This week the US House passed a budget bill that proposes to fundamentally alter both Medicare and Medicaid — turning Medicare into a voucher program for everyone under age 55, and gutting Medicaid and CHIP. The budget bill, proposed by Wisconsin Rep. Paul Ryan, would cut Medicaid by $771 billion and eliminate CHIP in 2013.
The turmoil surrounding Medicaid relates to an interesting book I’m reading called Blind Spots: Why We Fail to Do What’s Right and What to Do About It. It talks about why we have so many ethical failings in the business world — things like Bernie Madoff, Enron. The authors contend that executives turn ethical decisions into business decisions, and justify them on business grounds. “The typical ethical dilemma tends to be viewed as an engineering, marketing or financial problem, even when the ethical relevance is obvious to other groups.” For example, it recalls the space shuttle Challenger disaster in which a vendor made a “management” decision that ignored the lives that were at stake.
I would contend we’re on the brink of another Challenger disaster when it comes to funding programs for our children’s health. The business decision is to cut spending, rather than raise revenue or cut tax deductions. Yet, we really should be thinking about whether this is an ethical decision. I see three blind spots in the decision-making process.
Blind Spot #1. Nearly the same week as most of Texas’ representatives voted in favor of this bill that guts federal funding for Medicaid and CHIP, their home state released an RFP to spend $10 billion on private health plans to manage the care of adults and children in Medicaid. Does the right hand know what the left hand is doing? I guess they’re both right hands in this case, but why would you cut off a third of spending to your own state at the same time it’s committing to future contracts? Click here to see how Texas representatives voted on Ryan’s bill.
Blind Spot #2. Ryan’s budget proposal argues that Medicaid needs reform because the program currently provides “below-market reimbursement rates” to doctors that leave “beneficiaries with fewer provider choices and reduced access to care.” Yet, Ryan’s bill would cut about $5 billion a year in federal funding to Texas Medicaid. So, providers, forget about that 10% cut in payments. Your pay just got cut by one-third. How is cutting funding going to make Medicaid a better payer for physicians? Click CPPP Ryan Budget to read more about the bill would affect Texas.
Blind Spot #3 While the Ryan budget slashes both Medicaid and CHIP, it simultaneously proposes a $1.8 trillion reduction in revenue through additional tax cuts to corporations and the wealthiest Americans. How are these tax cuts going to help children of working parents get health insurance? I don’t really understand the connection here. Is there a reasoning that corporations that get tax breaks are more likely to pay for dependent coverage? There’s no research to indicate this. Nowhere to click!
Some congressional reps will be having town halls in the coming weeks. Tell them how you feel. Click medicaid cuts and children for talking points.
Quote of the week:
“Medicaid has many problems, low reimbursement rates being arguably the most serious. If Medicaid’s critics were seeking to raise its reimbursement rates and increase spending on the program, we would join their chorus. But they are using the invalid argument that Medicaid coverage is worse than no coverage at all to support proposals to cut back the program. Such an attack further damages this highly challenged program by undermining the political case for additional resources.” — Princeton economist Uwe Reinhardt in the New England Journal of Medicine.
