Fixing Medicaid

On a hot August day I was approached by John, from Pierce County, who gave me a handwritten note. In it he shared the story of how BadgerCare saved his wife’s life. A dairy farmer, John could not afford health insurance with dairy prices well below costs. He was grateful for the program that brought his wife and new baby home safe.

BadgerCare, a part of the Medicaid Program, is a Wisconsin success story. BadgerCare has grown quickly and currently covers over 775,000 people. More than one in five Wisconsin citizens access health care through Medicaid but it comes at a cost.  From nursing home care, services for the disabled and BadgerCare, state taxpayers spent $6.7 billion last year for Medicaid.

Nationwide Medicaid grew almost 9% last year, the largest increase in the past eight years. Wisconsin expenses grew by almost a billion dollars or 20% in 2009.

As the program grows faster than state revenue, Medicaid is taking up a larger portion of the state budget. One in five dollars in Wisconsin’s budget goes for Medicaid.

With so many people depending on Medicaid and so much of the state budget dedicated to health services it is imperative we get Medicaid right.

Fixing Medicaid for me has been a multi-year project. During the previous budget I wrote a paper detailing two dozen suggestions that would save tens of millions of dollars in Medicaid. One suggestion was a comprehensive audit of the program.

I worked with the Legislative Audit Bureau to draft a plan for the audit and solicited help from my colleagues but was unable to get a majority to agree. Last Wednesday, the Audit Committee discussed that same Medicaid audit plan and it passed unanimously.

People ask me “will Medicaid disappear” under health care reform. The answer is no. In fact the federal government will rely even more on Medicaid to provide health care to low-income individuals and families.

While the country grapples with adding new people to Medicaid, Wisconsin already expanded the program to all children and recently to those who do not have children. But the costs are straining the state budget.

Creating a sustainable Medicaid program requires cost saving measures we have known for decades will work. For example, just like John’s wife, the most common reason a Medicaid patient enters the hospital is to have a baby. But pregnancy complications are much higher among Medicaid patients than the general public.

We know pre-natal care coordination helps keep moms and babies healthy. Troubled pregnancies often result in birth by C-section.  Lowering the C-section rate would save nearly $15 million in the next budget.

As Wisconsin struggles with a difficult budget there will be much discussion of what to do with rising health costs. Options are limited. Seventy-percent of Medicaid dollars come from the federal government.  Those dollars have strings attached. Wisconsin cannot simply change Medicaid benefits or kick people off of Badgercare by changing eligibility.

Other states balanced their books by delaying payment of Medicaid bills. But this also has consequences. Small hospitals and doctors may not continue to serve Medicaid patients if their bills are not paid - making it harder to find care.

Dramatic changes are difficult in a program that provides a lifeline to one in five people in this state. Part of the answer is providing an affordable alternative in the private sector for small businesses and their employees. Affordable coverage can be achieved through my proposal for the Small Business Health Options Program that would give small businesses and self-employed people the same bulk buying power large companies enjoy.

Another part of the answer is efficient operations in the multibillion dollar Medicaid program.

I hope the audit approved this week will show us how we can more efficiently and effectively provide care to our most needy families in a way that is fiscally responsible and sustainable long term.  Finding solutions is multifaceted and best arrived at by a dispassionate evaluation of the facts, something for which our Legislative Audit Bureau is nationally known.