Should states agree to expand the provision of Medicaid, given that it is the hospitals that will pay the price for the money losing proposition of increased access to health coverage for those who cannot otherwise afford it? This question has major implications for the financial sustainability of healthcare and its systems, however the response may be to formulate a better question.
The American Hospital Association(AHA) (2012) presented its position, describing that the costs of care are below the rates set in law for the treatment of Medicare and Medicaid patients, and that non-for-profit hospitals have a legal requirement to accept such patients as a condition of tax exemption. Further, they described that 58% of all patients seen by hospitals were Medicare and Medicaid patients (AHA, 2012). While the AHA presents this as a problem of rates which fall below that of the negotiated rates paid by insurers, perhaps it is the rates paid by the hospitals which warrant closer examination. The main problem of the financial sustainability of hospitals is not underpayment by Medicare and Medicaid, but rather an overvaluation of the subpar services and systems which the American healthcare system provides. Forbes considered US healthcare to have the highest costs and the poorest results of all developed nations (Munro, 2014). Extending this healthcare, which has a high cost and low value in terms of health improvement is not the answer, but that does not mean that the programs should not be expanded- it means that the program should target a different set of targets and services.
Apart from the hospitals, it is the state that pays whether Medicare and Medicaid are expanded or whether it is not. Either the state pays for the expanded nature of the program, or it loses federal funding and must still pay for the treatment of its uninsured residents in one form or another (Baron, 2013). There are more important questions to be asked, and better solutions, than simply expanding the existing system.
When population health is viewed only as a series of transactions and costs it is easy to lose sight of the real costs of an unhealthy population. Unhealthy people are not as productive as healthy people, and they are unable to make a full contribution to the economy or economic growth. Poor health compounds health issues, as it can impact income and quality of life, and this is particularly relevant when it is the head of household who is suffering from poor health as it is a predictor of the health status of the rest of the family. Of course, it can be argued that persons on Medicaid and Medicare were not contributing much to the economy in the first place, hence their eligibility for the program, and this leads me to my next point- it makes more economic and financial sense to deal first with the social determinants of health, as these have positive impacts not only by preventing problems leading to chronic or expensive healthcare issues, but they increase standard of living and quality of life by ensuring access to opportunities in the form of education, employment, recreation and contribution to a better community (Braveman & Gottlieb, 2014). Improving social determinants of health is the missing component of programs such as Medicare and Medicaid, and it to the extent that such programs should be expanded, this is where new resources should be allocated.
The expansion of existing Medicaid services must be supplemented and complemented by a comprehensive program which improves social determinants of health, and this should be the focus of discussion, rather than how much more funding is needed to supply a dysfunctional system which does not provide value to the American people who ultimately pay the costs of a dysfunctional system with their paychecks, tax dollars and their health.