Reforming Medicaid must be a priority next year
There is a fundamental health care question that every candidate for office, whether at the state or federal level, should answer this fall: How are we going to address growing Medicaid challenges that threaten state budgets and increasingly leaves gaps in care for vulnerable families?
Medicaid, the health care program that treats 53 million Americans, is in need of fundamental and comprehensive reform to ensure that it meets the very different needs of very different populations it serves, including poor and uninsured children, people with disabilities and the elderly.
Medicaid has not been significantly updated since its creation in the mid-1960s. Like many relics of that era, Medicaid has become increasingly inefficient, prone to fraud and abuse, and out of step with advancements in modern health care.
Past attempts at reform have been mostly ineffective, largely due to lack of political will and entrenched interest groups. There simply hasn’t been the commitment to trying new and better ways of administering the program as a whole. Therefore, too many efforts have forced cashstrapped states to limit services without improving care.
The financial challenge is real. Simply saying “spend more money” isn’t going to get it done. Medicaid will cost taxpayers nearly $5 trillion over the next 10 years. That is why we have a vested interest in making sure this program is as strong as possible. Already, Medicaid exceeds more than 20 percent of state appropriations in half of the states, and those numbers will only grow in the coming decade – forcing governors and state legislatures to raise taxes, reduce benefits or make painful choices about limiting other state services to pay for Medicaid.
This summer, I convened summits nationwide with Medicaid experts, health advocates and government leaders to develop a roadmap for the future of the Medicaid program. Those efforts have led to a report entitled, Medicaid Makeover: Four Challenges and Potential Solutions on the Road to Reform. The report lays out the four central problems plaguing Medicaid and what policymakers must do to confront these challenges:
First, Medicaid does not adequately meet the health care needs of the diverse populations served by the program. We must realign responsibility for Medicaid so that the federal government assumes a larger role in planning, delivering and paying for services for the elderly while allowing the states to take on greater responsibility for those under 65.
Second, Payment structures and technologies are outdated. States must be encouraged to recognize and reward high-quality care and improved outcomes and to deploy health information technologies. How badly is advanced health IT needed in health care? In August, the Institutes of Medicine (IOM) issued a report that found that at least 1.5 million Americans are sickened, injured or killed each year by medication errors. In other words, the wrong patients are getting the wrong drugs in the wrong dosages at the wrong time. The IOM estimates the extra expense for treating illnesses caused by medication errors to be at least $3.5 billion. Medicaid programs can be leaders in this field.
Third, Medicaid must do more to address the problem of the uninsured. States must be encouraged to expand Medicaid coverage to lessen the strain on our health care safety net.
Fourth, Medicaid does not efficiently encourage individuals to play an active role. We must identify and overcome barriers so individuals can take control of their own health.
To expand on this last point, Medicaid Makeover calls for shifting emphasis from treating sickness to managing wellness. Individuals should be empowered to take charge of their own health – an absolutely necessary component of any health reforms.
In Medicaid and through the health care system, the first and best way to reduce health care costs – and improve people’s health – is to keep them from getting sick in the first place. As a matter of economic, health and personal policy, we must do all that we can to promote the cause of prevention – living healthier lifestyles by eating right, exercising more and stopping smoking.
What does this mean for the health care system? Just look at the facts:
• Obesity costs the American economy $117 billion a year.
• About 75 percent of our health care dollars are spent treating chronic diseases such as heart disease, cancer, and diabetes. And $75 billion of that treats obesity alone.
• These chronic illnesses – many of which can be prevented by healthy lifestyles – cause seven out of every 10 deaths.
In Medicaid and through the health care system, the first and best way to reduce health care costs – and improve people’s health – is to keep them from getting sick in the first place.
These preventive health issues – as well as the other three noted earlier – are severely impacting Medicaid. Addressing these fundamental challenges is key to redesigning Medicaid. We also must stop looking at the old model that worked in 1965 but is now clearly and painfully outmoded and instead figure what works best in 2006 and beyond. We must identify the best way to bring quality health care to those in need and not hide behind an antiquated system. Innovation needs to be encouraged and more importantly rewarded.
When I was governor of Wisconsin and overhauled an outmoded welfare system, many told me it couldn’t be done. I didn’t listen to them. Instead, I listened to welfare mothers and found out how government could help them get back to work. With the help of many others, we achieved our goal.
I am confident that we can succeed again with making over Medicaid – if Governors, Members of Congress and state lawmakers make it a priority this election season and throughout their terms in office.
Tommy G. Thompson served as Secretary of Health and Human Services from 2001-2005. Previously, he served as Governor of Wisconsin from 1987-2001. He is currently a partner at Akin, Gump, Strauss, Hauer and Feld LLC.