New law is fatally flawed and builds on failed ideas and a broken system

The recent report from the Obama Administration’s Centers for Medicare and Medicaid Services, which confirmed the healthcare bill will increase costs and cause 14 million Americans to lose employer-sponsored coverage, was yet another indication the new health law is not going to work as intended. 

Sooner or later, as more cracks in the plan develop, I believe it will be repealed and replaced with reforms that will truly lower costs and improve access.  

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The new plan is fatally flawed because it builds on failed ideas and a broken system.  Nowhere is this more evident than with the Medicaid program. Half of the uninsured Americans who will supposedly gain coverage through the plan will do so by being forced to enroll in Medicaid, a program going bankrupt and failing in its core mission of providing quality care to low-income Americans.  Adding 16 million Americans to Medicaid is a reckless entitlement expansion, not healthcare reform.   

Across America, Medicaid is bankrupting state budgets.  States cannot afford their current share of Medicaid costs, and many states spend more on their share of Medicaid than they do on K-12 education. 

At the same time, Medicaid is failing to serve the patients it was created to help.  Forty percent of physicians do not accept Medicaid patients because reimburse rates are so low. Any state Medicaid director in the nation will concede those who are on Medicaid face barriers to access. 

Medicaid patients also have worse outcomes than patients with private insurance.  A study published in the Journal of the American College of Cardiology in 2005 found Medicaid patients were almost 50 percent more likely to die after coronary artery bypass surgery than patients with private coverage or Medicare.  Another study published in the journal Cancer (2005) found cancer patients on Medicaid were two to three times more likely to die from the disease even after researchers corrected for differences in the location of the tumor and its stage when diagnosed.  

Patients on Medicaid face higher rates of infant mortality than those with private insurance.  In a study conducted from 2004 to 2006, the Hawaii State Department of Health found infant mortality rates were significantly higher among those with Medicaid when compared to births covered by private or military insurance. The Minnesota Department of Health found the infant mortality rate was 40 percent higher for Medicaid patients in a study conducted between 1997 and 2001.  The state of Washington found similar results – the infant mortality rate for Medicaid covered births was double the rate for non-Medicaid covered births.

In many respects, the new health law assumes expanding government will also expand coverage. The example of Medicaid, however, proves that access to a government program is not access to healthcare. 

Last year, I introduced a detailed health reform plan called the “Patients’ Choice Act” with Sen. Richard Burr (R-N.C.) and Reps.  Paul Ryan (R-Wisc.) and Devin Nunes (R-Calif.) that is one blueprint for how to reform healthcare, including Medicaid, when the new plan Congress just passed fails.   

The best way to serve low-income patients, I believe, is to remove the Medicaid stamp from their forehead and give them the buying power to make their own decisions.  Our approach would give Medicaid-eligible patients at the poverty level additional tax credits to help them buy their own insurance. Empowering individuals instead of the government would also save states nearly $1 trillion over ten years under our plan. 

Finally, the new health plan contains no meaningful mechanism to combat Medicaid fraud. In 2008, Medicaid’s total costs were $333.2 billion. According to the U.S. Department of Health and Human Services, the Medicaid improper payment rate is 10.5 percent or $32.7 billion, which is more than three times the average improper payment rate of other federal agencies.  In state of New York, the Medicaid fraud rate might be as high as 40 percent.

Still, HHS admits these numbers are their best guess – the numbers could be higher. HHS’ inspector general revealed the U.S. Government does not provide “timely, accurate, or comprehensive information for fraud, waste, and abuse detection.”  This is a startling admission by the government that we have no systematic way to track fraud in Medicaid.  

As practicing physician, I’ve seen first-hand what happens when well-intentioned but poorly designed government-run programs fail.  Those with financial means tend to buy their way to safety while those without means are the hardest hit.  By building on old ideas and a broken Medicaid system, the new health plan will fail to serve those who need help the most. 

Coburn is a member of the committee on Health, Education, Labor, and Pensions.