Texas without Medicaid?

the new Texas legislature convenes in the next few weeks, it will face a projected multi-billion dollar state budget deficit. Among the suggestions for managing the shortfall is a proposal for the state to opt out of the federal Medicaid program in favor of a state-run alternative. The cost vs. benefit calculations for this proposal will be complicated and interesting. Millions of federal matching dollars are tied to Medicaid participation but let’s just assume that it could be done; on September 1^st, 2011 Texas’ neediest citizens lose Medicaid coverage and instead receive healthcare coverage directly through the state. Remember, the state budget is fixed so every dollar we spend on healthcare is a dollar not spent on higher education, on our state parks, on improving our roads, on beefing up our highway patrol, in short, on lots of things that make our lives safer and more enjoyable. With that in mind, how could such a program be designed so that it delivers effective medical care less expensively? Here are my thoughts:

Tort Reform – Necessary but not Sufficient

When proposition 12, the Texas constitutional amendment that placed strict limits on non-economic damages in civil tort cases, was being debated, many physicians said that strong tort reform would decrease the cost of healthcare in Texas. To be certain, tort reform has been very beneficial. It has reduced the cost of medical malpractice insurance for Texas doctors and, more importantly, it has made our state an attractive place to practice relative to states with more plaintiff-friendly laws. However, it has not substantially reduced the cost of healthcare. This is so not because tort reform was a bad idea. In fact, I happen to think it was a very good idea, but because there are too many other forces driving costs higher. Until we can address the totality of these forces costs will continue to escalate despite tort reform. So tort reform alone is not sufficient to reign in cost but it is a necessary part of cost control and, in many ways it should be even stronger than it is today. The courts are simply the wrong places to address the critical problems of medical quality and injury due to medical error. Court cases address problems one at a time rather than helping us identify patterns that lead to the correction of flawed systems. They rely on patients who are or think they are aggrieved to identify the provider or providers involved. Nice but incompetent doctors never get sued and brilliant but crabby doctors get sued more than they deserve. And, in order to get the largest settlement possible, plaintiff’s attorneys name every doctor who came within 20 feet of the patient so facilities and physicians who had little or nothing to do with the problem spend lots of time and money getting themselves out of lawsuits . Patients often sue because they had a bad outcome whether or not such an outcome could have been avoided or was an expected complication of their procedure. Since the attorneys hire the expert witnesses who are supposed to opine upon the standard of care, juries are often treated to the personal opinions of hired guns rather than objective views from real authorities.

In a future post, I will describe how I think malpractice cases should be handled but for now, it suffices to say tort reform alone is not going to drastically reduce costs.

An Ounce of Prevention is Worth…well, a lot!

The cheapest type of healthcare is the type we never have to provide because we prevent the illness or injury from happening. If we are going to reduce the cost of healthcare, we have to get serious about prevention. For example, in a study conducted 10 years ago, it was determined that 17,000 people died in alcohol-related traffic accidents but more important for our purposes is the fact that 300,000 people were injured severely enough to seek medical attention. Just to pull some numbers out of thin air, let’s assume that 5,000 of those people were Texans whose injuries required intensive care unit for 5 days. Let’s further assume that the ICU costs about $1000 per day.  So, just the ICU care cost $25,000,000 dollars. Add in the costs of emergency department treatment, imaging, surgery, rehabilitation, the court system, etc. and you get to a huge number pretty quickly. Harris County alone leads the nation in drunken driving fatalities and certainly has more than its share of severe injuries. But it doesn’t have to be this way. Many other countries have essentially eliminated this problem despite allowing the legal purchase of alcohol at a younger age than in the US.  In a future post, I will discuss this in detail. And, injuries from drunken driving are only one of several kinds of preventable illness. In my opinion, preventing what is preventable has to be part of the solution but my view is controversial.  Why? Because just about every effective form of prevention is going to impact someone’s personal freedom. We don’t have much sympathy for the person who wants to get behind the wheel of car after drinking enough Tequila to fill a bathtub but what about requiring motorcyclists to wear helmets? The Texas helmet law was repealed some time ago so as to allow those of our citizens who wish to do so to “ride free”. Unfortunately, when they are involved in an accident, they don’t “ICU free”, or “surgery free”, or “rehab free.” All of those things are very costly.

So what do we do? We have “public service announcements” telling people not to drink and drive, encouraging helmet use, describing the dangers of smoking, and the list goes on. And are these things effective? Well, if the message is delivered in the right way, some of them do reach some people but what really works is legislation that is enforced. Take the studies comparing rates of drowning in neighboring jurisdictions one of which mandates pool fencing and the other of which just recommends such measures. Which has more drowning? While we would love to think that once people are told that placing a fence around a pool prevents children from drowning, in fact, when given a choice, many people choose to save money and skip the fence. But, when the law mandates a fence around your pool; you build a fence. Drowning deaths are dramatically lower in places that require pool owners to have a fence.

Now, I’m certainly not suggesting a totalitarian system and I understand that it will take a combination of efforts including public service announcements and creative taxation but in some cases, the most effective solution is going to be legislation.

For the next several weeks I’m going to post more ideas and explore what I have just posted in more detail.  I would also like to hear your thoughts and ideas.