Tagged Medicaid

Age-Old Health Care Debate Shifts From Insuring More People To Cutting Costs

In a new article in the BMJ journal, Julie Rovner, chief Washington correspondent for Kaiser Health News, examines the debate over the future of the U.S. health insurance system — a debate that has waxed and waned for the better part of a century. While political parties once argued over whether the government should make sure all residents have coverage, the discussion is changing. As the cost of medical services continues to grow faster than most Americans’ incomes, even people with private insurance coverage — which comes with ever-increasing expenses in the form of deductibles and copayments — are finding the cost of care becoming unaffordable. That’s true for Medicare as well. Read the article here.

Related Topics

Cost and Quality Health Care Costs Insurance Medicaid Medicare The Health Law Uninsured

State Highlights: Florida Community Still Struggles With 5,000 Homeless One Year After Hurricane; Troubled VA Medical Center Once Again Infested With Flies

When It Comes To States’ Medicaid Programs, CMS May Be Saying ‘Think Outside The Box.’ But There Are Still Limits.

Different Takes: Dems Need To Shake Up Stale Debate On Health Care; Trump Works On His Twofer To Destroy Health Care and Immigration Systems

CMS Wants To Make It Easier For Consumers To Find Out If Nursing Homes Have Been Penalized For Abuse, Neglect

Viewpoints: Drug Industry Was Allowed To Hijack Policymaking That Led To Opioid Epidemic; Build On The ACA To Reach Dream Of Universal Health Care

Why Hospitals Are Getting Into The Housing Business

DENVER — One patient at Denver Health, the city’s largest safety net hospital, occupied a bed for more than four years — a hospital record of 1,558 days.

Another admitted for a hard-to-treat bacterial infection needed eight weeks of at-home IV antibiotics, but had no home.

A third, with dementia, came to the hospital after being released from the Denver County Jail. His family refused to take him back.

In the first half of this year alone, the hospital treated more than 100 long-term patients. All had a medical issue that led to their initial hospitalization. But none of the patients had a medical reason for remaining in the hospital for most of their stay.

Legally and morally, hospitals cannot discharge patients if they have no safe place to go. So patients who are homeless, frail or live alone, or have unstable housing, can occupy hospital beds for weeks or months — long after their acute medical problem is resolved. For hospitals, it means losing money because a patient lingering in a bed without medical problems doesn’t generate much, if any, income. Meanwhile, acutely ill patients may wait days in the ER to be moved to a floor because a hospital’s beds are full.

“Those people are, for lack of a better term, stranded in our hospital,” said Dr. Sarah Stella, a Denver Health physician.

To address the problem, hospitals from Baltimore to St. Louis to Sacramento, Calif., are exploring ways to help patients find a home. With recent federal policy changes that encourage hospitals to allocate charity dollars for housing, many hospitals realize it’s cheaper to provide a month of housing than to keep patients for a single night.

An architectural rendering of Denver Housing Authority’s renovation of the 10-story building once used as office space on Denver Health’s campus.(Courtesy of the Denver Housing Authority)

Hospital executives find the calculus works even if they have to build affordable housing units themselves. It’s why Denver Health is partnering with the Denver Housing Authority to repurpose a mothballed building on the hospital campus into affordable senior housing, including about 15 apartments designated to help homeless patients transition out of the hospital.

“This is an experiment of sorts,” said Peg Burnette, the hospital’s chief financial officer. “We might be able to help better their lives, as well as help the financials of the hospital and help free up capacity for the patients that need to come to see us for acute care.”

Spending To Save Money

Denver Health once used the shuttered 10-story building for office space but opted to sell it to the housing authority and grant a 99-year lease on the land for a minimal fee.

“It really lowers the construction costs for us,” said Ismael Guerrero, Denver Housing Authority’s executive director. “It was a great opportunity to build additional housing in a location that’s obviously close to the hospital, close to public transit, near the city center.”

