“Maybe you’re better off not having the surgery but taking the pain pill.” – Barack Obama
by Andrew Walden
Governor Neil Abercrombie (D-HI) on Friday announced he will be imposing a new system of medical care on many Hawaii’s 270,000 Medicaid recipients—focusing first on those with chronic conditions. There will be no public hearings. There will be no Legislative or Judicial oversight.
Medicaid underpays hospitals and physicians. The hidden purpose of Abercrombie’s move is to help keep the insolvent Hawaii Health Systems Corp hospitals afloat under State control by reducing the number of money-losing Medicaid patients seen at HHSC hospitals. At stake, HGEA and UPW control over 4,200 jobs.
This is nefarious enough, but there is more. The real savings Medical Homes could give to HHSC do not come in the emergency room but in elder care and neo-natal care. Medical Ethicist Josephine Ensign explains:
(The) statement that ‘frequent flyers’ to the emergency departments (EDs) were what was “taking down the US health care system”…(comes) not only from ED physicians, but also from many other community-based and academic physicians…. At some level I can forgive the ED physicians for their incorrect beliefs, since they have a necessarily myopic view of the health care system. … It is beginning of life care (hospital care for premature babies) and end of life care (mainly heroic hospital care for the elderly)—and the high cost, including administrative/insurance ‘overhead,’ that is taking our health care system down.
In Abercrombie’s 382 word dictat, words like funds, revenues, expenditures, and fiscal occur in almost every sentence. The statement features Orwellian phrases like: “…rather than focusing primarily on the treatment of illness….” and “…providing accessible alternatives to inappropriate or unnecessary hospital admissions….”
The Star-Advertiser reports that:
“The state…will not require any health care providers to participate or tell them how to set up the integrated care.” But, “The state pays health care providers who competitively bid for contracts to treat Medicaid patients, (and) the federal Center for Medicare & Medicaid Services administers the funding for the new program.”
“(Abercrombie’s Department of Human Services Director, Patricia) McManaman emphasized that the state will try to encourage integrated health care by offering payments for the new program.
“The new model will help the state get the most out of the money it spends, he said, adding that the private sector is also contributing to it, including the Omidyar Foundation.”
KHON outlines the effect of the “payments” Abercrombie intends to “offer”:
“Since primary physicians are rewarded for keeping healthcare costs down, critics say it creates a conflict of interest between a patient and his or her doctor.”
Abercrombie did not estimate the savings to the corporatist State, but a September, 2010 analysis of Medical Homes systems by the Robert Wood Johnston Foundation, published in Health Affairs, shows savings ranging from $71 to $640 per patient per year.
Multiplied by 270,000 Medicaid patients statewide, Abercrombie’s plan could reduce expenses $19M to $172M. In contrast, Abercrombie’s abortive unilateral 60-40 medical coverage giveaway to government employees’ unions last December was projected to cost the State $126M per year. As always, social services are about the unions, not the needy.
But this is just the tip of the iceberg.
Health Affairs points out that Medical Homes proposals come not from doctors and patients but “health care purchasers, including large employers.”
The Heritage Foundation describes the current realities of Medicaid:
Medicaid is a costly and unsustainable welfare entitlement program that delivers low-quality health care to many of its enrollees.[1] Low provider payment rates in many states mean that Medicaid recipients have a hard time finding a doctor, forcing many to rely on expensive and overcrowded hospital emergency rooms for non-emergency care. Medicaid patients frequently receive inferior medical treatment, are assigned to less-skilled surgeons, receive poorer post-operative instructions, and often suffer worse outcomes for identical procedures than similar patients both with and without health insurance.
By 2020, the Patient Protection and Affordable Care Act, commonly known as Obamacare, will enroll up to 25 million additional people in Medicaid,[2] raising the total number of Americans enrolled in Medicaid at any one time to more than 70 million.[3]
In Hawaii these conditions are exacerbated by a doctor shortage and a key reason for Hawaii’s doctor shortage is the state’s low level of Medicare/Medicaid remuneration. Abercrombie—in his 20 years in Congress—failed to pressure the US Health and Human Services Centers for Medicare and Medicaid Services to amend Hawaii's Medicare/Medicaid “Geographic Practice Cost Indices (GPCIs)” which factor along with the “Resource-Based Relative Value Scale (RBRVS)” to ensure that doctors in Hawaii are deeply underpaid.
