Medicaid Pay Cut in California Reflects National Trend

State Medicaid programs are dealing with the loss of federal stimulus funds in the current fiscal year with their favorite belt-tightening move: cutting rates for physicians, hospitals, and nursing homes, according to a new survey by the Kaiser Family Foundation (KFF).

Case in point: the Centers for Medicare and Medicaid Services (CMS) yesterday approved a 10% pay cut for physicians and other providers sought by California's Medicaid program, called Medi-Cal.

Medicaid, which provides health insurance coverage to some 60 million Americans, is funded jointly by the federal government and the states, with the federal share currently ranging from 50% to 74%.

The recent recession strained the ability of states to fund their share in 2 ways — putting more Americans on Medicaid rolls, and reducing state tax revenue.

Even with the federal bailout, some states decreased physician reimbursement rates — 8 in fiscal 2009, 20 in fiscal 2010, and 14 in fiscal 2011.

At the same time, the number of states giving Medicaid raises steadily declined. Other states simply froze their rates. For physicians, such trends only made a bad reimbursement situation even worse — Medicaid typically pays less than Medicare and private insurers anyway.

Federal law requires Medicaid programs to pay high enough rates to ensure an adequate supply of providers who are willing to care for beneficiaries. However, since the program's inception in 1965, there always has been the fear that subpar rates would cause providers to turn away Medicaid patients,

Not all cost-cutting tactics such as chopping provider rates, tightening eligibility standards, or taking away benefits, are actually decreasing costs.

This emphasis on quality shows up in the increasing reliance on managed care. In fiscal 2012, 24 states are expanding their Medicaid managed care programs, up from 17 in fiscal 2011, according to the KFF report.

Managed care that was supposed to serve as a vehicle for pay-for-performance, which requires physicians to report quality measures such as preventive-screening rates and health outcomes for specific patient populations, has failed to either improve the quality of care or access to appropriate level of health care.

Another managed care tool is the patient-centered medical home, designed to better coordinate the care of those with chronic illnesses. Unfortunately, this  tool became yet another tool to deny access to care and to save money for managed care companies.

Interestingly, the Sunbeam Medical Association, aka American Medical Association (AMA),  a "Johny-come-lately" to physician-provider partnership cause, is silent on the mater? Shame on them!

This, yet another, cut in Medi-Cal reimbursements will further deny the access to appropriate care by causing more physicians and facilities to opt out of Medi-Cal.

We report, you decide!

From Mangled Care to Direct Health CarING©

The process of health carING© is almost insurmountable in its multifaceted complexity, thus according to the rules of non-linear dynamics it simply can not be “managed”.

What can be managed, meaning rationed, are the ever-rising costs of such carING©.

“Managed care” is a primary oxymoron by default; in its present form is best described as mangled care.

When originally introduced to our naive country and promoted by then ,and still, misguided and ill qualified Mrs. Clinton and her Jackson Hole Task Force, mangled care was, defined as:

" A prepaid risk-based system of integrated health care delivery, having appropriate capabilities to improve quality of care and manage utilization and cost of a given population.” (Thomas Morrow, MD., at NMHCC/IT Fall 1998, Los Angeles, CA)

These for-profit extremely profitable mangled care companies have embraced, and function under divergent and practically mutually exclusive core values.

On one hand, these companies are obligated to provide rather than ration health care services.

On the other, their entire existence hinges on their obligation and ability to generate consistent profits for their executives and shareholders.

More often than not, provision of appropriate health carING© and profit margins of mangled care companies come into direct conflict.

This conflict fuels a “double explosion” of the system: while availability and quality of health services goes down; costs of services to purchasers and profits of mangled care companies go up.

This abominable situation creates significant financial “counter-incentives” to provision of appropriate, accessible, affordable health carING© which can be gauged by the divergence coefficient.

Such counter-incentives further negatively effect already financially squeezed powerless and frequently frustrated health providers.

In addition to divergent and conflicting core values, double explosion, financial counter-incentives and overall patient and provider frustration there is, what I coined, business disconnect.

Entire purpose for insurance, companies, HMOs and other "mangled" health care organizations existence is to grab as many pennies from consumer’s health care dollar as they are allowed to by the workers.

Business disconnects exist due to interlined logistical, financial, physical and ethical aspects of mangled health care:

•The recipient usually does not request, does not order, or pay for the service.

•The payor never requests, does not receive, nor order the service.

•The orderer does not pay, nor receive the service.

In order to achieve their business objectives, here are some of the strategies used:

•If someone is already paying a lot, let him or her continue.

•Even if a lot of people complain about managed care quality, it won’t contain cost.

•Never provide coverage unless the treatment is unpleasant.

•Quality is being in a waiting room with people who earn more money than you do.

Please visit www.workingamerica.org/healthcarehustle maintained by AFL-CIO for real life stories.

Despite such an unorthodox business model, they do grab a sizable chunk: 17 cents out of every healthcare dollar without actually working, being sick, or providing services.