Once the renovation is complete in late 2021, the housing group will hire a coordinator to assist tenants with housing-related issues, including helping those in the transitional units find permanent housing. The hospital will provide a case manager to help with their physical and behavioral health needs, preparing them for life on their own. Denver Health expects most patients will be able to move on from the transitional units within 90 days.

The hospital will pay for the housing portion itself. That will still be far cheaper than what the hospital currently spends.

It costs Denver Health $2,700 a night to keep someone in the hospital. Patients who are prime candidates for the transitional units stay on average 73 days, for a total cost to the hospital of nearly $200,000. The hospital estimates it would cost a fraction of that, about $10,000, to house a patient for a year instead.

“The hospital really is like the most expensive form of housing,” Stella said.

After its targeted late 2021 completion, the building will be used for affordable senior housing, including about 15 apartments designated to help homeless patients transition out of the hospital. (Courtesy of the Denver Housing Authority)

Growing Interest

A recent report from the Urban Institute found that while most hospital officials are well aware of how poor housing affects a patient’s recovery, they were stymied about how to address the issue.

“It’s on the radar of almost all hospitals,” said Kathryn Reynolds, who co-authored the report. “But it seemed like actually making investments in housing, providing some type of financing or an investment in land or something that has a good amount of value seems to be less widespread.”

The report found housing investment has been more likely among hospitals with their own health plans or other types of arrangements in which they were receiving a fixed amount of money to care for a group of patients. Getting patients into housing could lower their costs and increase their operating margins. Others, particularly religiously affiliated and children’s hospitals, sought housing solutions as part of their charitable mission.

Reynolds said the trend is due in part to the Affordable Care Act, which requires hospitals to perform a community needs assessment to help guide their charitable efforts. That prompted more hospitals to consider the social needs of their patients and pushed housing concerns up the list. Additionally, the Internal Revenue Service clarified in 2015 that hospitals could claim housing investments as charitable spending required under their tax-free status. And provisions included in the 2017 tax cut bill provided significant tax savings for investors in newly designated opportunity zones, increasing their interest in affordable housing projects.

Some hospitals, she said, may use their cash reserves to invest in housing projects that generate a lower return than other investment options because it furthers their mission, not just their profits.

In other cases, hospital systems play a facilitator role — using their access to cheap credit or serving as an anchor tenant in a larger development — to help get a project off the ground.

“Housing is not their business,” Guerrero said. “It’s not an easy space to get into if you don’t have the experience, if you don’t have a real estate development team in-house to understand how to put these deals together.”

Cutting Costs

In the southwestern corner of Colorado, Centura Health’s Mercy Regional Medical Center has partnered with Housing Solutions for the Southwest to prioritize housing vouchers for frequent users of the emergency room.

Under a program funded by the Catholic Health Initiatives, Mercy hired a social worker and a case manager to review records of frequent emergency room patients. They quickly realized how big an issue housing was for those patients. Many had diabetes and depended on insulin — which needs refrigeration. Kidney failure was one of the most costly diagnoses for the hospital.

Once patients received housing vouchers and found stable housing, though, costs began to drop.

“We now knew where they were. We knew that they had a safe place to live,” said Elsa Inman, program coordinator at Mercy Regional. “We knew they would be more effective in managing their chronic conditions.”

The patients with stable housing were more likely to make it to their primary care and specialist appointments, more likely to stay on top of medications and keep their chronic conditions in check.

The combination of intensive case management and patient engagement helped to halve ER visits for the first 146 patients in the program, saving nearly $495,000 in Medicaid spending in less than three years.

“Hospitals are businesses and nonprofits are businesses,” said Brigid Korce, program development director for Housing Solutions. “They are bottom-line, dollars-and-cents people.”

Inman acknowledged that the hospital might have missed out on some revenue by reducing ER use by these patients. Hospitals are still largely paid by the number of patients they treat and the number of services they provide.