A related problem is that the Hawaii State Legislature has refused to join with other states in raising Medicare/Medicaid reimbursement rates to physicians and hospitals under HRS 346-59. This is due entirely to a misguided effort by Hawaii Democrat legislators to keep the failing HHSC on life support in order to prevent divestiture of the HHSC hospitals into independent non-profit medical providers.
Joseph Antos, an economist at the American Enterprise Institute puts it succinctly:
"If all we're doing is rearranging the deck chairs on the medical Titanic, and spending more money, that's clearly not something we want to do."
What further compromises could Medical Homes impose on the lives of the poor?
Health Affairs explains:
“Physicians involved in a medical home initiative by Group Health, a system in Washington State and northern Idaho, saw fewer patients; the number of patients for which each physician was responsible dropped by 20 percent.
“A test of medical homes carried out from 2006 to 2008 and known as the TransforMED National Demonstration Project found that patient satisfaction actually declined with the patient-centered medical homes transition…..
“…the Geisinger Proven-Health Navigator project reduced hospital admissions and readmissions for Medicare Advantage patients by 18 percent and 36 percent, respectively.”
If Medicaid accepting physicians reduce their patient load by 20%, thousands of Hawaii Medicaid patients will be without any physician.
Medical Homes are often compared to Health Maintenance Organizations which were widely criticized for obstructing and even denying lifesaving medical care to save money. Is that how the Geisinger Proven-Health Navigator project knocked down hospital admissions? A key element determining whether this critique applies to Medical Homes will be whether the patient’s care is managed by a physician or by a bureaucrat. This is a State of Hawaii program: Some questions answer themselves.
An interesting clue to the push for Medical Homes comes from a July 7, 2009 analysis of North Carolina’s ACCESS Medical Homes program by The Disease Management Purchasing Consortium:
The DMPC announced today that North Carolina Medicaid’s “ACCESS” program may have cost the state more than $400 million in 2006 rather than saving the state roughly $300 million in 2006….
DMPC found that greater access to free primary care did indeed modestly reduce inpatient claims and even more modestly reduce emergency room visits, but at a high cost. The rate of visits to specialists, and the rate of claims for all other resources (testing and therapies) both climbed dramatically. “Our observation is very predictable, in retrospect,” says Lewis. “More access to primary care generates more primary care, which in turn generates more testing, therapies, and specialist referrals. The data in North Carolina shows that some of that preventive care does indeed replace inpatient care, but most of it doesn’t. In general, I think we are all collectively deluding ourselves that giving people more access to more free care without managing the care would decrease their use of care. Access without utilization controls is a recipe for overuse of care and higher costs.”
Then the kicker:
While the savings claims are invalidated by this data, the good news is that the North Carolina ACCESS program concept does indeed work, in the broadest sense of the word. “The decline in asthma admissions of roughly a quarter is the largest DMPC has ever found. But at what cost? It appears that overall, each inpatient day avoided correlated with about $18,000 in extra non-inpatient resource use,” Lewis noted.
This explains everything. In the face of looming HHSC privatization forced by insolvency, Neil Abercrombie is trying to reduce the use of HHSC hospitals by low-reimbursement Medicaid patients. His goal is to stem the HHSC’s operating losses so that HHSC can remain a quasi-governmental corporation and its employees can remain within the UPW and the HGEA.
Because of Hawaii’s lack of long-term care beds, LTC patients at HHSC hospitals are often backed up into more expensive Acute Care beds and Acute Care patients are then backed up into Critical Care beds. It should be a simple matter to build more nursing homes, or re-allocate the beds in HHSC hospitals, but either of those solutions would reduce the number of HGEA and UPW jobs while also reducing the flow of unnecessary insurance dollars to the HHSC.
Instead of correcting this situation by selling HHSC hospitals to non-profit medical operators who will re-capitalize the operations and bring in expertise and equipment, Abercrombie is merely trying to remove money-losing patients from the mix. This is a desperate and inevitably futile effort to hold on to State ownership and keep 4,200 employees under the control of HGEA and UPW.
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