Here are three of many “secrets” in health carING © that health insurance companies do not want health consumers to know:

• Health consumers can request and receive health carING© from doctors, nurses,

pharmacists, hospitals, labs, pharmaceutical companies, and others without mangled care.

• Doctors, nurses, pharmacists, hospitals, labs, pharmaceutical companies, and others can

provide health carING© without mangled care.

• Healthcare consumers can pay for health carING© without mangled care companies.

Only complete elimination of mangled care as the middle man, can generate enough money to provide appropriate, accessible and affordable health carING©.

Patient-driven health care model promoted by mangled care must give way to direct health consumer-administered health carING ©.

I, for one, am willing to make a difference and show the way.

We are making a difference (MAD), you decide!

"Mangled Healthcare" for All

With great fanfare the Consumer Federation of California (CFC) announced on February 27th, 2007 that "...every Californian deserves access to high quality, affordable health coverage"--a noble concept, indeed.

I certainly agree that “Our health care system is a disaster for the uninsured and insured alike. Nearly seven million Californians are uninsured. Co-payments for workers are skyrocketing, and businesses that cover their employees are being crushed under the rapid escalation in insurance premium rates."

When originally introduced to this naive country and promoted by then, and still, misguided and ill qualified Mrs. Clinton and her Jackson Hole task Force, it was defined as: " A prepaid risk-based system of integrated health care delivery, having appropriate capabilities to improve quality of care and manage utilization and cost of a given population.” (Thomas Morrow, MD., at NMHCC/IT Fall 1998, Los Angeles, CA)

Here are my postulates of "Mangled Care" vs Managed CarING:

•If someone is already paying a lot, let him or her continue
•Even if a lot of people complain about quality of managed care, it won’t contain cost
•Never provide coverage unless the treatment is unpleasant
•Quality is being in a waiting room with people who earn more money than you do

Managed care is an oxymoron by default--this system that should have been providing health carING, while managing costs--in its present form is better described as mangled health care.

The for-profit (and very profitable) “managed care” companies have embraced, and are functioning under divergent and practically mutually exclusive core values.

These companies are obligated to provide (or rather severely ration) health care services. They are also obligated to generate consistent profits for the executives and shareholders of those companies.

When the provision of proper health care and managed care companies profits come into direct conflict, it creates a “double explosion” of the system, where the availability and quality of health services goes down, while costs of services and mangled care companies' profits go up.

This abominable situation creates significant “counter-incentives” to provision of appropriate, accessible, affordable health carING to Californians, which can be gauged by the divergence coefficient.

In addition to the conflicting core values, “business disconnects” exist due to logistical, financial, physical and ethical aspects of mangled health care:

•The recipient usually does not request, does not order or pay for the service.
•The payor never requests, does not receive nor order the service.
•The orderer does not pay nor receive the service.

Governor Schwarzenegger, a traditional foe of pro-patient health care reforms, now says he wants to address the health care crisis. Unfortunately, the governor’s proposal puts too much of the burden on the uninsured, and it fails to control cost increases. Similarly, Sen. Kuehl “Zelda’s Single Payor Legend” falls far short of the target.

While it’s true that every other industrial democracy offers universal health coverage to its citizens, it does not translate into universal health carING, and in the case of Canada and England is actually counter-productive.

Surely, universal health care made some inroads in Hawaii, but only because it is a State with a super tight control of population---there are no immigrants (especially illegal) pouring over the boarder from the rest of the world. California, from the point of health care services, is a perpetual bottomless barrel, with fixed amounts of moneys paying into the system, while an ever-increasing numbers of residents generate a snowball demand for services.

Before declaring that health care (not just basic and/or catastrophic), but in fact “appropriate” (cosmetics?) health care “…is a right, not a privilege – and every Californian deserves access to high quality, affordable health coverage…” the CFC might want to clarify the definition of a “Californian” to prevent even faster emptying of the “bottomless barrel”.

CFC’s purposely trying to confuse general public and exert undue influence on Legislators by implying that just because they are uninsured resident of California, they are uncared for. Nothing can be further from the truth--the tax-paying and health insurance-paying Californians are actually paying for the care of the un/under insured.

I also disagree with CFC’s assertion on the issues of providing “…universal health insurance for all Californians at no added cost simply by taking the for-profit insurance industry waste out of the system and using those dollars for the delivery of health services”.

Health consumers can request and receive health carING from doctors, nurses, pharmacists, hospitals, labs, pharmaceutical companies, etc, without mangled care companies.

Doctors, nurses, pharmacist, hospitals, labs, pharmaceutical companies, etc, can provide health carING without mangled care companies.

Healthcare consumers (Payors) can pay for health carING without mangled care companies.

Only complete elimination of the middle man-managed care companies can generate enough money to provide universal health carING.

Its time to move from patient-driven to health consumer-administered health carING.

California Government can only guarantee universal health care when all of the recipients of such care, including the illegals, pay their fare share.

Be Well!