But most of those patients were covered by Medicaid, so reimbursements were low anyway. And the move freed up more ER beds for patients with more critical needs.

“We want to be prepared for life-threatening conditions,” Inman said. “If you’ve got most of your beds taken up by someone who can be receiving patient care outside in the community, then that’s the right thing to do.”

That was less of an issue for the inpatients at Denver Health. Because hospitals are generally paid a fixed amount for a given diagnosis, the longer a patient stays in the hospital, the more money the hospital loses.

“They’ve basically exhausted their benefit under any plan because they don’t meet medical necessity anymore,” Burnette said. “If they had a home, they would go home. But they don’t, so they stay in the hospital.”

Related Topics

Health Care Costs Medicaid States

KHN’s ‘What The Health?’: Trump Turns To Medicare

Can’t see the audio player? Click here to listen on SoundCloud.

President Donald Trump tried to change the subject from his impeachment investigation by going to Florida to unveil changes to the Medicare program before an audience of seniors. The changes consist largely of enhanced benefits in private Medicare Advantage plans, which Republicans have long championed as replacements for government-run Medicare benefits.

Meanwhile, the Trump administration this week also issued guidance allowing states to add “wellness” programs to plans on the individual insurance market. The program, part of the original Affordable Care Act, was never implemented by the Obama administration. However, numerous studies have shown that wellness programs that raise or lower premiums based on participation or health goals neither save money nor improve health significantly.

This week’s panelists are Julie Rovner of Kaiser Health News, Alice Miranda Ollstein of Politico, Kimberly Leonard of the Washington Examiner and Rebecca Adams of CQ Roll Call.

Among the takeaways from this week’s podcast:

  • Trump’s speech Thursday comes amid the backdrop of his fierce opposition to the Affordable Care Act and is seen as an effort to highlight the administration’s goal to promote private Medicare health plans. But Democrats and other administration critics point out that these Medicare Advantage policies are more expensive than traditional Medicare and tighten restrictions on doctors and hospitals.
  • Trump’s speech also has the potential to remind voters that the administration has been fighting to overturn the ACA in court, which would upend many of its consumer protections, including the guarantee of coverage for people with preexisting medical problems.
  • The administration proposal on wellness programs has raised concerns among some consumer groups that the programs might make insurance more expensive for some people who cannot meet the health standards in those programs.
  • Federal officials are redistributing funding for the Title X program after Planned Parenthood and some state health departments pulled out. Those agencies objected to the administration’s rule that participating organizations could not refer women for abortions. But finding new groups to take the money may prove difficult since not many are able to handle the work or the large numbers of clients that Planned Parenthood once did.
  • With several state challenges to abortion rights working their way through the court system, it seems likely that the Supreme Court will adjudicate an abortion case during the 2020 presidential campaign season.
  • A federal court in California is weighing a suit by immigration advocates to overturn the Trump administration’s rule that would hamper legal immigrants’ efforts to gain citizenship if they have used government benefits like Medicaid or food stamps.

Also this week, Rovner interviews KHN’s Cara Anthony, who wrote the latest KHN-NPR “Bill of the Month” feature about a biopsy that was more expensive than expected. If you have an outrageous medical bill you would like to share with us, you can do that here.

Plus, for extra credit, the panelists recommend their favorite health policy stories of the week they think you should read too:

Julie Rovner: NPR’s “Workers Are Falling Ill, Even Dying, After Making Kitchen Countertops,” by Nell Greenfieldboyce

Alice Miranda Ollstein: AL.com and ProPublica’s “These Sheriffs Release Sick Inmates to Avoid Paying Their Hospital Bills,” by Connor Sheets

Kimberly Leonard: The Los Angeles Times’ “The FDA Tried to Ban Flavors Years Before the Vaping Outbreak. Top Obama Officials Rejected the Plan,” by Emily Baumgaertner

Rebecca Adams: The Washington Post’s “With the Affordable Care Act’s Future in Doubt, Evidence Grows That It Has Saved Lives,” by Amy Goldstein

To hear all our podcasts, click here.

