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David Ray 
Member since Feb 6, 2013


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Re: “Medicaid cost growth down dramatically — is reform effort the cause?

Thanks for your reply and agree they were cautious about it.

I certainly have no opposition to trying something different. But the reality is that when government (state or local) is controlling prices in half the health care economy, you're going to cause convolutions in the markets that drive prices for everyone else higher.

The point is that a dollar saved by Medicaid is just transferred (AKA as "cost-shifted") to the private half of the economy, or a corresponding decline in services will occur in the government half. There really isn't any way around this fundamental fact.

Tinkering with payment arrangements to gain efficiency is a good thing; but it must be recognized for what it is -- working around the margins of the core problem which is a government run program doing its best with what it has to work with. Until we come to our senses as a nation and privatize both Medicare and Medicaid, we will continue to see costs spiral out of control unless the quality of services are cut for government beneficiaries (this is already happening in many physicians offices, where fine medical professionals, but still lesser qualified ones, are seeing patients instead of physicians).

Posted by David Ray on 02/07/2013 at 11:02 AM

Re: “Medicaid cost growth down dramatically — is reform effort the cause?

Perhaps the restructuring is responsible, perhaps not. But even if it is it would be premature to declare it a victory. It takes some time for providers to recognize that they are losing money on Medicaid patients and simply choose to quit seeing them -- which many providers have already done.

And it takes even longer to recognize the effect of the cost-shift to private insurance, which drives up the premiums of those who buy their own coverage. We often conveniently ignore this factor, but the government price controls of Medicare and Medicaid are the principle reason insurance costs spiral higher. It often takes a year or two for these consequences to be seen.

Simply put, there is no free lunch. While Medicaid administrators may see one, what they do not see is the effect on the overall health care system of cutting reimbursements to providers. In the end that means lower quality care, higher premiums to those who pay their own ways, or both.

1 like, 5 dislikes
Posted by David Ray on 02/06/2013 at 11:27 PM

 

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