The Medicaid Ripoff

I just read an article in American Medical News about how CMS is seeking to cut Medicaid payments for graduate medical education funding. The quote from HHS is that “Education is not part of the cost of treating a patient” therefore the government will no longer pay for it.

How does the government expect us to supply our nation with good physicians by cutting back on the funding to train those physicians? The National Center for Policy Analysis stated that as of 2004, the federal government spends $176 billion each year just for care of Medicaid patients. States throw in an extra $112 billion per year. That’s almost half a trillion dollars we spend in this country each year just to care for Medicaid patients! Expenses need to be cut, but where is all the money going?

I did a little search on the internet and found some additional information using just one example: New York. New York received 13 percent of federal Medicaid dollars in 2004. Thirteen percent of $176 billion totals $22.9 billion for Medicaid care. Yet in 2004, New York paid physicians $30 for a Medicaid office visit and $17 for a Medicaid ED visit, regardless of complexity. Treating patients in the ED? Booger nose or brain bleed, you’re getting $17 for your efforts. That isn’t even enough to recoup the cost of malpractice insurance. Apparently hospitals fare a little better with reimbursements.

The amount of taxes New York collected in 1999-2000 totaled $38.3 billion. In 2005-06, the amount of taxes New York collected increased to $51.6 billion. That’s a 35% increase in money collected. If we assume that one third of the tax money New York collects goes to fund Medicaid, that is $16 billion New York collects from its own taxpayers. Add another $22.9 billion from US taxpayers and New York received just shy of $40 billion to fund Medicaid in 2004. At $17 per ED visit and $30 per office visit, New York doesn’t appear to be spending a heckuva lot on Medicaid. So Mr. Spitzer, where is all the money going?

According to a study entitled “Equal Pay for Equal Work? Not for Medicaid Doctors” by Public Citizen,

“As long as Medicaid fee schedules short-change providers, the program and its clientele will be considered less worthy and access to care will be restricted for the poorest, neediest Americans. Fee differences between Medicare and Medicaid consign Medicaid to second-class status, and its beneficiaries to lower-tier care. Beyond the issue of disparate payments is the fact that many states pay too little; as a result, they have difficulty getting doctors to take Medicaid patients. This results in limited access to mainstream medical care for many.”

If it wants to save money, perhaps CMS should be auditing states to make sure that there is cost effective care. Cut back on waste, don’t cut back on funding.
Baby Boomers will start hitting age 65 in a few years. The year 2010 heralds the beginning of 18 years of an increased number of older and sicker patients from the baby boom. Is reducing the funding available to train new physicians really a smart thing right now?