And subscribe to What the Health? on iTunesStitcherGoogle PlaySpotify, or Pocket Casts.

Tenn. Block Grant Experiment Would Boost Federal Funding, State Medicaid Chief Says

Tennessee wants to be the first state to test a radical approach for federal financing of Medicaid, the federal-state health care program for low-income people.

The proposal, Tennessee Medicaid Director Gabe Roberts said, would increase the federal government’s contributions by millions of dollars and allow Tennessee to improve care for enrollees, perhaps offering additional services such as limited dental care for some people. But critics fear the plan will harm the poor.

Tennessee, controlled by a Republican governor and legislature, has not expanded its Medicaid program as allowed under the Affordable Care Act.

The federal government pays each state a percentage of the cost of caring for anyone eligible for Medicaid ― varying from 50% to 77%. And all who qualify get covered.

Tennessee has proposed altering its federal funding (66% of its total Medicaid budget) into an annual lump sum. (Drug expenses would be excluded from the new program.) The state said the change would give it more flexibility to run the program ― which serves 1.4 million people ― and would save money.

Conservatives have pursued Medicaid block grants for decades to give states more power over the program. But Democrats oppose such efforts, arguing block grants could result in less coverage and limit enrollment. They also stress that states, over time, could see significant drops in federal Medicaid funding because it would not be based specifically on the number of enrollees.

Tennessee’s plan, which was submitted last week to the Centers for Medicare & Medicaid Services, would not change benefits or eligibility levels.

KHN senior correspondent Phil Galewitz sat down with Roberts last week to talk about the issue. His answers have been edited for clarity and length.

Q: Why are you seeking to turn Medicaid into a block grant now, especially as your state has been experiencing a budget surplus?

This isn’t a traditional block grant. We are calling it a modified approach. Tennessee Gov. Bill Lee has been a fan of the block grant idea for a while but also cares deeply about making sure that any approach isn’t going to reduce enrollment or services or people that we serve.

A state law passed this year instructing our administration to file a block grant waiver that would have a floor for federal dollars coming. So if enrollment fell, the money wouldn’t decrease. But if enrollment increased, the amount of federal payments would be indexed to account for that.

Gabe Roberts, Tennessee Medicaid director(Courtesy of Tennessee Medicaid)

Q: Can you discuss the shared-savings element that Tennessee is proposing?

Any savings from this program would be split in half with the federal government.

We have routinely underspent what the federal government projects for our costs by billions of dollars. So what this proposal does is to ask CMS to reimagine the state-federal funding mechanism as a value-based one, so that states that operate well and serve their populations well ― but also contain costs ― are rewarded with additional federal dollars to invest in that population without the requirement to come up with a state match. Right now, we don’t keep any of the money we save.

Q: As one of the poorer states, are you willing to risk getting less money from the federal government for Medicaid?

We believe the way the waiver is designed mitigates any concerns around a traditional block grant program. We do not believe this will result in fewer federal dollars coming to the state. This is an opportunity to bring more federal dollars to spend to enhance services or perhaps to provide services to additional people we are not serving today.

Q: Some experts question the legality of the Trump administration approving a type of Medicaid block grant without congressional authority. Why do you believe this is legal?

There are a variety of ways we can reach a mutually agreeable solution with CMS on this that clearly comports to federal law.

Q: Why is turning Medicaid financing into a block grant a better idea for the poor than expanding Medicaid under the Affordable Care Act, which would provide coverage to nearly additional 300,000 residents? The federal government pays 90% of the cost of these new enrollees, bringing billions of additional federal funding into the state.

These are two different and not mutually exclusive goals. This is an approach that rewards Tennessee for a well-run program, providing high-quality care to members with high member satisfaction and underspending CMS projections. This allows us to get access to some of those federal savings. Medicaid expansion requires a significant amount of money that the state has to come up with on an ongoing basis. I don’t know that it’s fair to pit the two approaches against each other.

