My Interview of Dr. Deane Waldman: Fireside Chat on Why Price Transparency Won’t Work (But could...)5/3/2024 Watch this interview that I did with Dr. Deane Waldman on the costs and benefits of mandating price transparency by hospitals and whether it will result in anything productive at the Third National Health Care Transparency & No Surprise Act Summit, This interview was aired at https://www.hctransparencysummit.com/.
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In this episode, we discuss: 1) How Arkansas continues to grapple with the same issues decade after decade, including a broken foster care system, high poverty rates, and poor K-12 reading scores; 2) Why safety net reforms are key to Arkansas' flourishing, specifically concerning Medicaid; and 3) How more school choice would put Arkansas on the map, and why Arkansas has the potential to be the next go-to state like Texas, Florida, and Tennessee. Nic’s bio:
For show notes, thoughtful insights, media interviews, speeches, blog posts, research, and more, check out my website (https://www.vanceginn.com/) and please subscribe to my newsletter (www.vanceginn.substack.com), share this post, and leave a comment. This commentary was originally featured in RealClear Health on June 14, 2017.
Progressives and conservatives actually agree on health care: A crazy idea? Perhaps not. California, the West Coast bastion of progressivism, is pushing to create a single-payer health care system for its 39 million citizens. State Sens. Toni Atkins and Ricardo Lara have introduced Senate Bill 562 called the Healthy California Act, or HCA, which seeks to “establish a comprehensive universal single-payer health care coverage program and a health care cost control system for the benefit of all residents of the state.” After the California Senate passed the HCA on June 1, the state Assembly and Gov. Jerry Brown are the only barriers from realizing this progressive dream. The HCA would provide all needed medical services from prenatal to nursing homes for all residents of the Golden State regardless of immigration status or financial condition. It would establish a California government insurance monopoly, as it would prohibit competition from private insurance carriers. Among a host of contentious issues about such a bill, one immediately stands out: cost. Clearly, such a cradle-to-grave, soup-to-nuts health care-giveaway to everyone would be very expensive. Even Gov. Brown was skeptical, musing, “Where do you get the extra money?” In California’s proposed FY 2018 budget that begins July 1, the combined general fund and special funds amount is $180 billion. The Senate Committee on Appropriations’ cost estimate of the HCA is roughly double that part of the budget at $400 billion per year, which they note could be offset by $200 billion in existing state, local, and federal funds. It is highly doubtful that California could squeeze any more money out of Washington. Therefore, unless major cost savings are found elsewhere, California’s government would have to rely on taxpayers to fund an additional $200 billion per year. Given that California legislators must balance their budget every year, Californians would bear the full brunt of this cost via dramatic increases in their tax burden. This inevitable higher tax burden would be detrimental to an already over-taxed, excessively regulated economy. These facts detract from any initial enthusiasm for single-payer in California. It may well reduce economic activity with no assurance of improved patient care, which is (or should be) the primary focus of any health care plan. And yet, California should be allowed to try. At a rally in support of the HCA, Sen. Lara said, “Given this picture of increasing costs, health care inefficiencies, and the uncertainty created by Congress, it is critical that California chart our own path.” Texas, on the other hand, could be viewed as a stronghold of conservatism, in many ways the polar opposite of California on the political spectrum. Although 30 percent of 28 million Texans are insured through Medicare or Medicaid, many Texans want to replace federally empowered Obamacare with something else. Considering the ample evidence that patients on Medicaid have poorer outcomes than those without insurance, government-provided insurance often fails to achieve the goal of improved patient care. Texans have reason to be suspicious of California’s path when choosing a health care system. However, neither state, nor any state, can choose. One might quickly conclude that conservative Texans vehemently disagree with progressive Californians about health care. Not necessarily. Conservatives believe first and foremost in states’ rights and that decisions made closer to the people are better for the people. If California wants single payer, and Texas wants free market, and Oregonians want their idea of universal health care, each should be allowed to determine their own health care system. Conservatives would say, “we all have a constitutional right.” Those who strongly oppose the Affordable Care Act but believe in state rights should support another state’s choice to have Obamacare within its state borders. Apparently, conservatives and progressives agree on health care. They concur that Washington should not force federal choices on California, Texas, Oregon, or any of the other 47 member states of our republic. What Senator Lara advised California—let us “chart our own path”—applies with equal force to every other state. https://www.texaspolicy.com/blog/detail/california-and-texas-agree-on-health-care Originally published at Real Clear Health.
