensive services).  58 million people relied on Medicaid in 2012 as their insurance.

And Medicaid is growing.  There is no question that Medicaid is growing.  When I say Medicaid is growing, I mean the population dependent on Medicaid is growing, the demand for services covered is growing, and the amount of money required to satisfy the demand is growing.  This means that every year we will spend more and more on Medicaid.  Logically, at some point, at its current growth pattern, there will come a point at which we can no longer afford to sustain the Medicaid budget.

If you think of the Medicaid budget as a super, large balloon, imagine trying to inflate the balloon more and more.  At some point, the balloon cannot withstand the amount of air being put into it and it…POPS.

Will Medicaid eventually POP if we keep cramming more people into it, demanding more services, and demanding more money to pay for the increased services?

First, let’s look at the amount of money spent on Medicaid last year.

The Center for Medicare and Medicaid Services (CMS) just released the 2013 Actuarial Report on the Financial Outlook on Medicaid and its report considers the effect of Obamacare.

The CMS report found that total Medicaid outlays in 2012 were $431.9 billion.

The feds put in $250.5 billion or 58%.  States paid $181.4 billion or 42%.  In 2011, the federal government’s percentage of the whole Medicaid expenditure was 64%.

The CMS report also made future projections.

“We estimate that the [Affordable Care] Act will increase the number of Medicaid enrollees by about 18 million in 2022 and that Medicaid costs will grow significantly as a result of these changes starting in 2014.”

The 10 year projection, according to the report, is an increase in expenditures at an annual rate of 7.1%.  By 2022, the expenditures on Medicaid will be $853.6 billion.

Just for some perspective…a billion is a thousand million.

If you sat down to count from one to one billion, you would be counting for 95 years (go ahead…try it!).

If I gave you $1000 per day (not counting interest), how long would it take you to receive one billion dollars?  Answer: 2,737.85 years (2,737 years, 10 months, 7 days).  Now multiply 2,737.85 years by 853.6.

That’s a lot of years!!

In the next ten years, average enrollment is projected to reach 80.9 million in 2022.  It is estimated that, currently, 316 million people live in America.

So the question becomes, how can we reform, change, alter (whatever verb you want to use) Medicaid so that we can ensure that the future of Medicaid is not a POPPED balloon?  While I do not have the answer to this, I do have some ideas.

According to the CMS report, per enrollee spending for health goods and services was estimated to be $6,641 in 2012.  I find this number interesting because, theoretically, each enrollee could use $6,641 to purchase private insurance.

Remember my blog: “A Modest Proposal?” For that blog, I used the number $7777.78 per enrollee to purchase private insurance, which would require an increase in Medicaid spending assuming we give $7,777.78 to each enrollee.  But think of this…the amount would be a known amount.  Not a variable.

My health care, along with health care for my husband, costs $9,000/year.  My cost includes two people.  If I wanted individual insurance it would only have cost $228/month or $2,736/year.

What are other options to decrease the future Medicaid budgets and to avoid the big POP:

  • Decrease Medicaid reimbursements (really? Let’s make LESS providers accept Medicaid);
  • Decrease covered services (I would hope this idea is obviously stupid);
  • Decrease the number of recipients (I believe the ACA shot this one out of the water);
  • Create a hard cap on Medicaid spending and refuse to allow services over the cap regardless of the medical necessity (Again, I would hope this idea is obviously stupid);
  • Decrease administrative costs (this is apparently an impossible feat);
  • Create more difficult standards for medical necessity (I believe the ADA would have something to say about that); or
  • Print more money (Hmmmm…can we say inflation?).

Please, if anyone else has a good idea, let me, or, better yet, your General Assembly, know.

Because without question the future of Medicaid is larger and more expensive than today.  We want to avoid that…

POP!!

Demand With Little Supply: Medicaid Enrollment Up, Physicians’ Acceptance of Medicaid…Not!

In microeconomics, you learn the theory of supply and demand, which is, basically, a model to determine the price of a product. The most basic explanation of supply and demand is if the demand for the product is high and the supply is low then the price of the product will be high. Take diamonds, for example. Whenever there is a finite amount of something the value goes up. I remember my dad telling me to invest in land abutting water. The reason? There is a finite amount of land abutting water. Once all the land is sold that touches water, it is gone unless someone decides to resell.

Similarly, there is a finite number of doctors or health care providers who accept Medicaid. Recently data show that Medicaid enrollment has jumped 3 million since October 2013. There are approximately 61 million Americans on Medicaid and approximately 319,510,848 Americans total. This increase in Medicaid enrollment is mainly due to 26 states expanding Medicaid due to the ACA, although Medicaid enrollment has increased in the states that opted to not expand as well.

That’s GREAT…..right?? 3 million more people are covered by health insurance than were covered back in October 2013. However, although theoretically the statistic should correlate to more people getting medical coverage, it may not.

We cannot assume that offering people Medicaid coverage will necessarily provide them with adequate access to health care services.

While the number of people on Medicaid is climbing, there is no evidence that the number of providers who accept Medicaid is climbing.

