Over the past two months, several members of the General Assembly have shared policy ideas and opinions in this periodical to implement Medicaid expansion, as approved by voters in a ballot referendum last August. This engagement by elected leaders, representing views across the political spectrum, is essential to the legislative process by providing an open dialogue and the opportunity for a broad spectrum of individuals and groups to participate in the process.
One of the common themes among all those who have opined is the fervent desire to reform the state’s Medicaid program. And those reforms, as evidenced by the opinion pieces, come in many sizes, shapes, and forms. I agree with all the authors that reform of our state’s Medicaid program is long overdue. The question on the table is which reforms serve to move us forward versus those that may harbor unintended consequences.
Over the past decade, the leading sector driving the state’s economy has been health care. In fact, MERIC released in December a new survey, and the health care sector is once again leading and represents a key sector of the current recovery. Reforms that support this sector, propelling them forward to strengthen our state’s economy, would be an important goal during this legislative session. Put another way, Medicaid expansion and payment reform can and should be viewed as another tool in the all-important policy toolbox to help and support the legislature as it continues its pro-growth, pro-economic expansion agenda.
One concern raised in these columns as a justification for reform is the variation in hospital payment in urban versus rural areas of the state. An interesting thought, but when you dig a little deeper, you soon realize it may cascade into some unforeseen disruptions in the health care system.
There are many reasons for this variation, which are borne out in both commercial plans and the federal Medicare program. First, there are payment differentials with wages — urban areas typically pay higher wages. Within the Medicare program, there are more than 300 different wage indexes across the country. This is an accepted and well-documented way to make payments that reflect the cost of care. In addition, adjustments are made for how sick the patient is. This is known as the “acuity” level and adjustments are made for those hospitals that treat patients who are more ill and need intensive treatment. Finally, there are important differentials to support the retention of critical health care specialists and the medical education of our new caregivers. Absent these kinds of adjustments, flattening the payment rate under the guise of reform, as some have suggested, could have serious repercussions in our ability to provide highly specialized, world class care across the entire state.
Finally, we shouldn’t overlook the value we have in Missouri’s health care system. A 2017 Health Care Cost Institute study showed that Missouri has the 8th lowest average hospital prices in the U.S. and 18th lowest in average hospital spending. The reason for this differential: We were 12th highest in the U.S. in hospital utilization. This should be both a cause for celebration and concern. That’s why I was struck by Sen. Lincoln Hough’s commentary where he challenged all of us to think about reform options that would address the need for better care coordination. He zeroed in on how to create incentives to drive better value in our health care system. This contrasts to reform ideas that rely on across the board payment cuts, which spiral the system downward with no policy signal for improvement or innovation. Such bureaucratic actions are always problematic but even more so as we seek to sustain a health care system that has — and will continue — to pull us through the coronavirus pandemic.
Legislating is hard. Finding the time to step back and thoroughly understand and evaluate all options is key for successfully implementing Medicaid expansion. There’s a path forward for Missouri on this issue and long lists of validated and actionable ways to pay for this expansion are available for all to see and debate. Hospitals stand ready to work with all members of the General Assembly to knit together the right policies and programs to help us fulfill the voters mandate while maintaining our strong, vibrant health care system.
Herb Kuhn is the president and CEO of the Missouri Hospital Association.