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Want to know what is on our minds? Find blog posts written here, by the City Club staff, members, and partners. Every week you can find a new edition of #FreeSpeech in the News — a collection of related stories, commentary, and opinions on free speech in the 21st century that’s making the news. You’ll also find takes on current events, past forums, and issues surrounding Northeast Ohio. Read on for all things City Club.

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Wednesday, March 15, 2017

Defending America’s Rube Goldberg Machine

Defending America’s Rube Goldberg Machine

There isn’t a single person who understands the healthcare system in the United States. Yes, there are many people, myself included, who claim to understand aspects of its constituent parts, but it is impossible to describe it simply and in its entirety. What we all understand as consumers, however, is that healthcare is incredibly expensive, complex, personal, and often frustrating. To be engaged in the healthcare system as a consumer means to confront the subtle, often particular issues that impact our health and that of our friends and family. What’s more, we confront these issues with a network of confusing, often uncoordinated medical directives and opaque billing processes governed by scientists responding to the demands of revenue cycles and cash flows. This complex machine we call the healthcare system is the endemic experience of the American healthcare consumer.

As a result of this fragmented, complex system of care, we have seen costs increase to the point that healthcare is nearly 20 percent of our gross domestic product. These costs, of course, are not just relegated to the private insurance many Americans are able to access through their employer. In fact, Ohio Medicaid is spending $48,000 a minute to address the healthcare needs of the one in four Ohioans who rely on the program for coverage. Because Medicaid is financed through taxpayer dollars, though, it immediately becomes political. As such, the nature of the policy debate in Medicaid is about how to be efficient with those dollars and achieve the greatest return on investment.

Often, it is convenient to look to the side of the cost equation that focuses on consumers, particularly those who do not pay, as the reason for increasing Medicaid costs – and that is not an entirely incorrect assessment. It is very true that one of the biggest cost-drivers in healthcare is enrollment. If the government did not cover people’s healthcare costs, it wouldn’t spend any money, simple as that. Still, to only focus on that part of the healthcare system ignores not only the benefits that such coverage can provide, but ignores the other, often more significant economic and social determinants that drive cost growth, generally.

Governor Kasich’s team has understood that costs for Medicaid are driven by a number of intricate, interwoven factors. These costs are not specific to any particular insurer or governmental program, mind you, but rather a symptom of a larger illness built on a reimbursement system that addresses disease more than wellness, rewards specialists more than generalists, and pays for diabetic amputations at an amount higher than a nutrition consultation. From a policy perspective, they understood that the nature of the system itself, one of fragmentation and volume-based payment, is the root cause of the increasingly high spending in Medicaid and beyond.

At the end of the day, everyone will engage the healthcare system as a consumer. Before expansion, U.S. taxpayers were already covering the cost of care for the uninsured. We did this through higher premiums, increased prices, and through payments made by government to cover uncompensated care for hospitals. After expansion, however, Ohio’s rate of uninsured dropped to an all-time low. Furthermore, debt for hospitals decreased and, in states that expanded Medicaid, insurance premium growth slowed. But spending is not the only measure of success. What about providing this coverage made the system more efficient?

Looking at Ohio’s statutorily required report on the Medicaid expansion, we see that individuals, 40 percent of whom are working, had better access, were more able to manage their health, used the emergency room less, and were more able to afford essentials like housing and food. If you combine this with the Governor’s efforts to implement value-based reform, which relies on a privatized system of managed care and performance, you have a winning formula for controlling costs. Why? Because a system like that, like Ohio’s, recognizes that every healthcare consumer has more in common than they do not. A system like that recognizes that what may be a barrier for some, like transportation or access to nutritious food, has more influence on their ability to be healthy and find a job than it may be for others. A system like that understands that Medicaid, historically proven to be an economic ladder for many, especially children, has a role to play in controlling costs and providing coverage.

Cost in healthcare may seem to be a simple enough problem to solve. That has often been the approach of policy in the past when costs were high – limit enrollment, cut benefits, and reduce rates. But the benefits of Medicaid expansion are hard to ignore. There are broad, impactful returns when coverage is provided, allowing people to maintain or seek employment, recover from addiction, and afford essentials like food. But coverage for coverage’s sake is too simple a solution as well. That is why coverage, combined with the often complex set of value-based public policies are going to be the only way to solve the problem of cost in healthcare. It’s not just a matter of personal responsibility - it’s also a matter of design. To ignore that fact is to ignore the common experience we all have had in being a healthcare consumer.

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