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Bankrupt Health Care
NJ Doctors Shut Doors on Medicaid Patients

While the Medicaid expansion stalls in Florida, New Jersey shows the shortcomings of the Medicaid expansion even when it does take effect. According to NJ.com, New Jersey has the country’s lowest percentage of doctors willing to take new Medicaid patients, with only 38.7 percent saying they took on a new Medicaid patient in 2013, according to a new study. A 2011–12 survey also had New Jersey ranked dead last, as only “46 percent of primary care doctors said they had planned to take on new Medicaid patients.” More:

New Jersey’s Medicaid physician reimbursement rates — among the lowest in the country despite the state’s high cost of living — have long suppressed doctor participation in the program known as NJ FamilyCare.

But the decline from 46 percent to 38 percent participation rate in New Jersey may surprise lawmakers and policy makers, who anticipated President Obama’s health care law would entice more doctor interest. Obamacare raised Medicaid reimbursement rates in 2013 and 2014 to match Medicare rates.

The article notes that the rate increases mandated by the ACA were delayed, so we don’t yet have good data on whether they enticed more New Jersey doctors to open their doors to Medicaid patients. But this story nevertheless highlights the real difference between qualifying for the Medicaid program and being able to see a doctor. According to NJ.com, the national average for doctors who accepted new Medicaid patients in 2013 is 69 percent. That’s far higher than 38.7, but still could leave people who qualify for Medicaid out in the cold.

It’s always important to keep that number in mind when you hear about the Medicaid expansion. And the problem may only get worse, as the 2013 and 2014 increases in rates likely won’t be extended indefinitely. Until the financial incentives for doctors somehow change, there will always be those who are newly qualified for Medicaid but can’t actually get in to see a doctor.

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  • Jacksonian_Libertarian

    Socialism is characterized by over demand, under supply, poor service, and terrible quality, as well as long lines for the limited supply.

    • Andrew Allison

      “Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.” Winston Churchill

    • Corlyss

      But everyone is treated equally badly, except the law makers/reg writers.

      • Andrew Allison

        Exactly. I contemplated appending something along the lines of “All pigs are equal . . .” to the otherwise spot-on Churchill quotation.

  • Kevin

    I assume it is more than just the rates – as I understand it, taking on Medicaid or Medicate patients entangles physicians with a wide range of regulations, and as gov’t cost controls increase this will only get worse.

    • f1b0nacc1

      The reporting requirements alone are staggering. Whenever I listen to silly twits talking about the ‘efficiency’ of public sector vs private sector healthcare, I reflect upon the massive reporting requirements associated with Medicare/Medicaid and compare them to what I see with more conventional private sector insurance.

      • Andrew Allison

        Could you provide some detail as to the differences in reporting requirements for Medicare, Medicaid and the typical private insurance company. I suspect that the overhead for a provider doesn’t differ much between them and that the big difference is reimbursement rates. The reason why NJ (and, I suspect NY and RI) providers are shuting their doors to Medicaid patients is nicely illustrated by the chart at https://donaldhtaylorjr.wordpress.com/2013/03/04/medicaid-v-medicaid-payment-rates/. Why would a provider take on Medicaid patients when the reimbursement is only 40% of that of the already low Medicare reimbursement?

        • f1b0nacc1

          The rule of thumb for most practices (typically 3-5 doctors) these days is that Medicare BY ITSELF requires an extra staff member just for the record-keeping. The main problem isn’t so much extra data as it is endless queries, lost records, requeries, etc. This combined with the huge hassle factor of complying with these often arbitrary demands is a big problem for most practices, more so for the bigger (and more complex) operations. The extremely low quality of the State and Federal ‘crats (as opposed to the organ-donors working for the private companies, who can be fired when they get too awful) is the big driver here.
          There is no question that reimbursement rates are a big problem, but what really kills are the extra costs associated with doing business with Medicare in the first place. Note that a lot of this hassle is what is driving the (very bad, in my opinion) move towards consolidation of practices into medicorps, as they can afford dedicated compliance groups to cope with this mess in the first place.

          • Andrew Allison

            Let me emphasize that I’m not disagreeing, just seeking information. How many staff members does a 3-5 doc practice need for private insurance? Are you perhaps conflating Medicare (with which the States have nothing to do) and Medicaid, where States have considerable involvement. If Medicare is so onerous, why is it that docs are declining Medicaid, not Medicare patients? Is the reason that Medicaid is a disaster for providers (and manna for State employed drones)? It seems to me, as the previously referenced chart illustrates, that if we want to understand the problems, we need to separate Medicare and Medicaid issues. Why should Medicare and Medicaid be different (the jobs it provides for State drones perhaps)? The fact that States can set reimbursement levels, and thereby deprive their residents of access seems unconscionable. If Medicaid can’t be pried away from the States, why shouldn’t providing Medicare reimbursement be a requirement of Federal funding?
            The basic questions to which I’m seeking an answer are: is the Medicare overhead really as onerous as that for Medicaid; and why, given that the service provided are the the same, are their reimbursements different? It appears to me that the answer to the second question may be State involvement (overhead).