By Deane Waldman & Vance Ginn February 20, 2017 Most people have heard the aphorism, “if it sounds too good to be true, it probably is.” Referring to the GOP’s cure for Medicaid, “If it sounds too good to be true, it might be true; but guaranteed, it won’t be good.” A Feb. 6, 2017 report on Medicaid makes this point perfectly. The GOP commissioned a study by Avalere Health, a health care consulting group, to assess the fiscal impact of federal block grants to state Medicaid programs. They evaluated two funding approaches: a lump sum to be negotiated and a per capita, i.e., per enrollee, formula. Their study showed that block grants could save Washington between $110 billion and $150 billion over five years depending on which formula was used. Roughly half the states would get a small increase in their federal contribution and half would get less, sometimes a lot less. The biggest loser, Arizona Medicaid, would receive 62 percent less than it is currently receiving from Washington. With the present Medicaid state-federal matching scheme, the more a state spends, the more money it gets from Washington. This produces a classic perverse incentive: rewarding the outcome you don’t want. We want states to reduce spending, yet Washington rewards them—with federal dollars—when they spend more! With a block grant, this perverse incentive goes away. This is a good thing. Medicaid block grants could save $110-150 billion and would eliminate the perverse incentive. Sounds like a great idea. It makes wonderful sound bytes, and the GOP seems to want to run with it. There is just one teeny, tiny problem with block grants as proposed: no health care. The federal government can, and in recent years does, spend more than it takes in as tax revenue. The federal government is able to do this because Washington has the option to issue debt and finance it by printing dollars through the Federal Reserve’s open market operations. States cannot, print money that is. Because states must live within their means, Medicaid programs will have to cut services to patients in order to balance their budgets. For a specific example, simple financial arithmetic shows that the GOP plan for block grants to Medicaid will reduce access to care. Whether a lump sum or per capita contribution, the block grant approach gives a fixed amount to the state. That is the state’s Medicaid income from Washington. Federally mandated spending—the state’s Medicaid cost—is constantly increasing and exceeds available funds. Between 2011 and 2015, spending on Texas Medicaid increased from $27.7 billion to $30.4 billion. That is a 13.5 percent increase in the state’s cost compared with only an 11.8 percent increase in population growth plus inflation. Texas, just like other states, cannot spend more money than it takes in. Unlike most other states, Texas has had a robust economy and was able to compensate for its yearly Medicaid shortfalls by routinely passing supplemental spending bills. States such as Illinois, Connecticut, and Massachusetts that flirt with bankruptcy cannot do this. What occurred in New Mexico, another cash-strapped state, demonstrates the effect of Washington’s spending mandates on the state’s Medicaid program. New Mexico expanded its Medicaid program and received an additional $3 billion from the federal government. However, the Land of Enchantment was required by federal law to spend $417 million more on insurance benefits and bureaucracy in 2017 than the state had in its bank account. Without the luxury of Texas’ exuberant economy, New Mexico had to cut spending somewhere while remaining compliant with federal regulations. Thus, they cut reimbursements to providers. Now think about all those states—26 of them and the District of Columbia according to the Ayalere study—that will receive less money under the GOP block grant scheme. They will still have to spend according to federal mandates. And just like New Mexico, they will be forced to cut services in order to balance their budgets. Half of the nation will be filled with Medicaid-insured patients who expect to get the care they need but can’t get it, for lack of doctors. Apparently, the GOP can’t do simple fiscal arithmetic. Enamored with their fundamentally flawed, one-size-fits-all block grant, they will cut costs, and cut care without fundamental health care reform to focus on improving patient care. There is a way to make this work. Along with block grants, repeal the federal Medicaid mandates. That would put control of spending where it belongs—at the state level, closer to patients. Administrative processes could be streamlined. Resources would be apportioned more closely in accordance with local needs. Healthcare dollars could actually be spent on health care. We can fix Medicaid using block grants, but only by giving control of both income and spending to the states. Advocates of Medicaid expansion in Texas often highlight our state’s record of the largest uninsured population in the nation, according to a recent U.S. Census Bureau report. Though the uninsured rate is falling, advocates say, it would fall even faster if we expanded Medicaid.
