Monday, June 02, 2003
Copyright © Las Vegas Review-Journal

EDITORIAL: Medicaid meltdown

Tightening eligibility would allow doctors to be paid more

A growing number of Nevada physicians who specialize in pediatric care are finding they can no longer afford to take on low-income patients who are enrolled in the Medicaid program, because the government's reimbursement rates fail to cover doctors' out-of-pocket costs. The situation is becoming more acute, as pediatric specialists are not accepting new Medicaid patients, unless the children are in need of emergency care.

Consider Dr. Nicholas Fiore of Sunrise Hospital, one of the four remaining pediatric general surgeons practicing in Southern Nevada. Before Medicaid physician reimbursement rates were cut earlier this year, Dr. Fiore was paid about $1,200 to perform surgery on a child with a ruptured appendix. But with the new rates in effect, he gets a mere $440 altogether for the procedure, the initial consultation and seven to 10 days of follow-up care after the operation. That amounts to about $44 an hour.

Dr. Fiore points out that even though he works 70-hour weeks, his medical malpractice insurance premiums total $35 an hour, and his office overhead runs roughly $250 an hour. It's easy to see why physicians in private practice are just refusing to routinely accept new Medicaid patients.

The politically expedient way out of this mess would be to bump up reimbursement rates to their old levels and stick taxpayers with the bill. While doctors may deserve higher pay, Medicaid's systemic problem remains. It's too easy for people who aren't poor to take advantage of this entitlement.

In a May 1 policy study on the state fiscal crisis for the American Enterprise Institute, budget scholar Michael Greve points out that Medicaid absorbed roughly 10 percent of state spending in 1987. But that share has grown over time, so that Medicaid now constitutes more than 20 percent of state budgets, leaving less money for education, public safety, transportation ... or tax relief.

State lawmakers and governors, including our own Kenny Guinn, like to blame rising poverty levels and the federal government for inflating Medicaid's costs by passing along unfunded mandates from Washington, D.C.

Mr. Greve says such claims can't withstand scrutiny. For one thing, from 1994-2000, during the longest economic boom in U.S. history, Medicaid costs exploded. In Nevada, for instance, during that time, the state poverty level fell by 23.4 percent. And yet, the state's portion of Medicaid spending rose by more than 38 percent.

Why? Easy eligibility. And as for the canard that unfunded mandates drive up costs, Mr. Greve writes: "Those mandatory services, however, constitute a steadily diminishing share of Medicaid. Nearly 70 percent of expenditures are now devoted to services and populations that the states may, but need not, cover under Medicaid."

State policy-makers exacerbate the situation by offering "free" care to the non-poor, as in the much-ballyhooed Nevada Check-up program, which covers children whose families make too much income to qualify for Medicaid but have decided not to carry private insurance.

Medicaid must be reformed root and branch, first by tightening eligibility requirements. The federal government must also make carrying private health insurance more affordable for individuals and small business owners. Medical Savings Accounts would be a major help, here.

Until then, the Medicaid Monster will continue lurching out of control, relegating the truly poor to substandard medical care.