More coverage doesn't necessarily translate into better patient care
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Everyone believes that the purpose of a healthcare system is to get the right care on time to the most people, and everyone is right. Where common wisdom goes astray is the presumption that coverage equals care. Most people think that having health insurance guarantees getting healthcare, i.e., (1) those who have coverage will get care, and (2) those who don’t have coverage won’t get care. Both are wrong.

Ever since EMTALA (Emergency Medical Transport and Labor Act) was passed in 1986, U.S. hospitals have cared for millions of sick Americans who have no insurance. Care is provided to those with no coverage at all.

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Between Medicaid, Medicare, and other public programs, the federal government is by far the largest single U.S. insurer, covering 120 million Americans. The federal government has given them the expectation of care when and where they need it. But coverage does not lead to that happy result. In fact, as coverage has increased, care has gone down — the seesaw effect.

 

In early 2017, Merritt Hawkins research group released a report that showed the effect of expanded Medicaid coverage under the Affordable Care Act (ACA): the wait time to see a family physician increased to 122 days! You have to wait four months before you can find out if your belly pain is gas, an ulcer, or cancer.

The state of New Mexico expanded its Medicaid program under ACA guidelines. Now, 41 percent of the entire state population is covered by Medicaid. To pay for that coverage, reimbursements to physicians, already low to start with, were cut even further. The Merritt Hawkins survey showed the effect of increased Medicaid coverage: the number physicians nationally who now accept new Medicaid patients has dropped from 69 percent to 53-60 percent. As coverage has increased, access to care has decreased.

The cost associated with the ACA’s expansion of the federal healthcare bureaucracy is $2.6 trillion. To defray a U.S. outlay for healthcare bureaucracy equal to the GDP of France, reimbursements to Medicare physicians were cut by $716 billion. Again, more people are covered and there are fewer providers to care for them.

A final proof of the seesaw effect comes from our homegrown single payer system, the Veterans Administration Healthcare system. A 2015 internal audit reported that, “307,000 American veterans [all eligible for coverage] may have died waiting for medical care.” Covering all veterans dramatically reduced the availability of care. 

Insurance coverage is a list of health benefits that a contracted insurer will pay for under conditions the insurer specifies. It is supposedly a prepayment plan for medical care: your care is decided by the payer, not by you or your doctor.

Federal and state governments, as well as insurance companies, decide the list of health benefits based on budgetary considerations, not on the needs of covered patients or even what works medically. The seesaw works here too: the more expensive a treatment is, the less likely it will be approved.

To mandate benefits and then implement the administrative and regulatory apparatus that control and oversee these benefits is hugely expensive. The $2.6 trillion price tag for the ACA proves that.

As we spend more money providing more insurance benefits to more people, we have less money to pay their care providers. As coverage goes up, by seesaw effect, care goes down. Might the opposite be true?

What if availability of care increased as the money spent on coverage went down? Is this possible? Might a drastic reduction in central (federal) control produce an increase in access to care? “Less coverage = more care” might seem counterintuitive, but when one side of the seesaw goes down, the other side must go up. That’s how a seesaw works, whether it is people going up and down, or coverage and cost.

To prove the seesaw effect — a decrease in coverage produces an increase in care — we should do as Justice Louis Brandeis suggested in 1932. He wrote, “a single courageous State may, if its citizens choose, serve as a laboratory.” Let Texas, for instance, create a system that is free market-based rather than centrally regulated, with no federally mandated coverage, and see what happens. That will turn seesaw theory into seesaw fact — a truth we can’t and shouldn’t ignore.

 

Deane Waldman (@SystemMD), MD MBA, is Emeritus Professor of Pediatrics, Pathology and Decision Science at the University of New Mexico, and director of the Center for Health Care Policy at the Texas Public Policy Foundation. He is the author of The Cancer in the American Healthcare System.


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