Moms, Kids Hit Hard As Medicaid Faces Scalpel

Several states are cutting their Medicaid budgets.

Several states are cutting their Medicaid budgets. istockphoto.com hide caption

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As government officials work on reducing the federal deficit, over 12 states are lowering pay for doctors, health care providers and hospitals treating the poor. To learn how the cuts started and what consequences they bear for the public, host Michel Martin speaks with NPR Health Policy Correspondent Julie Rovner and Dr. David Ellington, who practices in one of the states imposing cuts.

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MICHEL MARTIN, Host:

I'm Michel Martin and this is TELL ME MORE from NPR News. Just ahead NASA's final shuttle launch last Friday brought cheers and tears to people around the country. This week, as the shuttle completes its final mission, we decided to take a look at some of the people who made history on their shuttle flights. It's our series Flying High The First in Their Class. We'll speak with the first Latina Astronaut a little later in the program, but first we're returning to a subject that preoccupies us these days - the budget.

And as the officials trying to reach agreement on reducing the federal budget deficit continue their work, you've probably heard that cuts to Medicare are on the table. That's the big federal entitlement program that helps pay for health care for seniors. But another large health care program is already facing cuts. That is Medicaid. Medicaid is a joint state federal health care program for millions of low income and disabled people. In an effort to combat rising costs more than ten states are cutting pay for doctors, health care providers, and hospitals that treat the poor.

This comes at the beginning of the new budget year for most states. Here to tell us more about this are Julie Rovner, NPR's health policy correspondent; and also with us, Dr. David Ellington. He's a family physician who practices in Virginia, one of the states imposing the cuts. And we've been touching base with Dr. Ellington, from time to time, to get his views on contemporary issues and health care and health policy. Thank you both so much for joining us.

JULIE ROVNER: Nice to be here.

DAVID ELLINGTON: Thank you for having me back.

MARTIN: So, Julie how did these cuts in Medicaid start? Where are these cuts happening and how did this start?

ROVNER: Well, what really happened was in 2009 when the states were at their worst possible moment, because of course, the bottom had fallen out of revenues; and states, of course, unlike federal government have to balance their budget. In the stimulus bill, states we're given a big chunk of money to help them, primarily with their Medicaid costs. It was close to a hundred billion dollars. That money ended as of July 1st, so that money is gone and states had basically no choice but to find a way to make up that money.

Their revenues have rebounded a little bit, but not enough. One thing that states can't do thanks to the new health law is change eligibility for Medicaid. They must maintain their eligibility right through to the beginning of when most of the changes in eligibility for the new health law take effect in 2014. So, they've got this, you know, couple of years where they're not getting that extra money from the federal government but they can't change eligibility. They can't basically put people off the roles.

So, they have no choice, really, but to do other things to Medicaid like cut back payments to providers. So that's why you're seeing what you're seeing from these states. That's almost the only place they have to cut in Medicaid, because of course, health costs continue to rise. That's sort of inexorable. It's not unique to Medicaid. Health costs are rising across the board. There's nothing that the health law did that stopped health care costs from rising.

The things that the health law does to slow the health care spending are off in the future.

MARTIN: Okay, Dr. Ellington, you're one of the states that - you are practicing in one of the states that's imposing these cuts. What does it mean? Have you felt any immediate affect so far?

ELLINGTON: Well, Michel we haven't felt it right now, because I don't think it's come to full fruition. But as Julie said that the immediate emergency or the immediate cause of this, was a cut back in the stimulus funds. But at least for the last ten or fifteen years, the states have been dealing with this in many different ways - from just going from a strictly fee for service to many of the states now have strictly and tightly managed care Medicaid programs. And I think they have either pulled the rubber band to the point where it can't stretch anymore or tightened the belt to the point that it can't stretch anymore, and that the result now is cut back in providers.

However, there is one state that has done a wonderful job and an incredible job and that is the state of North Carolina. If you're familiar with Community Care of North Carolina, which is a public private partnership in the state and they have 14 physician lead statewide networks with over 4,500 primary care physicians and about 1,400 medical homes that cover the entire state. And they take care of a little over a million Medicaid beneficiaries and what they've done is they've been able to set up a medical home with care coordinators and provide cost effective comprehensive excellent care to the Medicaid beneficiaries in North Carolina.

They've saved the state of North Carolina over 1.6 billion dollars between 2007 and 2009 and they delivered documented, proven, excellent care. So, I think they're examples out there that show that you can do a good job with Draconian cuts.

MARTIN: If you're just joining us, you're listening to TELL ME MORE from NPR News. We're talking about the fact that more than a dozen states are starting off a new budget year by reducing pay for doctors, hospitals, and health care providers who treat low income patients through the Medicaid program. We're speaking with Dr. David Ellington. That's who you just heard. He's a family physician who practices in Virginia. We touch base with him, from time to time, to talk about, you know, issues like this in health care.

Also, NPR's Julie Rovner. So, Julie what about what Dr. Ellington was saying? I think what he's saying is that there is a way that you can cut the budget without necessarily harming care, but is the immediate concern that doctors will just stop taking Medicaid patients or will perhaps stop treating the people that they're already treating or cut them off?

