by Jordan Roberts
Director of Government Affairs, John Locke Foundation
Hubert Humphrey once said, “The ultimate moral test of any government is the way it treats three groups of its citizens. First, those in the dawn of life — our children. Second, those in the shadows of life — our needy, our sick, our handicapped. Third, those in the twilight of life — our elderly.”
The Medicaid program is for those in the shadows, the most unfortunate and needy of our citizens. As discussions of expanding our state’s Medicaid program continue — and hold up the new budget — it’s worth asking: Is our current Medicaid program adequately serving those in the shadows? A new study published in the Annals of Health Law and Life Sciences from Duke University scholars suggests it’s not. They find severe inefficiencies in the delivery of care for this population, who are the direct result of a lack of access, rather than a sicker population.
Using case studies and statistical analyses, the researchers wanted to answer three questions: How are North Carolina Medicaid dollars being spent? How does spending correlate with health outcomes and respond to health disparities in North Carolina? How should state dollars be allocated to meet the specific needs of Medicaid beneficiaries in the state? Given the size, growth rate, and transformation of the Medicaid program, these are essential questions to determine the extent to which we are caring for those in the shadows. Also, we should know the efficacy of a program before we increase the funding and scope of that program.
The study starts with some baseline hypotheses and assumptions about Medicaid and health care in general. First, counties with low measures of social indicators such as employment or education would generally have worse health. Second, greater prevalence of sickness in these counties from a lower baseline level of health would yield more health spending. Third, other conditions the same, more health spending translates into better health outcomes. Fourth, increases in health spending should be associated with a higher density of and availability of providers.
Using a county-level analysis of publicly obtained data, the researchers examined spending per beneficiary and health outcomes. Some of the assumptions were proven correct; others were not.
First, the study found hotspots in the most eastern and western parts of the state, where counties have consistently higher than average expenditures and don’t see much change in spending year-to-year. These tend to be rural counties with more socioeconomic barriers. Second, these counties with higher health spending have comparable levels of disease burden, such as infant mortality rate or diabetes, when compared to counties with lower expenditures. Third, counties with fewer doctors were concentrated in specific regions and correlated with higher health expenditures. Fourth, the study examined the number of nurses as a possible substitute for physicians and found there was very little increase in nurses in low-physician counties.
Now let’s put these findings in the context of the Medicaid program and the conversation of expanding Medicaid. One of the assumptions was that higher health-care spending would correlate with better health outcomes. The study finds that’s not true, as the counties identified in the study as hotspots were spending 1.5 times more per beneficiary without producing any improvements in health outcomes. Another assumption, which said that higher levels of disease would correlate with higher levels of spending, since sicker people would require more care, seems also to be false. The higher spending counties weren’t any more prone to diseases than those counties that weren’t considered a hotspot.
What explains these findings? The answer is access or lack thereof. If all of the hypotheses and assumptions had been true, the findings would have shown counties with higher expenditures have better health outcomes. Additionally, the findings would have shown the hotspot counties had a higher density of providers. Both of these proved not to be true. The reason for this, as explained by the paper is “a lack of access can cause individuals to spend less on cheaper preventative health services and spend more on expensive, reactive health services.” In other words, poor health outcomes and higher associated spending seem to be driven by the lack of physicians and low emphasis on preventative health care, not a higher risk of disease.
These findings support some of the arguments that I have made against expanding Medicaid. Without access to a health professional, an insurance card won’t help much as evidenced by the poorer health outcomes in counties with fewer physicians. This is a problem because, of North Carolina’s 100 counties, 82 are designated as not having enough primary care providers for the population or area. Additionally, the individuals currently on Medicaid aren’t experiencing any increases in health despite higher spending in these areas. As the researchers conclude in the study, “Importantly, these patterns are not attributable to an unusually high prevalence of disease, which suggests that the burden for change lies with the system, not the population.”
Some of these issues could be addressed with the initiatives included in North Carolina’s Medicaid transformation to managed care, which focus on social determinants of health. Policies such as certificate of need reform, scope of practice reform, and the use of telemedicine can also help alleviate health disparities. The paper also suggested utilizing community health workers and better coordination between county health departments and managed care companies.
Taxpayers should want government programs to function as effectively as possible. The findings in the study by the Duke researchers imply that our Medicaid program is plagued with serious issues that harm those who need help the most. This is a function of low supply of health professionals in marginalized areas of the state and inefficiencies in the delivery of care for the Medicaid program as a whole. Medicaid expansion is even harder to justify when we know the current Medicaid population is not properly served.
This article also appeared as the Daily Journal for July 23, 2019.