Not enough money to pay the bills…

 The AHA recently shared the information you’ll see below:

Medicaid spending by states grew 16% in fiscal year 2011 and is expected to consume a growing share of state budgets in coming years, according to a new report by the National Governors Association and National Association of State Budget Officers. Medicaid accounted for nearly 24% of state spending in FY 2011, when enrollment in the program grew 5.5%, according to the groups’ latest survey. States expect enrollment to increase by 4.1% in FY 2012 and by an estimated 16 million people beginning in 2014 under the Patient Protection and Affordable Care Act. “With Medicaid costs growing significantly and state revenue collections growing at a much slower pace, states are likely to face tight fiscal conditions for the foreseeable future,” the report states.

It’s probably no surprise to anyone that states still haven’t recovered from the economic downturn and that revenues are not keeping pace with expenditures.  More Medicaid enrollment over the past year shouldn’t be a surprise either because the slow economy has forced people who may have been covered by a private plan through their employer to now rely on Medicaid because they are no longer employed.

If Medicaid spending isn’t scary enough as it is, consider this:  Medicaid reimburses providers significantly below their cost of providing services.  Those organizations that care for a high Medicaid population will find it harder and harder to survive as Medicaid enrollment increases because the reimbursement is below cost.

So what does all this mean?  1) Medicaid reimbursement will need to increase to at least cover the cost of care – I don’t see this happening because as you read earlier states are already strapped for cash.  2) Providers will stop accepting Medicaid and not treat Medicaid beneficiaries – this scenario is already occurring and will continue to increase.  3)  Balance sheets and reserves of organizations who care for a high Medicaid populations will continue to erode to the point that organizations will be forced to close their doors – this scenario is already occurring and will continue to occur at a more rapid pace.

In the end fewer providers will be available to care for a growing population and I believe we are at the tipping point.  Historically access to health care in the United States has been the same regardless of payer class.  If you’re sick our health care system will see you in a reasonable amount of time.  The growing problem with Medicaid and lack of access could result in the rationing of care and more government sponsored health care facilities which will in turn result in decreased quality and access.

We just think we have problems now…

About Craig Thompson

I am a young professional with two great sons, and I work in the healthcare setting. I am employed in hospital administration and serve as Chief Executive Officer at Golden Valley Memorial Healthcare in Clinton, Missouri. At GVMH we care for our families, friends and neighbors. We're committed to providing the safest, friendliest and most compassionate care to all we serve.
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