ROVNER: Absolutely that's the immediate concern. It's - they're already Medicaid is - tends to be the lowest payer of, you know, between private payers in Medicare. Medicaid tends to pay the least and there are many, not so much primary care doctors, but specialists who simply will not take Medicaid patients. It doesn't cover their cost. But back to...

MARTIN: Can I just ask though what's the - is there a documented shortage of doctors taking Medicaid patients? Is there any documentation that says this is really how many physicians we need and this is how many there actually are?

ROVNER: There I don't know whether there's a nationwide documentation, but there are certainly more than enough anecdotes to suggest that it is very difficult for patients to find - particularly specialists. But there is one thing that we do know, there - and remember, there are many different kinds of Medicaid patients. There are low income women and children, there are the disabled, there are elderly patients, so they're different types. And in fact, it's the elderly and disabled who tend to be the very highest users of Medicaid money.

They're the minority of patients but they use the majority of the Medicaid care, and they tend to be institutionalized, so it's so - access is not so much an issue for them. It's the low income moms and kids who sometimes have trouble. And for them, in fact, it is - it's been found that getting them into a good managed care plan can be an answer to the access problem, just as the doctor was talking about. And there are examples of really excellent Medicaid managed care plans that can solve the access problem and save money.

And they're - we are seeing more and more examples of those around the country. Now, there are some kinds of managed care that don't necessarily work so well, so it's not a panacea, but there are places where Medicaid managed care is doing what the doctor has said - providing excellent care, saving the state money and solving this access problem.

MARTIN: Dr. Ellington, can I ask you about - among your peers, what's the scuttlebutt among your peers? Are doctors where you are saying well, that's it I'm not going to serve anymore of these patients or are they - what's the conversation?

ELLINGTON: Well, there is a lot of anxiety, Michel, because these people don't have places for care and often it is very difficult to find a provider. But there are other providers, especially - and I'm a family physician. I come from a primary care background where their budget is just being drawn as tight as it can.

MARTIN: Um-hum.

ELLINGTON: I think Julie, though, hit on a very good point that is often underappreciated, and that is the high dollars that are spent on institutionalized. And what she means by that, I believe, Julie what you meant by that, is nursing homes. I don't know the percentage of the total budget, but that is a significant amount of the budgetary expenses of Medicaid. But when Medicaid is cut, usually it's the young mothers and children who end up taking the brunt of the effect of those cuts.

MARTIN: Julie, what about that? Is that what people are saying they think might be the result here, is that people who are in institutions will probably continue to get care because they are already in place and that the people who aren't institutionalized, who are getting care, trying to find physicians in the community to treat them, they're the ones who are probably going to be most affected?

ROVNER: Well, that's what normally happens, although the nursing home industry is worried also. But yeah, the elderly and the disabled are about a quarter of the Medicaid population. They use more than half. In fact, I think it's closer to two-thirds of the money and that's always been the case with Medicaid.

MARTIN: OK. Final thought here, Julie. These cuts are already in place in these states and so that's - that is what it is. You were telling me earlier that there's a lot of concern because we're still - as we are speaking now, the ongoing discussions about reducing the federal debt and there's a concern now - immediately, what we're hearing most about are Social Security and Medicare. Is Medicaid also in play as part of these conversations?

ROVNER: Medicaid obviously is on the table. It is an enormous program. If you combine the state and the federal spending on it, it's larger than Medicare and it's also growing. So they're also looking to cut Medicaid. And remember, a lot of the people who are in nursing homes as Medicaid patients were not poor when they started out. They were middle class. You know, everybody thinks, oh, Medicaid is just for the poor. They're a constituency that doesn't vote. We don't really need to worry about them the way we need to worry about Medicare and Social Security.

But there really are efforts to try to protect Medicaid as well as protect Social Security and Medicare.

MARTIN: Because many of these people have already spent down their resources and are now effectively poor. Is that the reason?

ROVNER: That's exactly the reason.

MARTIN: Dr. Ellington, before we let you go, you were telling us that there's also - we'd like to check in with you just to see how things are going with you and you were telling us that you've actually experienced a big change, which is also part of, you know, the debate over healthcare reform in this country. That you are now - well, why don't you tell us what the big change is in your life?

ELLINGTON: Well, this is our first day on an electronic health record. I can tell you that it is quite a challenge, but just going through it, I think once we come out of the other side, it's going to be a very useful and beneficial experience.

MARTIN: The argument - the Obama administration has been a strong advocate of using electronic health records because they feel that it will improve care, minimize mistakes. Do you think that that's true? Well, it's very inefficient. Right this minute, it's very inefficient because we're just getting started. But in answer to the question, yes, I do think that's true. I think the ability to have the data at hand when the patient is in the room will, if used conscientiously, will cut down on waste, will cut down on repetition. You'll have all the data right in your hand. And I'm very optimistic that it can improve care.

Dr. David Ellington is a family physician in Lexington, Virginia. He was nice enough to join us from his office. Julie Rovner is a health policy correspondent for NPR, specializing in the politics of healthcare and she joined us in our Washington D.C. studio. I thank you both so much for joining us.

ROVNER: Thank you.

ELLINGTON: Well, thank you very much.

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