However, expansion supporters overlook research showing that Medicaid patients have poor health outcomes, access to care is relative to private health coverage, and the growth of the program’s costs are unsustainable. To address these concerns, for both Medicaid enrollees and taxpayers, it’s time to reform the Medicaid program to improve access to quality health care while saving taxpayers billions of dollars annually. Skyrocketing Medicaid costs contributed to spending more on health care than on education for the first time in Texas history during the last budget cycle. Medicaid now accounts for 23 percent of general revenue appropriations in the current budget — up an unbelievable 42 percent as a share during the last decade. If Texas expands Medicaid and receives dwindling federal funds to cover more enrollees, state costs will continue to soar. This has been the case in Ohio and elsewhere, where the actual expansion cost during the just first 18 months has exceeded the $2.56 billion projected amount by a staggering $1.5 billion. With Medicaid already crowding out budget priorities, Texans might soon have to forgo other government services, even as Medicaid enrollees receive substandard quality care without substantial reform. Fortunately, there is a solution: the Texas Medicaid Reform Model. Instead of Texas receiving matching federal funds to pay for Medicaid, the state would receive a lump sum of federal funds, also known as a block grant. In exchange, the state would get more flexibility over the program. For example, Texas could allocate federal and state funds to subsidize private health insurance for nondisabled children, pregnant women and adults approved to receive benefits from the Temporary Assistance for Needy Families program. My colleague John Davidson and I calculated the savings this approach could achieve using coverage costs based on the federal exchange’s gold or silver Affordable Care Act (ACA) plans. Subsidies to pay for an enrollee’s monthly premium would be based on a sliding scale determined by the federal poverty level (FPLs) — with the amount decreasing as the enrollee’s income increases up to the nonexpanded Medicaid maximum FPL per risk group. An enrollee’s contribution would be no more than five percent of their income in most cases, which is substantially less than the eight percent maximum under the ACA. For example, a pregnant woman enrolled in Medicaid today costs the state, on average, $718 per month. Since she’ll likely receive additional care throughout her pregnancy, making her health care costs higher, she could be offered a gold plan with a $435 monthly premium. Given her income of $920 per month is near 100 percent FPL, the state could subsidize 90 percent of the premium, lowering her monthly contribution to $44. This would be a cost-savings to taxpayers of $327 per month. We used this approach to calculate the reform costs for all considered risk groups based on actual and projected enrollment data for 2013 to 2023 from the Texas Health and Services Commission (HHSC). Comparing HHSC’s cost estimates under the status quo to our reform model, cost-savings could be at least $4 billion dollars per year, increasing to as much as $6 billion per year by 2023. Because the cost of private health coverage is artificially inflated due to government restrictions and mandates in Obamacare, health insurance deregulation could lower these costs. Choices made by enrollees who have more control of their health care could also increase savings through more efficient use of health care dollars. In addition, reforms to Medicaid long-term care could also help bend the cost curve. By transforming a joint federal- and state-directed Medicaid program into one that allows some enrollees a path towards private, market-based, patient-centered coverage, those currently enrolled in Medicaid will receive higher quality health care and save taxpayers billions of dollars. We owe it to all Texans to pursue such a reform.
Don't miss this video where I present the Foundation's Medicaid reforms that saves taxpayer dollars and provides better access to quality care and outcomes for recipients.
A supplemental spending bill passed by the 84th Legislature caused total state spending on health and human services (Article II) to exceed education spending (Article III) for the first time in Texas history. As the state’s Medicaid rolls continue to grow (even without the ACA Medicaid expansion), hospitals face looming federal funding cuts, and the state grapples with unprecedented healthcare costs, how can we stabilize the growth of state healthcare spending while improving access to and quality of care? Featuring Rep. Garnet Coleman, Texas House of Representatives Dr. Vance Ginn, Economist, Center for Fiscal Policy, Texas Public Policy Foundation | Presentation Camille Miller, President & CEO, Texas Health Institute | Presentation Moderated by John Davidson, Director, Center for Health Care Policy, Texas Public Policy Foundation http://www.texaspolicy.com/multimedia/video/uncompensated-care-medicaid-and-solutions-to-texas-health-care-crisis-po2016 This commentary originally appreared in Forbes on October 15, 2015.