Health-care consulting firm, Merritt Hawkins, conducted a 2014 survey of Medicaid acceptance rates in the U.S.’s largest 15 cities. The 2014 survey researched five medical specialties: cardiology, dermatology, obstetrics-gynecology, orthopedic surgery, and family practice. It also calculated the average wait-time for Medicaid recipients to see a doctor in one of the five specialties.

The survey found that only 45.7% of physicians are now accepting Medicaid patients. This is a decrease from 55.4% in 2009 and 49.9% in 2004. Compare the percentage of physicians accepting Medicare, which is 76%.

The percentage of physicians accepting Medicaid varies immensely state by state. In Dallas, TX only 23% of physicians accept Medicaid; whereas in Boston 73% of the physicians accept Medicaid (but even though Boston seems to have more physicians accepting Medicaid, the wait time is not good; the average wait time to see a dermatologist in Boston is 72 days).

Much of the problem is high population and low percentage of doctors. See the table below.

Physician ratio

Even more of the problem is that physicians refuse to accept Medicaid. So, looking at the above chart, and based on an estimated current U. S. population of about 319,510,848, there are two physicians for every 845 persons. Yet, only 23% of physicians accept Medicaid in Dallas. Less than half the physicians nationally accept Medicaid. So, of the 845 physicians, roughly 422 of the physicians will refuse to accept Medicaid. More and more Medicaid insured people will have fewer physicians. This is a scary thought.

Remember the horrible tragedy of Deamonte Driver? Even though Deamonte Driver died due to not seeing a dentist, not a physician, the analogy still applies. A 12-year-old Maryland boy, Deamonte Driver, died when a tooth infection spread to his brain. His mother, Alyce Driver, had been unable to find a dentist to treat him on Medicaid. Deamonte Driver died not because he was uninsured; he died because he was insured by the government.

Now imagine that it is not a dentist a parent is trying to find, but a cardiologist, where, in D.C., if you are on Medicaid, the average wait-time to see a cardiologist is 32 days. If only your heart problems would pause for 32 days.

The average cumulative wait times to see a cardiologist in all 15 markets was 16.8 days. Whereas if I were to call up a cardiologist, I would be able to make an appointment within a day or so.

I found a blog online that charted why doctors will not take Medicaid. See below.

doctors no medicaid

See blog.

To physicians, Medicaid is a pain in the arse that reimburses them too little to warrant the pain.

Medicaid recipients suffer.

Going back to the 3 million increase in Medicaid enrollment…that’s great, right? Maybe. It depends whether the recipients can find a doctor.

NC is #1 in USA!! (For Highest Percentage Increase in Total Medicaid Spending)…and What About the Rest of the USA?

On October 21, 2013, the magazine Modern Healthcare published an article, “Medicaid budgets By State,” which showed each state’s total Medicaid spent in 2012, total number of Medicaid enrollees in 2012, and average spending per enrollee in 2012.

Where does North Carolina rank in terms of our Medicaid budget versus other states?  We hear constantly that we spend all this needless money on administrative costs of Medicaid.  But, in terms of our Medicaid budget, where do we rank?  And my next question…do we simply have more Medicaid recipients in NC in relation to other states?  Is NC’s average spending per Medicaid enrollee grossly higher or lower than the national average?

Inquiring minds want to know!

Surprisingly, at least to me, Alaska has the highest average spending per Medicaid enrollee: $13,073, on average, per enrollee.  But then I thought about, much of Alaska is rural…not only rural , but almost impossible to navigate due to the snow and ice.  I don’t know for sure, but I would imagine that getting to and from Medicaid recipients or getting recipients to services (while not always reimbursed by Medicaid) must impact some of the costs.

[Important to note: The average spending per enrollee, to my knowledge, does not mean actual money spent per enrollee.  I believe the authors took the total budget and divided it by the number of enrollees.  So the average spent per enrollee includes built-in, administrative costs.]

Or…Maybe Alaska has a low number of Medicaid recipients and that is why Alaska spends the most per enrollee…maybe Alaska has a huge Medicaid budget without many recipients on which to spend it…few people, big pie…

I looked.

Alaska had, in 2012, 109,000 Medicaid recipients.

The fewer people you have at Thanksgiving, the bigger the pie pieces.  However, interestingly enough, Alaska spent $1.425 million total in Medicaid in 2012.  Delaware spent $1.421 in Medicaid in 2012. (Close enough, right?).  Yet, Delaware spent $6831, on average, per enrollee.  Maybe the pie analogy doesn’t work.  Maybe sometimes, even with a big pie and few people, too many rats and ants nibble at the pie.

Out of 50 states, where do you think NC falls?  Top 10 highest spender?  Bottom 10?  Right in the middle?

Drum roll……..

#9.

