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Show A FRAYED PROMISE: THE GOVERNOR'S HEALTH CARE REFORM PACKAGE Norman J. Waitzman, PhD Governor Mike Leavitt's health care reform package contains several components, but a cornerstone of the package which draws the critical focus of this commentary is the proposed expansion of Medicaid eligibility to increase access for the uninsured. Such expansion is feasible without substantial new funding, according to the plan's description, because a greater percentage of Medicaid recipients will be placed in managed care arrangements and Medicaid clients will be required to foot part of their medical care costs, both of which are projected to produce substantial savings (Utah HealthPrint 1994). The major problem with this approach, however, is that Medicaid suffers from underfunding with current arrangements. Moreover, the evidence for savings and quality of care with Medicaid under managed care is decidedly mixed. In addition, any increase in financial responsibility among the Medicaid population poses the danger of producing substantial declines in health that could ultimately increase health care expenditures. Current Problems with Medicaid Certainly, Medicaid has improved access to medical care for people who have low incomes, but it has also suffered from chronic problems related to physician participation (Reisinger, Colby, and Schwartz 1994). There is a shortage of physicians willing to see Medicaid patients. In 1993, just 41% of licensed physicians in Utah saw a Medicaid client. Of these participating physicians, more than one third had total annual Medicaid billings of less than $1,000 (Utah Department of Health 1994), a paltry amount of the more than $300,000 average annual receipts of self-employed physicians. Nearly 60% of participating Utah physicians had Medicaid billings less than $5,000. A recent survey of Salt Lake County physicians revealed that while 95% of private practice physicians were willing to accept new patients, less than 18% indicated that they would accept new Medicaid patients (Williams 1994). The problem of physician participation is partly attributable to low reimbursement (Reisinger, Colby, and Schwartz 1994; Physician Payment Review Commission 1991). The fees which Medicaid reimbursed doctors averaged about 82% of Medicare prevailing charges in Utah in 1993 (down from 89% in 1988), but for certain types of visits, tests, and procedures, Medicaid reimbursement was significantly lower (Physician Payment Review Commission 1994; Physician Payment Review Commission, 1991). For example, Medicaid paid 72% of the Medicare rate for hysterectomy in 1993, 44% of private payers' average charge for a normal vaginal delivery in 1988 (Physician Payment Review Commission 1991) and about 40% of the average charge for a C-section (Rosenbaum, Hughes, Butler, and Howard 1988). Access to quality obstetric and pediatric care under Medicaid is of particular import because the Medicaid-eligible population is at heightened risk for having infants with low birthweight and other congenital problems that require extensive treatment in the perinatal period and which may be prevented with proper prenatal care. Yet, medical resources provided to sick newborns covered under Medicaid are significantly less than those devoted to care for privately insured newborns (Braveman, Egerter, Bennett, and Showstack 1991). The Frayed Promise of Managed Care The attraction of managed care is the promised provision of quality care at reduced cost. This expectation is anchored in the idea that coordination and continuity of care provided under the supervision of primary care physicians will reduce unnecessary and costly visits to the emergency room and specialists, while reducing the severity of illness through early intervention. However, the underside of capitated managed care is the incentive to do too little in order to save costs, particularly in the face of low capitated rates. While competition and quality assurance are touted as formidable constraints on such incentives, this tends not to be the case under Medicaid managed care. Literature reviews and overviews of Medicaid performance under managed care from the United States General Accounting Office (US General Accounting Office 1993), the Physician Payment Review Commission (Physician Payment Review Commission 1992), the Kaiser Commission on the Future of Medicaid (Simon, Chait, and Rosenbaum 1994) and several independent 120 HEALTHPRINT COMMENTARY |