Most across the political spectrum agree that the government should provide some degree of access to healthcare for the poor and disabled. Disagreements tend to be over to what extent that access should be provided and whether people should be forced to purchase health insurance, as is the ongoing conversation at the heart of Obamacare. To increase the number of insured people, Obamacare mandated that everyone have some form of health insurance or pay a $95 penalty the first year, increasing steeply thereafter. While this “individual mandate” clearly imposes costs on an individual’s budget and liberty, the U.S. Supreme Court did give states the option to expand Medicaid—the federal-state healthcare program for the poor and disabled. Obamacare also introduced online federal insurance exchanges that include subsidies to help lower-income people purchase private health insurance and has drastically increased the eligibility criteria for those qualifying for Medicaid. The Census Bureau recently reported that one year after Obamacare began the number of uninsured fell by 8.8 million to 33 million. This reduction seems rather minimal when individuals are forced to purchase health insurance or pay a penalty along with a decade cost of at least $1 trillion. Critics blame the less than impressive decline on the 20 states that have not expanded Medicaid. However, these states are actually better equipped to care for those most in need because the states that have expanded Medicaid have seen much higher costs than projected. For example, Ohio’s expansion cost of $4 billion has been $1.5 billion greater than initially projected because per-member costs and enrollment were substantially higher than first thought. The federal government has held a large carrot in front of states to pressure them to expand Medicaid by paying 100% of the increase in costs for the first three years through 2016. That share will gradually decline to 90% of the costs by 2020 and likely lower thereafter, leaving less of a stick to fall back on later. This carrot and stick approach gives critics ammunition to claim that states that haven’t expanded are costing them dollars. The Kansas Hospital Association, which is in favor of Medicaid expansion, has a ticker on its website showing that the state’s choice not to expand has cost Kansas almost $750 million since January 1, 2014. This completely overlooks the fact that the state will face a growing share of the long-term costs, putting many Kansans’ on the program at risk. Federal payments for Medicaid are based on matching state dollars depending on the state’s average per capita income. These payments range from 50% of the cost in Wyoming, to 57.13% in Texas, to 74.17% in Mississippi. The National Association of State Budget Officers recently noted that for the first time Medicaid represented a majority of federal funds to states in 2014. In general, healthcare spending under Medicaid is rising at an unsustainable pace. Unless other budget priorities are forfeited, taxpayers may soon have to pay higher taxes. This has been the case in Texas. While Texas didn’t expand Medicaid, the costs continue to skyrocket and during the last budget cycle increased healthcare spending to more than education spending for the first time in Texas history. The states’ share of General Revenue appropriations to Medicaid has increased by 42% to 23% in just over a decade. Texas is now faced with how to best meet the needs of those on Medicaid and patients on the program are not receiving adequate care. Research shows that Medicaid patients have poor access to care and poor health outcomes. On the other hand, patients with private health insurance top both categories. Considering these costs, the Texas Public Policy Foundation devised the Texas Medicaid Reform Model that first requires a federal block grant for Medicaid instead of matching funds. This would allow the state to allocate federal and state funds to assist non-disabled risk groups (i.e. kids, pregnant women, and adults eligible for TANF) purchase private health insurance based on a sliding scale determined by the federal poverty level (FPL). As an enrollee’s income falls into a lower FPL category, the subsidy amount for monthly private health insurance premiums would increase until the subsidy covered 100% of the premium for the zero to 50% FPL range. At higher income levels for each risk group up to their maximum FPL under the current Medicaid program, enrollees would be required to contribute to the cost of their private coverage. We based the coverage cost on gold or silver plans under the federal exchange. Enrollee contributions would be no more than 5% of their income on healthcare in most cases, which is substantially lower than the 8% maximum under Obamacare. Using data from the Texas Health and Human Services Commission (HHSC) from 2013 to 2023, our cost estimates from our reform model compared with HHSC’s data show that Texas could save at least $4 billion per year, increasing to around $6 billion by 2023. Cost-savings will likely be much higher as more competition in the private health insurance market bid down prices and patients have more control over their future healthcare needs. This patient-centered, market-based model should be a path forward for other states to follow so patients will be in the driver’s seat when it comes to controlling their healthcare costs. For the poor and disabled insured through Medicaid but who receive fewer positive outcomes and limited access to care and all taxpayers who pay more for this program than private coverage under our proposal, the time for reform is now. http://www.texaspolicy.com/blog/detail/choosing-not-to-expand-medicaid-was-the-right-call-but-we-still-need-reform Originally published at TPPF. The Texas Medicaid program is on an unsustainable trajectory. Steadily rising healthcare costs and growing enrollment mean that Medicaid is consuming an ever-growing share of the state budget. If no reforms are put in place to control spending growth, the Medicaid program will eventually crowd out other state spending priorities. |
Vance Ginn, Ph.D.
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