          • f1b0nacc1

            Lets start with answering your first question. Depending upon what sort of practice you are running, you have 3-4 admin drones (i.e. full time file clerks) who do NOTHING more than handle records and paperwork for a 3-5 doctor practice. The number can easily go up from there. Remember, these are not nurses who spend part of their time doing record work, they are clerks who MAY (if they are smart, which they usually aren’t) have enough extra bandwidth to handle receptionist tasks as well. That means in practice that every doctor has AT LEAST one admin in terms of support. That is a big cost load to carry. We haven’t taken into account IT support, etc., which for a larger medicorp is taken care of at a higher organization level, but for a smaller practice is simply eaten by the office itself.
            Your point re: Medicare vs Medicaid is really about who handles welfare. Medicare is a government old-age program (yes, I know I am grossly oversimplifying, but that is a crude way of thinking of it) while Medicaid is for the poor (again, hugely oversimplifying). The states own most welfare programs, hence they own Medicaid, though they get quite a bit of federal support. As was made clear in the first of the Supreme Court’s ACA cases, the feds cannot control Medicaid participation by the states, and only condition state behavior at a voluntary level. If you want to alter the way that this is handled, you are going to have to create a new program, or substantially alter the old one (which will require the cooperation of all the participants, not just a diktat from the Executive), something I consider extremely unlikely. This is the nature of Federalism, the states are not simply administrative units of the Federal government, but have substantial (not absolute) sovereignty in and of themselves.
            As for why the way these are handled is different, the answer is pretty straightforward, though not pretty. The elderly (Medicare) are a large group, generally liked by (and who participate as) voters, while the poor (Medicaid) are not. You can love this or hate this, but that is the way it plays out. Everything else flows from that. The feds ‘own’ medicare, so it gets more generous funding, and as a rule, the large bloc of older voters means that nobody is likely to cut it in any real way. The states ‘own’ Medicaid, so it is on a much shorter leash, and gets much less overall support.

          • Andrew Allison

            Thank you. It seems weird that the reimbursement levels as a percentage of those for Medicare vary so widely. Is the answer to the Medicaid access problem perhaps to federalize Medicaid reimbursement levels (why they should be different from Medicare is beyond me)? The fact that the Federal government is providing “means tested” subsidies of 50% to 82% of Medicaid must provide some leverage. Am I right in assuming that the Medicaid reporting requirements also vary widely by State?

          • f1b0nacc1

            The notion of ‘federalizing’ Medicaid is pretty much a non-starter. That might not be a nice thing to say, but it is true enough, and the debacle with Obamacare proved it beyond a shadow of a doubt. Without taking over the program, you aren’t going to be able to change the reimbursement rates, which is a big reason why some states without huge Medicaid populations will decline to go along.
            As for why there are differences in the reimbursement rates, go back to my earlier comment….Medicare is for the ‘deserving’ (i.e. voting) elderly, Medicaid is for the ‘undeserving’ (i.e. not voting) poor. That oversimplifies it a bit, but not too much. There are a whole lot of elderly people out there, and they vote with an almost mechanical regularity…not so for the poor, or are less numerous to begin with, and concentrated in geographic enclaves.
            As for reporting requirements, they do vary widely…they go from awful to merely ridiculous (grin)….

  • FriendlyGoat

    Is it easier to see a doctor on Medicaid than to walk into a medical practice uninsured and explain to the desk person that you need to see a doctor but can’t pay anything today and probably can’t pay anything next month either?

    • Corlyss

      The uninsured go to emergency rooms of publicly funded hospitals. By law such hospitals can’t turn them away. The problem is not now nor has it ever been insurance. It was sold as that for several reasons. Insurance never guaranteed access. The access problem has only gotten worse as doctors see indentured servitude looming straight ahead.

      • FriendlyGoat

        1) Nearly everyone laments the emergency rooms being clogged with primary care which should sensibly be delivered somewhere else.

        2) The majority of people in our country are working in jobs that can be described as “indentured servitude”. Doctors can very well be living the same reality, albeit at a reasonably-expected higher level of pay. They are really not substantially different from a pharmacist working at Walgreen’s, a teacher working in any school, an officer working in the military, or everyone from the bailiffs to the judges in the arena of law.

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