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LESSONS IN FILTHY LUCRE
Mary G. Barry, MD
Louisville Medicine Editor
[email protected]
I
t always comes down to that. Even with
such stellar establishments as the Hilde-
gard House in Butchertown, which is to-
tally free to the patients, someone has footed
the bill through donations. Karen Cassidy
was inspired and carried her dream through
to renovate and run the former convent of
St. Joseph’s so that – without billing any of
its homeless, rootless Hospice patients, and
without billing any insurer or government
entity – they would have a real home for
living out their last days. The patients are
referred only through Hosparus and cared
for by volunteers. I cannot imagine a more
admirable example of individual and com-
munity compassion. of the 1935 Social Security Act (its stimulus
being the Great Depression). The feds con-
tributed a set amount each month, between
one-third and one-half of the cash benefit
for each person, “with the funds intended to
cover all domestic needs, including medical
ones.” The reimbursement per state varied
with that state’s income. Typical caps of the
early ‘60s were noted as $65 per old or dis-
abled person and $30 per household mem-
ber of single-parent family ($533 and $246
respectively in 2014 dollars). The states also
had direct payments to medical providers,
called Medical Vendor Payments or MVPs,
and had to cover the costs remaining after
the federally capped amount had been used.
And then there are the proposed chang-
es to the Affordable Care Act; they so far
have not exactly smacked of compassion.
An analysis in the NEJM of March 16 th from
Andrew J. Goodman-Bacon PhD and Sayeh
S. Nikpay PhD/MPH provided a thorough
historical analysis of Rep. Paul Ryan’s ini-
tial “A Better Way” plan. In essence, his
proposed per-capita cap of federal monies
transfers the financing to the states with
the stated aim “to provide states with an
incentive to reduce Medicaid costs.” Consequently, as Rep. Ryan now hopes
will occur with his plan, the states tightly
controlled all spending. Hardly anything
was covered. Prior to 1965, 11 states provid-
ed zero medical funds for children. Doctor
visits, pharmacy use and hospital use were
severely restricted. In Kentucky, welfare re-
cipients could receive care under an MVP
only for “a hospital visit for life-endangering
conditions,” and in Montana, only if they
were threatened by loss of vision. Spend-
ing was very low since less than 2 percent
of the population got MVP type benefits.
Ninety-eight percent of the population did
not participate; they did without.
The authors note that prior to 1965 (when
Medicaid was created) the federal govern-
ment had used a strikingly Ryan-like reim-
bursement method to the states. They note
that the initial welfare programs grew out
After Medicaid, with the cap on federal
cost sharing removed, by 1980 spending had
grown tenfold, but “this spending increase
was because of growth in plan participation,
not increase in per-enrollee cost.” The au-
thors note that in 1980 the per capita /per
enrollee cost was $5,769, and in 2011 was
$5,797. (In Kentucky, the 2011 cost provided
by the Kaiser Foundation included both
state and federal monies, and for the aged
ill was $9,000 and for the adult was $5,000.)
Elimination of the federal cap spurred the
closure of thousands of state-funded mental
institutions but aided the rapid growth of
Medicaid-bed nursing homes. Under the
proposed “Better Plan,” the growth in the
federal cap will be limited over time, so
that costs will outpace the cap amount, and
states will be forced to contribute more,
or cover less. The authors conclude that if
we look at states’ prior behavior, setting a
new federal cap “would simply shrink the
programs.” How they would shrink would
be up to the states.
Making that sort of decision would be
easier for everybody if we actually knew
what things cost. Because of the maze of
discounts and rates that vary by employer
and provider and insurer, no one seems
to be able, or willing, to say. My patients
who know that their gallbladders need to
disappear, sooner or later, have tried to shop
for the lowest out of pocket cost operation,
at whatever system their insurance plans
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MARCH 2017
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