No one would deny that we’ve reached a point in public healthcare finance where tough choices have to be made about what gets covered and what doesn’t. There is, however, one fairly easy choice, and that is to reconfigure the $3 copay for Medicaid members using the emergency room.
I would propose a replacement benefit of $0 for the first visit and $20 for each subsequent one, in a given calendar year. Not every state, but any state that reaches certain thresholds for physician access or urgent care availability may switch to this policy.
Here are the arguments in favor. First, each $3 visit costs the state and federal government about $500. There are few discretionary or semi-discretionary patient decisions that cost so little to trigger so much taxpayer spending. (Hospitalizations have that kind of ratio, but a patient can’t check himself into a hospital the way he can visit an ER.)
Second, one must consider the historical context. The $3 copay (“$3” is a shorthand for $0 to $10 — I don’t think it is over $10 anywhere) is a vestige of the bad old days when it was very difficult to find physicians who accepted Medicaid patients. That is still the case in some locales; they would not be eligible for this waiver. The world has changed, but the copay hasn’t.
Third, ER utilization rates in the TANF population, which because of its average age is generally pretty healthy, far exceed that of the commercially insured population. This is despite the fact that TANF members in general cost much less than commercially insured people, a gap that widens still further once birth events are removed from the calculation. Clearly there is much excess utilization.
Fourth, while avid readers of this blog may recall that I am no fan of North Carolina Medicaid, my objections are confined solely to their consultant’s math — Milliman USA embarrassed themselves and their client by coming up with obviously impossible conclusions. See here. By contrast, I do think they (meaning Community Care of North Carolina) have done as good a job as possible under public-sector constraints to enhance access to care for Medicaid members, and my hat goes off to them for the tremendous efforts they’ve made.
However, what we’ve learned from that experiment is that the best-designed network in the world won’t attract Medicaid members if the ER is basically still free. Yogi Berra called this one right: “If people don’t want to come to the ballpark, you can’t stop them.” For this model or any other access models to be given a chance to work (and to be given a chance to pay for themselves), member economics have to support the access strategy.
Finally, this is not a take-away. The proposal would be $0 for the first visit — a cost savings. And obviously if someone shows up for a second visit without $20 and it’s a true emergency, that person wouldn’t be denied care. (It also may not be easy to check eligibility for the $20, but most of the value of this policy is in people thinking that they might be charged $20, and deciding to go to their doctor instead.)
All the old objections need to be discarded or can be addressed. Yes, transportation may be hard to come by but most doctor offices are more accessible than most hospitals. Yes, after hours doctor offices aren’t an option. That could be addressed by a call to a doctor to clear a visit to the ER.
I’m sure there will be objections — the THCB regulars are nothing if not opinionated — but please make sure to propose an alternate way to save a large chunk of money involving more savings and less of a take-away.
Al Lewis, president of the Disease Management Purchasing Consortium, is author of the critically acclaimed 2012 humorous look at the innumeracy of health plans, consultants and vendors, Why Nobody Believes the Numbers.