Doctors who rely on Medicaid patients will have to make some tough decisions if the state budget — and our attitude toward health care — don’t improve
By almost all measures, the Medicaid and Medicare situation in Nevada looks grim for doctors and hospitals. Ballooning numbers of unemployed, uninsured and elderly residents mean higher numbers of people who need public health care coverage. At the same time, a withering state economy and budget mean fewer government funds to support these programs. It all converges like a laser beam — aimed right at revenue for health care providers. “We’re at a really critical juncture,” says Larry Matheis, executive director of the Nevada State Medical Association. “Whether or not the federal reform (President Obama’s Affordable Care Act, or ACA) will make things better … is hard to say.” If things don’t get better, Matheis and others believe, physicians may start leaving the state, and practices may close their doors. Is it just posturing in preparation for the upcoming legislative session? Or could Nevada really set off a medical brain drain if it doesn’t fix its problems with public health care? A complicated diagnosis It probably won’t surprise anyone to learn that a government-run program is about as easy to get your arms around as a 15-headed staff of Asclepius. Putting it simply, Medicare is funded fully by the federal government and is mainly meant to provide care for the elderly; Medicaid is funded partially by the federal government and partially by each state (and sometimes, as in Nevada, constituent counties) and is meant to provide care for people living in poverty, especially children, pregnant women, parents of eligible children and people with disabilities. People have to qualify for Medicaid, and there is some overlap between the two programs. Nevada can’t control what happens with Medicare, other than through its U.S. senators and representatives, who may get involved with relevant legislation. That’s not to say Medicare doesn’t pose problems for Nevada; it does — largely due to a number of factors: a rate schedule in dire need of an update; the colossal number of Baby Boomers who will soon be eligible for their hard-earned free ride; and a flawed piece of the 1997 law meant to reform Medicare that has actually ended up slowly sapping its funding. On the other hand, following federal rules, each state administers its own Medicaid and related programs, such as the Children’s Health Insurance Program, or CHIP (called Nevada Check Up here). So, Carson City does decide what happens with these programs; hence, the recent fracas over whether Nevada Gov. Brian Sandoval will expand the state’s Medicaid in line with ACA guidelines, which would make more people eligible for the program. |
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In today’s Nevada, lots of folks already fit the “low income and limited resources” description of qualified recipients. Nevada’s population is not doing well, in terms tracked by health care organizations such as Kaiser Permanente, producer of the industry standard in reports on government data, statehealthfacts.org.
We have a high number of people living in poverty (20 percent of the total population), and higher-than-average numbers who are unemployed (11.6 percent as of May 2012, compared with 8.2 percent nationally) and uninsured (21 percent, compared with 16 percent nationally). Yet, in 2009, we spent the fifth-lowest amount of money per capita in the U.S. ($5,735) on health care for our residents.
How is Medicaid funded? The state and federal government don’t each necessarily contribute 50-50. Instead, the federal government calculates how much to give each state using a formula based on individuals’ average incomes, with the basic idea being that the federal government foots more of the bill in poorer states. The feds can’t provide less than 50, or more than 83, percent for any state. In Nevada, it’s 56 percent.
Here’s the kicker: Because it’s a matching-fund program, the more money a state puts in, the more it gets from D.C. A state where the federal government covers 50 percent will get dollar-for-dollar matching, while a state where the federal government covers 75 percent will get three dollars for every dollar.
The problem, according to providers, is that Nevada doesn’t put enough in, leaving matching dollars on the table. According to Kaiser Permanente, in 2010 Nevada had the 11th-lowest total Medicaid spend, at $1.5 billion including state and federal expenditures — lower than every other Southwest state. Utah, whose population is 2.8 million (compared with Nevada’s 2.7 million) spent $1.7 billion on Medicaid. New Mexico, with 2.1 million residents, spent $3.4 billion.
What’s worse, during the state budget crisis that came to a head during the 2011 legislative session, Nevada cut its Medicaid funding for 2012-’13. Some things (e.g., non-medical vision services for people over 21) are not covered at all; others (non-primary care physician visits) are covered at lower rates than they used to be.
“It really comes down to — there’s only so much to go around. This was not someplace where we wanted to make cuts. Unfortunately, we had to,” says Nevada Assemblywoman April Mastroluca, who chairs the state’s Health and Human Services Committee.
Public health care is a whopping piece of low-hanging fruit for a cash-strapped state, with health and human services taking $2.7 billion (30 percent) of the 2012 budget.
The upshot for the population is: Nevada has many people in need of free or reduced-cost coverage and less coverage for them.
The business of medicine
The situation affects some health care providers more than others. General hospitals treat disproportionately high numbers of people on public assistance, and their emergency rooms are often both the first place that newly unemployed/uninsured people think of going when they’re sick, and the last resort for the chronically ill who have been turned away everywhere else.
“These are patients who may not even have Medicaid,” Matheis says. “They access health care through emergency care.” Some may find their way to qualified medical clinics and get enrolled in public programs, but Nevada’s high uninsured rate suggests many don’t. Matheis believes it has to do with access, made more difficult here by the state’s tendency to apply stringent eligibility standards.
Although participation in Medicaid is voluntary, every state does it. Participating entails compliance with regulations — including some having to do with qualified residents’ ability to access their state’s program. If Nevada continues to fund Medicaid so low and set eligibility standards so high, Matheis argues, access may reach critically low levels. Groups such as his could sue the state government.
“The way we’ll once again get the attention of lawmakers is when our emergency departments can’t meet demand,” he says, recalling a two-year period in the last decade when ERs were turning people away for lack of beds.