Medicaid Expansion Remains A Primary Sticking Point In North Carolina Budget Stalemate

North Carolina’s Republican-led state legislature plans to adjourn by Oct. 31, with or without an approved budget. Earlier in the summer, Gov. Roy Cooper vetoed a budget bill, in part because it did not include Medicaid expansion. In Florida, state Medicaid officials recommend cuts to its program for people with disabilities, though the caps were not as severe as some had initially feared. And in other state budget news, Michigan Gov. Gretchen Whitmer defends her line-item vetoes.

The Deep Divide: State Borders Create Medicaid Haves And Have-Nots

ST. LOUIS — Patricia Powers went a few years without health insurance and couldn’t afford regular doctor visits. So she had no idea cancerous tumors were silently growing in both of her breasts.

If Powers lived just across the Mississippi River in Illinois, she would have qualified for Medicaid, the federal-state health insurance program for low-income residents that 36 states and the District of Columbia decided to expand under the Affordable Care Act. But Missouri politicians chose not to expand it — a decision some groups are trying to reverse by getting signatures to put the option on the 2020 ballot.

Powers’ predicament reflects an odd twist in the way the health care law has played out: State borders have become arbitrary dividing lines between Medicaid’s haves and have-nots, with Americans in similar financial straits facing vastly different health care fortunes. This affects everything from whether diseases are caught early to whether people can stay well enough to work.

It wasn’t supposed to be this way. The ACA, passed in 2010, called for extending Medicaid to all Americans earning up to 138% of the federal poverty level, around $17,000 annually for an individual. But the U.S. Supreme Court in 2012 let states choose whether to expand Medicaid. Illinois did, bringing an additional 650,000-plus people onto its rolls. Missouri did not, and today about 200,000 of its residents are like Powers, stuck in this geographic gap.

Powers briefly thought about moving to another state, just to be able to get Medicaid. “You ask yourself: Where do you go? What do you do?” said Powers, who was in her early 60s when diagnosed. “Do I look at what’s happening in Illinois, right across the river?”

A recent University of Michigan study found Medicaid expansion substantially reduced mortality rates from 2014 to 2017. The researchers said Illinois averted 345 deaths annually while Missouri had 194 additional deaths each year. The same trends held for other side-by-side states such as Kentucky (did expand) and Tennessee (did not), New Mexico (did) and Texas (did not).

Dr. Karen Joynt Maddox, co-director of the Center for Health Economics and Policy at Washington University in St. Louis, said health care providers in her border city see how the coverage differences affect people. When treating Medicaid patients from Illinois, she said, doctors know procedures, equipment and medicines will likely be covered. With uninsured Missourians, they must consider whether patients can afford even follow-up medications after heart attacks.

Nonetheless, Medicaid expansion faces significant opposition in Missouri, a red state led by a Republican governor with GOP supermajorities in both legislative chambers.

Patrick Ishmael, director of government accountability for the Show-Me Institute, a Missouri free-market think tank, said offering Medicaid to people with incomes above the poverty level would drain resources from the state’s underserved poor and push up taxpayer costs. Though the federal government pays 90% of the cost of the expansion coverage, he said, Missourians contribute to that through their federal taxes. Medicaid already accounts for about a third of the state’s budget, which he said puts pressure on other priorities, like education.

“Missouri and other states need to think about whether they are a government that provides health care or a health care provider that sometimes governs,” he said.

A Missouri Story

Powers, a minister in the St. Louis suburb of Hazelwood, used to get health insurance through her husband’s job selling lumber and hardware. After he was disabled in 2009, their coverage continued on and off for a while, and her husband eventually received Medicare, the federal insurance program for seniors and people with disabilities. But Powers had no insurance starting in 2012 as the couple struggled on, at most, $1,500 a month.

