In his April 21st Op-ed, ‘Our Obsolete Approach to Medicaid’, Governor Scott Walker characterized Medicaid and Medicare as obsolete for apparently nothing more than being created in 1965 while he tried to make a case for Medicaid block grants.
The letter touts a database created by the Wisconsin Health Information Organization (WHIO), an organization that compares quality and cost of care of participating Wisconsin medical providers.
While I applaud the transparency goals of the WHIO project, it simply does not allow health consumers to compare their 'costs across providers’ as Mr. Walker suggests.
According to Jo Musser, VP of Business Development at the WHIO, the database “does not provide reimbursement rates” but rather reflects the statewide “standard average cost of care based on mix and use” and does not factor the provider’s region or area of service.
In Mr. Walker’s letter, he claims to have “asked Washington to add its data to our database, but it has not done so.” However, federal data has been publicly and readily available for quite some time. The U.S. Department of Health and Human Services publishes provider reimbursement rates and offers quality information from participating hospitals for consumers. They also offer robust pricing tools. Further, the CMS data and the WHIO data are apples and oranges because they use different approaches in calculating cost of care. The Medicare and Medicaid reimbursement methodology considers the provider’s immediate demographic to help improve access to care in rural areas. CMS standards, guidelines and data are heavily used throughout the health care industry. In fact, many private insurance companies contract with providers using the CMS rates as a benchmark.
Although created in 1965, Medicare and Medicaid have constantly progressed, and today offer far more transparency on clinical standards, reimbursement rates and quality than anywhere else in our commercial health care market.
Now unfortunately, we have chosen to apply free market principles to health care. For discussion’s sake, let us forget that the crux of free market theory relies on rational choice. In reality, we all know that our health care system couldn’t be farther removed from anything resembling a free market. We also know that rational choices are unlikely when it comes to the care our loved ones, but I digress…
If we are going to continue operating health care under the auspices of the free market, let us begin to treat it as such.
If we really want to slow rising health care costs, let’s make insurance reimbursement rates readily available to consumers. After all, if we want to reap the efficiencies from our free market model, cost-effective providers and savvy consumers need to be rewarded. Many will argue that the consumer’s choice is made selecting a health plan ‘at the kitchen table,’ but these exchanges are not made pari passu. In fact, one could easily argue that health insurance policies fail to meet any of the secondary moral constraints of contract theory. And lastly, this exchange is just too far removed from the consumer-style decisions that could actually lower costs. Instead, insurers can pass along cost increases and there’s no incentive to economize.
The irony here is that while some will argue that exposing insurance reimbursement rates would drive some providers out of business because they won’t be able to compete on a cost scale, thus reducing access to care, particularly in rural areas -but block grants would effectively do the same thing! If states moved to block grants and used statewide average costs of care, it would drive some providers out of business who are unable to compete, thus reducing access to care in some areas. The CMS reimbursement methodology is better. State block grants would hurt accessibility to care by allowing individual states to effectively cut services under the guise of pushing “states to behave more responsibly.” And the last thing we need is reduced care.
Medicaid is not obsolete, but rather a progressive leader in the charge for better health care. They offer incentives to providers that use electronic health records. They offer pay for performance incentives to providers. They publish their clinical guidelines, reimbursement methodologies, reimbursement policies and their pricing tools. Ask yourself how many insurers do the same. I’ll admit the reimbursement amounts of Medicaid need to be improved. But if anything, we should be pushing our commercial markets to operate more like Medicare and Medicaid.
No comments:
Post a Comment