Hospitals should play political hardball to get Medicaid expanded

Despite the media attention it has received, the difficulties launching represent a matter collateral to the future of the Affordable Care Act. Ditto for the health insurance policy cancellations. Whether or not the website functions, whether or not tweaks are made to the individual mandate or other components of the ACA, there are still nearly 50 million people in this country who lack health insurance, many just a single stroke of bad luck away from penury.

That inconvenient fact is not going away. And for the moment, neither are many of the anti-ACA members of Congress who made sure and other aspects of the ACA didn't receive the dollars needed to ensure a smooth rollout. Few of my media colleagues have seen fit to mention that in their hand-wringing coverage of the website woes.

For now, the media should focus on what has been the most underreported story on the ACA to date: The stunning enrollment of at least 1.5 million Americans into the expanded Medicaid program. That's a huge number, thanks in part by hospitals, whose leaders spearheaded aggressive signup efforts because it was to their institution's financial advantage to do so.

A parallel issue drawing media attention is the healthcare caste system being created by those states that have refused to expand Medicaid, often for specious and even circular reasons. Over the weekend, the New York Times put this issue under the spotlight. It focused on the hospitals in Georgia that not only will have to continue to treat hundreds of thousands of poor residents who would get insurance coverage if they lived just 400 miles away in Arkansas (which is expanding Medicaid), but doing so with tens of millions of dollars a year less in revenue.

The article included an interview with an official from Grady Health, the state's biggest safety provider that is now staring down a $50 million cut in disproportionate share hospital payment (DSH) funding next year that won't be replaced with additional Medicaid funds. Grady's official take: It was great when the ACA went into law, but the U.S. Supreme Court's decision last year to make Medicaid expansion optional has backfired.

"I understand that the state needs to balance its budget, and control the runaway costs of Medicaid, but to turn a blind eye and say, 'Let the chips fall where they may,' you'll end up with a gutted healthcare system," Maggie M. Gill, chief executive at Memorial Health in Savannah, told the Times.

The article referred to the Georgia Hospital Association (GHA) as "politically powerful," but if that were the case, the statehouse would still at least be debating Medicaid expansion. Instead, it's a non-starter. Indeed, the GHA only recently began making its support of expansion public.

Hospitals in Georgia and many other states put themselves into a doubly-deep trench over Medicaid expansion. Their lobbies allowed debate on the issue to first be shaped in political rather than public health terms, and then didn't adapt to that reality.

Hospitals not only needed to tout the economic advantages of expansion--which few have done--but also needed to support sympathetic candidates in primary runs against Medicaid's fiercest opponents. It's a noxious job far from the mission of safety net hospitals, but in this Citizens United era, it's how public policy is shaped these days. Grady Health could have locked up every critical vote in the Georgia legislature by spending a fraction of the $50 million it stands to lose next year.

However, the ugliness of hospitals playing political hardball recedes somewhat when you delve into the rationales politicians in states such as Georgia pose for not expanding Medicaid.

The primary argument is that it would cost the states money they don't have, even though it's completely paid for by the federal government for the first three years--presumably more than enough time for their lawmakers to figure out how to finance that onerous 10 percent of the expansion cost they would have to shoulder after 2016.

When that fact is brought up, the secondary argument contains fears that funding would eventually be cut on the federal end. Not by the current administration, mind you, but by some future group that presumably views Medicaid as a shameless handout and plans to slash it.

In other words, politicians such as themselves.

That's the circular thinking I mentioned before. And given in this context it represents fear of one's own darkest impulses, all these politicians have to do to ensure a smooth expansion of Medicaid is not run for higher office. Hospitals should further explore their role in such a mission. - Ron (@FierceHealth)

Related Articles:
Why did Medicaid enrollment soar?
Two states with hospitals facing huge DSH cuts
GA hospitals push to expand Medicaid


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