2/6/2020 Scott Gottlieb: Medicaid Is Worse Than No Coverage at All - WSJ

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Medicaid Is Worse Than No

Coverage at All
New research shows that patients on this government plan fare poorly. So why does the president want
to shove one in four Americans into it?

By Scott Gottlieb
Updated March 10, 2011 12 01 am ET

Across the country, cash-strapped states are leveling blanket cuts on Medicaid providers that
are turning the health program into an increasingly hollow benefit. Governors that made
politically expedient promises to expand coverage during flush times are being forced to renege
given their imperiled budgets. In some states, they've cut the reimbursement to providers so
low that beneficiaries can't find doctors willing to accept Medicaid.

Washington contributes to this mess by leaving states no option other than across-the-board
cuts. Patients would be better off if states were able to tailor the benefits that Medicaid covers
—targeting resources to sicker people and giving healthy adults cheaper, basic coverage. But
federal rules say that everyone has to get the same package of benefits, regardless of health
status, needs or personal desires.

These rules reflect the ambition of liberal lawmakers who cling to the dogma that Medicaid
should be a "comprehensive" benefit. In their view, any tailoring is an affront to egalitarianism.
Because states are forced to offer everyone everything, the actual payment rates are driven so
low that beneficiaries often end up with nothing in practice.

Dozens of recent medical studies show that Medicaid patients suffer for it. In some cases,
they'd do just as well without health insurance. Here's a sampling of that research:

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2/6/2020 Scott Gottlieb: Medicaid Is Worse Than No Coverage at All - WSJ

• Head and neck cancer: A 2010 study

of 1,231 patients with cancer of the
throat, published in the medical
journal Cancer, found that Medicaid
patients and people lacking any health
insurance were both 50% more likely
to die when compared with privately
insured patients—even after adjusting
for factors that influence cancer
outcomes. Medicaid patients were 80%
more likely than those with private
GETTY IMAGES insurance to have tumors that spread
to at least one lymph node. Recent
studies show similar outcomes for breast and colon cancer.

• Major surgical procedures: A 2010 study of 893,658 major surgical operations performed
between 2003 to 2007, published in the Annals of Surgery, found that being on Medicaid was
associated with the longest length of stay, the most total hospital costs, and the highest risk of
death. Medicaid patients were almost twice as likely to die in the hospital than those with
private insurance. By comparison, uninsured patients were about 25% less likely than those
with Medicaid to have an "in-hospital death." Another recent study found similar outcomes for
Medicaid patients undergoing trauma surgery.

• Poor outcomes after heart procedures: A 2011 study of 13,573 patients, published in the
American Journal of Cardiology, found that people with Medicaid who underwent coronary
angioplasty (a procedure to open clogged heart arteries) were 59% more likely to have "major
adverse cardiac events," such as strokes and heart attacks, compared with privately insured
patients. Medicaid patients were also more than twice as likely to have a major, subsequent
heart attack after angioplasty as were patients who didn't have any health insurance at all.

• Lung transplants: A 2011 study of 11,385 patients undergoing lung transplants for pulmonary
diseases, published in the Journal of Heart and Lung Transplantation, found that Medicaid
patients were 8.1% less likely to survive 10 years after the surgery than their privately insured
and uninsured counterparts. Medicaid insurance status was a significant, independent
predictor of death after three years—even after controlling for other clinical factors that could
increase someone's risk of poor outcomes.

In all of these studies, the researchers controlled for the socioeconomic and cultural factors
that can negatively influence the health of poorer patients on Medicaid.

So why do Medicaid patients fare so badly? Payment to providers has been reduced to literally
pennies on each dollar of customary charges because of sequential rounds of indiscriminate
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2/6/2020 Scott Gottlieb: Medicaid Is Worse Than No Coverage at All - WSJ

rate cuts, like those now being pursued in states like New York and Illinois. As a result, doctors
often cap how many Medicaid patients they'll see in their practices. Meanwhile, patients can't
get timely access to routine and specialized medical care.

The liberal solution to these woes has been to expand Medicaid. Advocacy groups like Families
USA imagine that once Medicaid becomes a middle-class entitlement, political pressure from
middle-class workers will force politicians to address these problems by funneling more
taxpayer dollars into this flawed program.

President Barack Obama's health plan follows this logic. Half of those gaining health insurance
under ObamaCare will get it through Medicaid; by 2016, one in four Americans will be covered
by the program. A joint analysis from the Republican members of the Senate Finance and House
Energy and Commerce Committees estimates that this will force an additional $118 billion in
Medicaid costs onto the states.

We need an alternative model. One option is to run Medicaid like a health program—rather than
an exercise in political morals—and let states tailor benefits to the individual needs of patients,
even if that means abandoning the unworkable myth of "comprehensive" coverage.

Democratic and Republican governors are pleading with the president for flexibility to do just
this. At least so far, this has been a nonstarter with an Obama health team so romanced by
Medicaid's cozy fictions that it neglects the health coverage that Medicaid really offers, and the
indecencies it visits on the poor.

Dr. Gottlieb is a clinical assistant professor at the New York University School of Medicine and a
resident fellow at the American Enterprise Institute.

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