Cuts to Medicare and Medicaid will cause overall health-care costs to rise

 Cuts to Medicare and Medicaid will cause overall health-care costs to rise
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President Trump’s proposal to cut $1.4 trillion from Medicaid over 10 years not only is unethical in its heartless attack on the nation’s poorest and most vulnerable — it’s also bad policy that will cost taxpayers far more than it saves in the long run.

The proposal, unveiled in Trump’s 2020 budget, was a shocker that nonetheless surprised no one. As Rep. Anna EshooAnna Georges EshooWhy drug costs for older Americans should be capped in pandemic's wake Senate panel advances bill targeting online child sexual abuse Short-term health plans leave consumers on the hook for massive medical costs, investigation finds MORE (D-Calif.) put it during a congressional hearing on March 12, this administration “has taken a hatchet to every part of our health care system.”


From Trump’s relentless — and failed — attempts to destroy the Affordable Care Act to his nonsensical cuts to the National Institute of Health’s budget, he has demonstrated a level of disregard for average Americans that’s surpassed only by his apparent ignorance of how our health care system really works.

The proposed Medicaid cuts — paired with the  additional billions Trump would slash from Medicare — are the perfect example of the president’s backward thinking on health care. Cuts to Medicare and Medicaid are woefully short-sighted for a very simple reason. Slashing spending on medical care, especially preventive care, has the unintended consequence of actually increasing health-care costs in the long term.

According to the CDC, chronic diseases that are avoidable through preventive care services account for 75 percent of the nation’s health-care spending and lower economic output in the U.S. by $260 billion dollars a year. Investing in treating chronic and other diseases with preventive care — examples include wellness visits, screening tests such as mammograms, and interventions such as immunization and well-child visits — pay dividends by keeping people out of the emergency room and hospital, where their care is most expensive.

When preventive services are reduced, the total cost of care actually goes up. Chronic conditions such as diabetes and heart disease go unmanaged, resulting in suffering, illness, and premature death, and preventable ER visits and hospitalizations increase.  

Unbeknownst to Trump and most Republicans, Medicaid has actually proven to be a potent weapon against long-term government costs. As the Kaiser Family Foundation recently found in a comprehensive review of the literature, “Medicaid eligibility during childhood is associated with reduced teen mortality, improved long-run educational attainment, reduced disability, and lower rates of hospitalization and emergency department visits in later life.” Benefits also include second-order fiscal effects such as increased tax collections due to higher earnings in adulthood.

The counterintuitive idea of spending today to save tomorrow is likely behind Trump’s ideas about on health care. If he wants to find innovative ways to reduce the nation’s spending on health care, he would do well to look at programs established by the Affordable Care Act to do just that. Thousands of these public-private partnership programs are in place today across the country, demonstrating that greater investments in preventive care to keep people healthy and alive longer than our current approach.

Unfortunately, Trump’s budget proposal has nothing to do with helping Americans live longer and healthier lives. If enacted, his budget would instead reduce the programs that help keep our elderly and poor healthy, by enforcing facile and nearsighted “fiscal responsibility.” As a result, many more of them may die sooner than they ought to, and without accruing the benefits of a program that contributes untold billions to the nation’s long-term good.

Jacob Reider, MD, served under the Obama administration as deputy director of the Office of the National Coordinator for Health Information Technology (ONC). He is currently CEO of Alliance for Better Health, a company focused on keeping Medicaid beneficiaries healthy.