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Medicaid Rates So Low, Hospitals Consider It Charity Care

Most hospitals have slim margins, and budgets are set based on anticipated average patient reimbursement at Medicare rates. Some private insurers pay higher rates than Medicare, and the differential is often used to offset the cost of treating Medicaid patients. Medicaid reimburses at about half what Medicare pays, which is usually not enough to break even. Out of financial necessity, Medicaid patients are often given limited access to care and services. This is done in some subtle and some not-so-subtle ways. In a recent conversation with an orthopedist friend of mine, he confided in me candidly:

“Some of my colleagues in private practice can’t pay their office overhead if they treat Medicaid patients. So we see poor people with severely arthritic joints left in pain at home. In addition, with bundled payments, the surgeon gets a fixed amount for the patient’s operation and recovery. What incentive is there to send the patient to a rehab facility? It just takes money away from the surgeon. So the poor have to suffer with very long wait times to see someone who will operate on them, and then afterwards they’re on their own for recovery. Patients who go straight home are at higher risk of falling and may have much poorer outcomes. Surgeons get financial incentives for good outcomes, so it becomes a double disincentive to treat Medicaid patients. You don’t get enough for the operation, and you’re likely to get penalized for their poorer outcomes. Some surgeons I know wont touch a patient with Medicaid for any elective procedure. I have ethical problems with that – so I work at a non-profit hospital where we treat everyone. But I have to do higher volume to break even. I work 90 hours a week and barely see my family. I don’t know how much longer I can do it.”

It is common practice among nursing homes to have a limited number of “Medicaid beds.” The facility simply declines to admit more than 20% of patients with Medicaid. I hear case managers on the phone all day long, looking for a post-acute care facility who will accept a Medicaid patient. For the few non-profit facilities who don’t turn them away, deep financial costs are incurred as they struggle for survival.

The reality is that Medicaid rates are so low that having this insurance is not much better than none at all. As I’ve explained previously in the outpatient world (see an example of an insanely low Medicaid reimbursement for eye care), Medicaid is tantamount to charity care. The news that 21.3 million Americans might receive Medicaid coverage in the next decade should not be hailed as a leap forward. As I see it, that’s just a larger group of people with debilitating arthritis who can’t get hip and knee replacements and are left to suffer in pain at home.

Many Are Not Getting The Preventive Care They’re Entitled To

Who doesn’t think preventive health care is important?  Probably nobody if you ask this question abstractly.   But when it comes to getting it–well that’s a different matter.  Medicare stats show that too few people are getting preventive services even when they are free.  It’s darn difficult, it seems, to get people to take good care of themselves.

By mid-November, of the four million or so new beneficiaries who signed up for Medicare this year, only 3.6 percent had had their “Welcome to Medicare” exam.  Only 1.7 million of the more than 40 million seniors, most of whom were already on Medicare, had had their “Annual Wellness Visit.” A poor showing indeed given all the hoopla and hype surrounding the preventive benefits that health reform was supposed to bring to seniors.

To review:  All new Medicare beneficiaries are entitled to a free physical exam within the first twelve months that their medical, or Part B, coverage becomes effective.  It’s a one-time benefit, and Medicare says that seniors are told about the benefit when they sign up.   A Medicare spokesperson added that Read more »

*This blog post was originally published at Prepared Patient Forum: What It Takes Blog*

Should Medicare Focus On Long-Term Care?

“HERE is the dirty little secret of health care in America for the elderly, the one group we all assume has universal coverage thanks to the 1965 Medicare law: what Medicare paid for then is no longer what recipients need or want today.”

