Is Medicaid “Broken”?

A 15% increase in anything is pretty substantial and that’s how much Medicaid enrollment has increased since it was expanded under the auspices of the Affordable Care Act. Philip Klein offers several arguments that the system is broken:

  • Its size. Just about 20% of Americans are presently enrolled in Medicaid.
  • Its cost. When you combine the state and federal contributions it amount to about $460 billion per year. That’s before the increase in enrollment.
  • The drop in physicians who are willing to accept new Medicaid patients.
  • Its limited effectiveness.

I don’t see that these factors either separately or together point to a “broken” system. Rather I think they point to a system that is being put to a purpose for which it was not designed. It was intended as a relatively small program to subsidize the healthcare of people who were genuinely poor at a time when healthcare consisted largely of a few immunizations and acute care. It has expanded far beyond that, to people who by no reasonable definition genuinely poor and most of its spending today is for chronic care.

However, I won’t hesitate to say that Medicaid is broken in Illinois. It takes a full nine months after the date of service for a physician to get paid in Illinois. Illinois under Rod Blagojevich elected to expand its Medicaid rolls and benefits rather than pay into its public employee pension funds. Now we have Medicaid bills larger than the state can afford and a public employee pension system that can’t make good on its promises to boot. I can’t imagine what the state will do when the federal government reduces its share of the bill as it’s scheduled to do in 2016.

6 comments… add one
  • Ben Wolf Link

    Perhaps it is more accurate to say that the current state of Medicaid indicates a broken health system, given that even the well-to-do could not under many circumstances finance their own care. When treatment for a heart attack can routinely exceed $500,000 you’ve got to have insurance from somebody.

  • I agree completely.

    Where I think I disagree with most is that I’ve come to the conclusion that we cannot progress incrementally to a better healthcare system. Every increment will be met by countermeasures.

  • Ben Johannson Link

    That’s a chilling thought, but I think you’re right. Evolutionary change has become impossible and the consequences of that are potentially catastrophic. If there can’t be evolution there will be revolution.

  • steve Link

    I will, of course, sort of disagree. I would point out that we never made any kind of attempt to control costs in any kind of systematic manner in the past. This is the first time in my over 40 years in the medical field that I see people taking cost cutting seriously. There is a lot of low hanging fruit.

    Steve

  • Andy Link

    I agree about that progress doesn’t come from incremental change. I see it everyday in the federal civil service.

  • There is some evidence that even evolution does not proceed by slow, incremental change. See “punctuated equilibrium”.

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