Medicaid wasn’t an option for her. Missouri could have opened the program to more adults as early as 2010, in preparation for the health care law’s expanded coverage taking effect in 2014. Without the ACA’s expansion, adults who aren’t 65 or older or disabled don’t qualify, no matter how low their income. Missouri’s program generally covers only pregnant women and children from low-income families, parents with incomes about 22% of the federal poverty level and people who are poor and blind, disabled or 65 or older.

Powers and her husband earned too little for her to qualify for subsidies on the federal ACA marketplace, so she couldn’t afford to buy her own plan. And without insurance, Powers never saw doctors for routine health visits or screenings. She stopped taking her prescribed medications for high blood pressure and anxiety — until she could no longer do without her anti-anxiety medicine, Lexapro.

In early 2016, she discovered a place to get help when she gave her friend a ride to a St. Louis clinic for the uninsured called Casa de Salud, where health services cost less than $30.

Powers figured she’d ask about getting back onto Lexapro there. She got a thorough checkup. The doctor found a walnut-sized lump in her right breast, and a mammogram found a tumor the size of a grain of rice in her left. A clinic caseworker helped her sign up for a Medicaid program for breast cancer patients. She underwent surgery in April 2016, then had 35 radiation treatments and took follow-up medications.

She kept thinking she could have found the cancer earlier if only she had insurance. That would have meant less treatment and lower costs for taxpayers, who ended up footing the bill anyway. Research shows breast cancer in its earliest stage can cost half as much to treat as in later stages.

“Even if you didn’t care about the human cost, you should care about the economic cost,” said Jorge Riopedre, president and CEO of Casa de Salud. “Treating a disease at its first stage is always going to be much cheaper than treating it at its advanced stage.”

An Illinois Story

In neighboring Illinois, getting Medicaid through the expansion helped Matt Bednarowicz avoid debilitating medical debt after a motorcycle crash. He was able to go back to work after he was injured while delivering a package in mid-May 2018.

The wreck crushed his left foot, requiring doctors to insert pins in it. Without Medicaid, he would have faced thousands of dollars in medical bills.

“The debt would have been greater than I could comprehend overcoming,” said Bednarowicz, who is now 29.

His Medicaid kicked in “just in the nick of time” to cover the surgery, he said. It also allowed him to get psychiatric help for depression. More than a year later, he’s able to get around well — even jog — and works as a caretaker for an elderly man.

Having insurance helps people like Bednarowicz stay productive, said Riopedre.

“The person who gets sick can’t work, can’t support his or her family, can’t be a consumer and buy goods. If they’re not working, they can’t pay taxes,” Riopedre said. “It just is a tidal wave of downstream effects that if we can’t get it right, it’s going to have repercussions across the nation.”

Amid Controversy, Future Uncertain For Missouri

As the ballot measure push continues, Missouri Gov. Mike Parson, a Republican, recently created a task force to look into expanding Medicaid through a waiver allowing states to skip some federal requirements. His office referred questions to the state’s Department of Health and Senior Services, which in turn referred them to the Department of Social Services. Rebecca Woelfel, a spokeswoman for that agency, said the department doesn’t typically comment on potential ballot issues.

Ishmael, of the Show-Me Institute, said he hopes expansion doesn’t happen. He said the Medicaid system overall is wasteful, with outcomes often not fully justifying the expense. The cost of an expansion would depend on how it’s structured, he said, but “it could be a real budget-buster.”

The impact of an expansion on Missouri’s budget remains unclear. A February analysis by researchers at Washington University estimated it would be “approximately revenue-neutral.” But their estimates range widely for the first year depending on enrollment and other factors, from up to $95 million in savings for Missouri’s Medicaid program to costing $42 million more than not expanding.

Powers, whose husband died last year, said she fully supports Medicaid expansion.

But whatever happens, especially now that she’s suffering from heart failure, she’s grateful she won’t have to worry about being uninsured again. At 66, she’s now old enough for Medicare.