So argues New York Times reporter Jane Gross in a provocative op-ed in last Sunday’s New York Times. She makes the case that too much of Medicare is going to medical treatments and drugs of little value to the elderly, and nearly nothing on long-term care, citing the case of her own family’s experience:

“In the case of my mother, who died at 88 in 2003, room and board in various assisted living communities, at $2,000 to $3,500 a month for seven years, was not paid for by Medicare. Yet neurosurgery, I later learned was not expected to be effective in her case, was fully reimbursed, along with two weeks of in-patient care. Her stay of two years at a nursing home, at $14,000 a month (yes, $14,000) was also not paid for by Medicare. Nor were Read more »

*This blog post was originally published at The ACP Advocate Blog by Bob Doherty*

Even With Health Care Reform, Many Will Still Encounter Problems

Trudy LiebermanA couple weeks ago I walked the streets of Lincoln, Nebraska, talking to men and women about whether they thought Washington was listening to their economic concerns.  Jeff Melichar manages his family’s Phillips 66 gas station on the city’s main street, and one of his big financial problems happens to be health insurance.  The more we talked, the more I realized what a jam he could be in down the road because of a loophole in the health reform law, which has received almost no press coverage or public discussion: If you have health insurance from your employer, you may have to keep it whether or not it’s adequate or affordable.  Buying less expensive or better coverage from one of the state “exchanges” or shopping services will be off limits.  So despite all that talk about consumer choice, for many like the Melichars, there may be no choice.

Melichar’s wife is eligible for health insurance from the optical company where she works.   But the family waited until this fall to enroll when the firm offered coverage they finally could afford.  Their premium is Read more »

*This blog post was originally published at Prepared Patient Forum: What It Takes Blog*

Health Insurance Coverage And Leaving The Hospital Against Medical Advice

There is a huge myth being unknowingly  perpetrated against the general public when it comes to their rights and responsibilities as a patient.  It’s a myth that I can remember hearing as far back as my first few weeks of clinicals during medical school.  It was a constant presence during my residency training and even now, as a private practice hospitalist I hear misinformation being handed down day after day, month after month.

This myth is perpetrated by doctors, nurses, and therapists of all kinds.  What is this myth?  That their health insurance company will not pay for the care provided if they want to leave against the medical advice of their physician.

Will my insurance company pay if I leave against medical advice (AMA)? Yes.  They will pay.  Medicare and Medicaid pay for services that are medically necessary.  For example, if you go to the ER and the doctor recommends a CT scan of your chest and you decline, this does not mean the insurance company will deny payment for your visit to the emergency room.  This is what  the informed consent process is for.  If you have been admitted for a medical condition that requires hospitalization and your care plan meets Medicare medical necessity muster, your care will be paid for whether you leave the hospital when your physician believes it is safe or not.   Read more »

*This blog post was originally published at The Happy Hospitalist*

Latest Interviews

IDEA Labs: Medical Students Take The Lead In Healthcare Innovation

It’s no secret that doctors are disappointed with the way that the U.S. healthcare system is evolving. Most feel helpless about improving their work conditions or solving technical problems in patient care. Fortunately one young medical student was undeterred by the mountain of disappointment carried by his senior clinician mentors…

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How To Be A Successful Patient: Young Doctors Offer Some Advice

I am proud to be a part of the American Resident Project an initiative that promotes the writing of medical students residents and new physicians as they explore ideas for transforming American health care delivery. I recently had the opportunity to interview three of the writing fellows about how to…

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Latest Book Reviews

Book Review: Is Empathy Learned By Faking It Till It’s Real?

I m often asked to do book reviews on my blog and I rarely agree to them. This is because it takes me a long time to read a book and then if I don t enjoy it I figure the author would rather me remain silent than publish my…

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The Spirit Of The Place: Samuel Shem’s New Book May Depress You

When I was in medical school I read Samuel Shem s House Of God as a right of passage. At the time I found it to be a cynical yet eerily accurate portrayal of the underbelly of academic medicine. I gained comfort from its gallows humor and it made me…

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Eat To Save Your Life: Another Half-True Diet Book

I am hesitant to review diet books because they are so often a tangled mess of fact and fiction. Teasing out their truth from falsehood is about as exhausting as delousing a long-haired elementary school student. However after being approached by the authors’ PR agency with the promise of a…

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