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June 2, 2015

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j. patrick coolican:

Medicaid expansion should be a no-brainer for Nevada

J. Patrick Coolican

J. Patrick Coolican

If Nevada doesn’t expand its Medicaid program, one result is that people will die. That’s the stark conclusion we can draw from a New England Journal of Medicine study, which found that in states that expanded their Medicaid programs, mortality rates declined 6.1 percent, with the largest declines among minorities and older adults.

So, if you’re against Medicaid expansion, you’re for a higher mortality rate, especially among our most vulnerable populations. Provocative? Yes, maybe even demagogic, but no less true for being so.

The reality, of course, is that when it comes to health care policy, we must make trade-offs that are both cruel and necessary. We’d probably also have a lower mortality rate if we stuck a paramedic in every home, but we’re not going to do that because the costs would far outweigh the benefits (though I suspect the firefighters’ lobbyists will propose this at the next legislative session.)

When it comes to expansion of Medicaid — the federal-state health insurance program for the poor and disabled — the benefits far outweigh the costs.

The federal government would pay 100 percent of medical costs for newly eligible Medicaid recipients through 2017. By 2020, federal funding would drop to 90 percent.

Nevada currently has one of the stingiest Medicaid programs in the country; Medicaid covers just 12 percent of Nevada adults, the lowest in the country, according to the most recently available data from Kaiser State Health Facts.

According to Gov. Brian Sandoval’s spokeswoman, Mary-Sarah Kinner, there are 308,000 people on Medicaid in Nevada, with natural case load growth expected to push that to 334,000.

The state expects an additional 49,000 Nevadans will enroll in Medicaid as a result of the Affordable Care Act’s individual mandate that requires everyone to get some kind of insurance. (These Nevadans are currently eligible for Medicaid, but haven’t enrolled.) This will cost the state $60 million.

Kinner said Nevada Check Up (Children’s Health Insurance Program) is expected to increase by 20,000 children. Again, these are eligible children who haven’t been signed up. This will cost $11 million, which is a pittance compared with the benefits of delivering basic health care to 20,000 children.

The federal Medicaid expansion will add an estimated 72,000 Nevadans to the Medicaid program by the end of the next biennium; there would be administrative expenses associated with the expansion, though the state hasn’t determined the cost yet.

Some will argue that this attempt to provide everyone access to basic medical care is an example of cradle-to-grave welfarism. Indeed, in one of the riveting moments of the Republican presidential primary debates, CNN’s Wolf Blitzer asked a hypothetical question about someone who chooses not to purchase health insurance and then gets in an accident and requires care: “Are you saying society should just let him die?”

Some in the crowd yelled, “Yeah!”

It’s an interesting debate, whether basic medical care is a right or a privilege, at least for people who read Ayn Rand novels. (I loved “The Virtue of Selfishness” when I was 17. In retrospect, it was age-appropriate.)

But this question of right vs. privilege has to some degree been answered, not just by other industrialized democracies, which guarantee some basic care, but also by the United States.

The Emergency Medical Treatment and Active Labor Act, signed in 1986 by the Great Man himself, President Ronald Reagan, was passed “to ensure public access to emergency services regardless of ability to pay,” notes the Centers for Medicare & Medicaid Services. Private hospitals had been engaging in what’s called “patient dumping,” sending uninsured sick people to public hospitals. The law required hospitals that take Medicare funding — which is 98 percent of them — to screen and stabilize the sick and injured, regardless of ability to pay. Through regulations and legal rulings, the scope of the law has expanded, according to Dr. Joseph Zibulewsky, in a paper in the Baylor University Medical Proceedings.

The upshot is that our hospitals treat a lot of patients without insurance. Nevada’s 17 major hospitals, meaning those with more than 100 beds, absorbed $767 million in uncompensated care in 2011. Some of that is due to reimbursement rates for Medicaid and Medicare that are lower than the cost of providing care; but some of it is from treating people without insurance and no means of paying.

Although patient dumping is illegal, our sole public hospital, University Medical Center, bears the biggest brunt of those costs.

Discussion of the Medicaid expansion in Nevada thus far seems to have missed this point — that expanding Medicaid, with mostly federal dollars, would lighten the burden on UMC and, thus, lighten the burden on county taxpayers.

As Brian Brannman, the CEO of UMC and a retired Navy rear admiral, told me in a recent interview, UMC provides between $200 and $250 million in uncompensated care. In the emergency department, between 20 and 25 percent of the patients have either Medicaid or Medicare, which is the government’s socialized insurance program for people 65 and older. Government reimbursement rates aren’t enough to cover the hospital’s costs, but patients on government insurance are better than the alternative. One quarter of emergency department patients are “self-pay,” which means they have no insurance and either pay cash or pay nothing. The hospital recoups just 6 percent of those patient costs, Brannman said.

“We’re a black hole, insofar as we have to provide care, and we often won’t get paid,” he said.

The hospital produces significant revenue to make up for all that uncompensated care, but it still has a $60 million operating loss. County taxpayers own UMC, which means we eat that loss.

Brannman is urging policymakers to strongly consider expanding Medicaid.

Maura Calsyn, associate director for health policy at the Center for American Progress, notes, “Everything in the entire system is interconnected. If there’s pressure in one place, they’ll look to other places where they can actually receive payments, meaning private payers.” In other words, if they can’t get paid by some, prices go up for everyone else.

If some of those non-paying patients were enrolled in an expanded Medicaid program, the hospital would lose less money, and county taxpayers could get some relief.

Finally, here’s another reason to expand Medicaid: Although it won’t be free for state taxpayers, it will lead to an influx of federal money — $1.8 billion between 2014 and 2019. I don’t know about you, but I feel like our economy could use a $1.8 billion infusion. And given our mediocre medical care here, health infrastructure seems like a good place to invest federal money.

Health care accounts for about 18 percent of America’s gross domestic product. In Nevada, as my colleague David McGrath Schwartz recently pointed out, health care is just 12 percent of our economy. One would like to think that’s because we have a super-efficient health care system the rest of the country should emulate. But that’s not it. Rather, we have a shortage of medical care here. And, because of our health care’s perceived mediocrity, many patients go elsewhere, such as Southern California, to receive care.

That’s why the governor’s own economic development plan notes that an improved health care system is a fast and no-brainer strategy for economic diversification and tens of thousands of good jobs. The federal government is offering $1.8 billion to help us do it.

Expanding Medicaid is the humane and prudent policy choice, so I’m sure we won’t do it.

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