Options to save Medicaid

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It’s possible to save the program without killing the patient

Everybody wants to save Medicaid.
It’s the goal of Human Services Secretary Sidonie Squier and advocacy groups like Health Action New Mexico.
But how they go about it sounds like a TV doctor show, with surgeons squabbling over a patient lying open on the table.
A new study suggests savings in the program that covers the poor and disabled, without cutting.
First, the numbers: One in four New Mexicans relies on Medicaid.
In 2014, thanks to the president’s Affordable Care Act, the state could see 130,000 to 175,000 new enrollees, which will cost $330 million to $660 million more.
However, the federal government will pay all of that cost for the first three years and 90 percent after that.
Squiers leans toward copays for some expensive services and rewards for patients who take responsibility for their health, such as not smoking, rather than cutting enrollment or reimbursement rates.
But studies show that if you increase costs to people with little money, they go without health care and get sicker. And cost more later on.
Squiers would also use pay-for-performance targets that encourage better health care outcomes – quality – instead of paying for services in quantity.
Here she sounds a theme similar to the latest study.
Community Catalyst, a Boston-based nonprofit group that supports change in the health system, identified four policies to address waste and improve patient care.
One is to expand the use of nurse practitioners in primary care. Nurse practitioners have advanced training and earn about half the salary of a doctor. In this measure, New Mexico has done well. In three other areas, New Mexico needs work.
The first is not reimbursing hospitals for preventable complications caused by serious medical errors or institutional conditions, such as infections.
Medicare has stopped paying providers for the added costs of 14 such events, but Medicaid rules allow states to go even farther, and 17 states have added more events to the nonpayment list.
Maryland saved $62.5 million in its second year of the initiative. Community Catalyst predicts New Mexico could save $8.8 million a year.
Here’s a true story: An otherwise healthy man got a knee replacement but contracted an infection in the hospital. The doctor under-treated the infection, and the man died. Lawyers, start your engines.
A second potential for savings is reducing the number of people who bounce back into hospitals because they didn’t get adequate instruction on discharge and there was no coordination of outpatient follow-up.
The Affordable Care Act calls for Medicare to stop paying for certain readmissions, and states could apply the same rule to Medicaid.
The threatened loss could prompt hospitals to do a better job of instructing patients how to take care of themselves after discharge and seeing to follow-up care.
The study predicts savings of $11.1 million a year for New Mexico.
Here’s another horror story. A young man has a minor procedure but receives no instructions for care. He takes an Advil for pain, unaware of its effects as a blood thinner, and then returns bleeding like a sieve.
The third area is setting fair prices for prescription drugs. States reimburse pharmacies in different ways, but Community Catalyst suggests using Average Acquisition Cost, which is based on invoices drug manufacturers and wholesalers send to pharmacies. Alabama plans to use this benchmark and anticipates savings of $30.5 million.
Obviously, these policies would be unwelcome at some hospitals, but the best hospitals are already doing these things. And these measures won’t save the day, but they suggest that more is possible.
At the Domenici Public Policy Conference, we learned that 20 percent of patients account for 80 percent of costs and that there’s a great deal of duplication between Medicare and Medicaid.
Before we sock people who can least afford to pay, we should exhaust every possibility.

Sherry Robinson
© New Mexico
News Services 2011