Hospitals aren’t the only providers affected by weak public health care coverage. Pediatric specialists, who treat children with serious illnesses, are likely to have a greater percentage of patients on Medicaid than, say, plastic surgeons, who treat adults with a desire to alter their appearance.
Howard Baron, a pediatric gastroenterologist in Las Vegas, estimates 40 percent of his patients are on Medicaid. Local pediatric oncologist Ronald Kline ballparks his percentage at around half.
The trouble with Medicaid and Medicare, from a provider’s perspective, is that they pay lower rates for services than going averages — much lower, in some cases. Baron, who is also president of the Clark County Medical Society, estimates his Medicaid reimbursements are about 30 percent of what a typical third-party insurer pays.
In other words, physicians like Baron and Kline get reimbursed at lower-than-average rates for a bulk of their services.
Kline says he’s a simple guy who looks at things simply: “At the end of the day, you have to pay your bills and have enough left over to support your family. However you have to get to that point, you do it, and if you don’t, you shut your doors and move to another state.”
Has Kline considered this? Yes, he admits. Although it would be difficult for him, having a family and being established in Las Vegas, he says he’s hearing more and more buzz among his colleagues about seeking greener pastures.
In the meantime, they compensate by making administrative changes, such as freezing hiring and transitioning to less-qualified, lower-paid staff. This has a ripple effect on the local economy, they note.
And the impact is more than just fiscal. Baron and Kline say they didn’t get into medicine for the money; they did so to help people — kids with cancer and digestive disorders. They recognize that by treating Medicaid recipients, they serve a population most in need of their skills.
“It’s depressing to have to consider reducing your visibility to people who have coverage that doesn’t pay you a living wage. It’s frustrating,” Baron says. “I see it happening around me. Let’s say I have a child who can’t swallow and needs a feeding tube. It takes six to nine months to see a therapist. What are his chances of getting it and successfully feeding by himself? Very slim.”
Doctors could simply refuse to treat patients on Medicare and Medicaid, or adjust the percentage of those patients they accept, but none of those interviewed for this story said they wanted to do that. They’d prefer, they said, to see the system fixed.
A case of hypochondria
“Where would they go?” asks Christopher R. Cochran, chair of UNLV’s Department of Health Care Administration and Policy, reacting to the notion doctors would leave the state if Medicaid weren’t fixed. “It’s no better anywhere else.”
Yes, it is bad here, he says, but most states are in the same boat. And as far as individual rates are concerned, Nevada does reimburse at higher average rates than other states.
Cochran wonders if physician groups are making a political play like the one they pulled in 2004 over TORT reform. Back then too, he says, the mantra was, “Keep our doctors in Nevada.” The implied threat was that if reform didn’t happen they would leave. TORT reform passed.
Then, there’s the question that crosses almost every non-doctor’s mind when he hears a doctor complain about money: “You’re griping about six figures when I’m having trouble making my three-figure rent this month?”
It has crossed a couple doctors’ minds, too. One, who declined to be quoted for this story due to the controversial nature of his statement, put it in stereotypical terms: Do these physicians need more money to help their patients, or to afford their Mercedes leases?
Assemblywoman Mastroluca bristles at this suggestion. “Who am I to say how much someone should make for a certain occupation?” she says.
In any case, it is evident Nevada needs more — not fewer — doctors. As of 2010, the state had 221 physicians per 100,000 population, according to the University of Nevada School of Medicine’s forthcoming Health Professions Report. Although that’s a 50-percent increase from 1980, it still lags the national average of 312 per 100,000 people. In fact, Nevada is No. 47 out of 50 in number of doctors per capita in the U.S., the report shows.
“Any way you look at it, our numbers are below regional and U.S. averages,” says John Packham, co-author of the report and director of health policy research at the school of medicine. “The number (of physicians) has grown over the decades, but given population growth, we’re just treading water the last couple decades.”
Robert Lang, an urban planning and policy expert with Brookings Mountain West, has argued publicly that the real issue is jobs: problems with Medicaid and other aspects of the state’s health care not only hamper growth in that sector of the economy, but they also deter outside investment in other sectors.
Exit interview
Terrible Medicaid and Medicare alone wouldn’t drive people away if the stellar economy and work environment made up for it, but that doesn’t seem to be the case.
Experts point to several factors when discussing the difficulty Nevada has recruiting new doctors. Our educational system, which health care providers rely on to supply them with bright, well-trained staff, is also underfunded. Our higher ed system lacks a reputable medical school that’s affiliated with a reputable teaching hospital. And some Las Vegas physicians complain that the city’s hospitals being controlled by three corporations who compete among themselves is deleterious to collaboration and specialization, which doctors require in order to excel.
There may be hope yet. Mastroluca points out glimmers of an economic turnaround that would allow the state to put back into Medicaid some of what it’s taken away.
The state and local medical associations have other specific suggestions for improvements. Baron believes patients on public health care programs would be more invested in the system and their own health if they shared part of the burden through a small co-pay. Other states do this, and it is allowed by federal regulations.
Matheis says the “difficult and challenging” effort to bring together the school of medicine and University Medical Center is worth exploring, because it would use scant resources to address several problems at once: keeping a hospital afloat, training new doctors and treating indigent patients. State and industry leaders must start thinking creatively like this, he says.
In planning and budgeting for programs geared toward jobs and economic growth, he adds, Nevada’s leaders should remember that everything earned from and spent on medicine stays in the local economy.
“The Medicaid problem is a money problem,” Kline says. “To fix it, the state has to put more money into the system. That’s a controversial statement, because you either have to take money away from someone else or pay taxes.”
Matheis adds, “We can make the case for what we need, and how we better structure things, but it’s really going to be a decision for Nevadans … You have to spend money, or decide you’re not going to provide that service.”