The only 8 states that spend more than NC per Medicaid recipient are:

1. Alaska

2.  New Jersey (somehow that did not surprise me) ($11,433/recipient)

3. Rhode Island (that did surprise me…I mean, look how little RI is…how big a Medicaid budget can it have?) ($11,080/recipient)

4.  North Dakota (a less populous state (less tax dollars), I believe) ($10,969/recipient)

5.  Pennsylvania ($10,835/recipient)

6.  Minnesota (there are big cities there (more tax dollars), no surprise) ($10,080/recipient)

7.  Missouri  (I went to law school in Missouri. This number surprised me a bit).  ($10,022/recipient)

8.  Connecticut ($9883/recipient)

9.  NC ($9,430/recipient)

Crazy! What about Illinois? With the hugely populous, Windy City and it being Obama’s home state, surely, Medicaid spending per recipient is, at least, in the middle, right?

Wrong.  Illinois is dead last with only $5229, on average, per recipient being spent.

Probably because too many people were invited to Thanksgiving…in 2012, Illinois had 2.626 million Medicaid recipients enrolled….or too many rats and ants.

Compare to NC in 2012 – 1.471 million Medicaid recipients.

What was Alaska’s Medicaid budget/spending in 2012 that the average spending per enrollee was $13,073?

$1.425 million spent.  Up 10.3% from 2011.  And 109,000 Medicaid enrollees.

Here is NC:

Spending: $13.872 million. Up 22.8% from 2011. And 1.471 million recipients.

Here is a crazy one..Nevada:

In 2012, Nevada had 301,000 Medicaid enrollees.  A little under 3x Alaska.  Nevada spent $1.692 million on Medicaid (only 200,000-ish over Alaska), but Nevada’s average spending per enrollee was $5,621 (less than half of Alaska and the third lowest amount spent per enrollee).  Where did all Nevada’s Medicaid money go?? Rats and ants eating away the pie?

North Dakota has the very least number of Medicaid enrollees in 2012…66,000.  Wyoming is a close second with only 67,000 Medicaid enrollees in 2012.

North Dakota was the 4th highest state as to spending per enrollee with an average of $10,969/enrollee.

Wyoming was the 16th highest state as to spending per enrollee with an average of $8537/enrollee.

Guess which state had the highest total spending on Medicaid in 2012?

Drum roll…..

California. (Shocker!). California spent $47.726 million on Medicaid, up 4.2% from 2011.  California also had the highest number of enrollees on 2012 with 2.624 million enrollees (over a million more than NC).  California also spent the 5th lowest on average per enrollee, $6,065.

Having a high number of enrollees did not always have a direct correlation with spending the least, on average, per enrollee.  Oregon only had 569,000 Medicaid enrollees in 2012 and spent the 4th lowest amount, on average, per enrollee, $6,007.

New York is the closest state to spending and number of recipients to California, but New York succeeded in a much higher average spending per enrollee than California.

New York spent $39.257 million total on Medicaid (less than $8 million difference from California) in 2012.  New York had 5.004 million enrollees (2.8 million Medicaid enrollees less than California) and spent, on average, $7845/enrollee (absolute, dead-on-middle as compared to all states).

Georgia is, perhaps, the most comparable to North Carolina in terms of number of Medicaid enrollees in 2012.  NC = 1.471 million enrollees in 2012.  GA = 1.529 enrollees in 2012.

NC spent $13.872 million, while Georgia spent $8.497 million in 2012.  So, Georgia had MORE Medicaid enrollees and spent over $5 million less……

Is that good or bad?  Is Georgia more efficient?  Did Georgia spend less in administration costs?

Actually (albeit there may be other factors), Georgia spent significantly less, on average, on each Medicaid enrollee.

Georgia spent 2nd lowest, on average, per Medicaid enrollee.  Only Illinois surpassed Georgia in lowest spending, on average, per enrollee.  Georgia spent, on average, $5,229 per enrollee.

NC spent $9430, on average, per enrollee. (Which, BTW, is more than enough for my “A Modest Proposal”).

That is a huge difference!

One other number jumped out at me when I reviewed Modern Healthcare‘s article, “Medicaid Budgets By State.”  Remember I told you that NC spent $13.872 million on Medicaid in 2012…and that the amount spent was a 22.8% increase from 2011?

22.8% is a high percentage to increase in only one year!

I looked at the increases/decreases of the states.  North Carolina gets the award for the highest percentage growth in spending on Medicaid in the entire nation.  NC was the only state whose percentage “increase of Medicaid spending” percentage from 2011 to 2012 was in the 20s.

NC is #1 in the nation for percentage increase as to total Medicaid spending!!!! (Proud?)

The next state with the highest increase in spending on Medicaid is Mississippi with a 17.4% increase in spending from 2011.  Next in line is Alabama with a 14.7% increase in Medicaid spending.

Guess which states decreased its Medicaid spending the most from 2011 to 2012?

Drum roll…

Oregon (decrease of 23.2% spending) and Illinois (decrease of 15% spending).  Is it coincidental that Illinois spent the absolute least, on average, per Medicaid recipient and that Oregon spent the 4th lowest, on average, per Medicaid recipient?

Regardless the size of the pie, the number of guests, and the number of rats and ants, we need to make sure that the guests (Medicaid recipients) are benefitting most from the pie.

Sometimes a decrease in spending equals a decrease in services to Medicaid recipients…sometimes not…I guess it depends on the number of rats and ants.