Healthcare

Conservatives must make Medicaid reform a top priority. The issue has become too big to ignore and without conservatives who understand markets, incentives, and fiscal responsibility, the debate is sure to keep resulting in policies bound to fail. 

Governors and state legislators in capitals from coast to coast are intimately familiar with the annual crisis that is Medicaid. They also know the standard “solutions” that are trotted out to meet next year’s budget numbers. These are generally limited to: cut people, cut reimbursement rates, cut benefits, or complain that Washington isn’t paying enough (despite the open-ended federal match in place for 40 years). Then like clockwork, Medicaid requires a similar patchwork of short term fixes the following year.

 Conservatives must approach Medicaid first and foremost as a program that is failing to provide adequate health care services to low-income Americans. Ask any doctor what he or she thinks of the Medicaid program and you are likely to get an earful about excessively low payments that strongly discourage physician participation. If you are feeling bold, you can ask the same doctor if he or she would like to see more of the middle class in Medicaid. It is impossible to have a successful Medicaid program without participating providers.  

This past summer we at the Center for Health Transformation partnered with Gallup to produce a survey of people on Medicaid about their attitudes toward the program. 88 percent said that Medicaid should encourage people to be healthier. 70 percent said that Medicaid should offer more coverage options. 76 percent said they would be more motivated to improve their health status if their plan offered extra benefits or discounts for following doctors’ orders. 76 percent said they would change their diet specifically (a chief factor determining health status) if it resulted in earning money.

Conservatives looking for a role model on this issue should look to the work of former Florida governor Jeb Bush. No one in either political party has done more to create a 21st century intelligent Medicaid system that utilizes rewards and incentives to arrive at a program focused on better health outcomes at lower cost.  

When former governor Bush began his efforts to dramatically improve Florida Medicaid, he started with two items. First, he made the moral case that the Medicaid fee-for-service program was failing poor people. For example, less than half of kids were getting well child check ups. Only 16 percent of children were getting preventive dental screenings. 4 percent of women in Medicaid were getting mammograms. The latter was a major contributor to African-American women having the highest death rate from breast cancer.  

Second, he challenged all interested parties to come up with a plan as a submission to the debate. This effectively called the bluff of Washington-based left wing think tank types who had many complaints about the Bush proposal, but no plan of their own beyond the throwing more money at the same old broken system. I had the chance to ask Governor Bush about this last month at our third annual, "Creating a 21st Century Medicaid System" event. He stated unequivocally, "the opponents of this did not have an alternative." 

Enhanced benefit accounts are a key feature of the new Florida model. These are zero balance accounts that reward Medicaid beneficiaries for compliant behaviors that lead to improvements in their health status. Some conservatives are quick to dismiss this notion as paying people to do things they should already be doing. But paying a diabetic a couple hundred dollars a year to manage their condition better can mean savings of several tens of thousands of dollars in unnecessary emergency room visits. 

Smart companies with their own money at stake have realized that small payments for healthy behaviors at the front end have very large back end savings. Alegent Health Systems in Omaha began a series of payments for employees back in January 2006. They paid people $100 to take a health risk assessment. There were further payments for enrolling with a health coach and meeting certain health metrics. At the end of 2006, Alegent reported dramatically better health outcomes, $2 million in cash that employees got to rollover into 2007, and an overall cost trend of one percent. There are lessons here for Medicaid. 

Medicaid is an issue that conservatives should embrace instead of ceding to the left. There is no other public policy arena in America that is so in need of conservative influence. It is a complex issue to be sure, but a long term winner in terms of lives saved and the dollars of hardworking taxpayers spared. We at the Center for Health Transformation have a long and growing menu of policy options to dramatically improve Medicaid and to do so at lower cost.  

Jim Frogue is the State Project Director at the Washington DC based Center for Health Transformation founded by Newt Gingrich. For more information on the Center go to www.healthtransformation.net .  Frogue's full bio can be found here.