This is a recent opinion from Brian Balfour of Raleigh’s Civitas Institute. My response follows.
From Raleigh News and Observer Saturday December 28, 2014
Last week, yet another study claiming that expanding Medicaid in North Carolina would create tens of thousands of jobs was released and dutifully reported by the media. The findings of such studies, however, are based upon a fatally flawed assumption that Medicaid coverage equates to access to medical care.
The latest report, produced by George Washington University researchers, declares that North Carolina will miss out on 43,000 jobs in the next five years, along with $21 billion in federal money, if it continues to refuse Medicaid expansion as prescribed in Obamacare. The study’s findings largely echo other recent reports, such as a January study produced by the North Carolina Institute of Medicine that came to similar conclusions.
The job growth claims are based on the state’s “drawing down” additional federal funds due to Medicaid expansion. As the GWU report describes, “Since most of the cost of a Medicaid expansion would be borne by the federal government, expansion would result in billions of dollars in additional federal funding flowing into North Carolina. These funds will initially be paid to health care providers, such as hospitals, clinics or pharmacies, as health care payments for Medicaid services.”
This income received by health care providers is then spent on suppliers (such as medicine, medical supplies) and in their community on goods and services such as groceries, clothes and movies.
The fatal flaw in this methodology, however, is that in order to “draw down” federal Medicaid dollars, actual medical services need to be provided to Medicaid patients. It is only when doctors actually treat Medicaid patients that the federal government pays those providers for the services.
For instance, the NCIOM study assumes that more than 500,000 North Carolinians will not only enroll in Medicaid under expansion, but each would receive on average roughly $4,300 in medical services each year. As these services are rendered, the doctors and hospitals are paid by the federal Medicaid program, which injects the money into the state’s economy and spurs the job creation, according to the studies.
But here’s where the studies’ jobs claims fall apart: North Carolina already suffers from a shortage of doctors.
According to federal guidelines, 78 counties in North Carolina qualify as Health Professional Shortage Areas because of shortages of primary medical care doctors. And the problem is getting worse. According to the Shep’s Center for Health Services Research at UNC-Chapel Hill, North Carolina’s supply of primary care physicians is dwindling, dropping from 9.4 per 10,000 people in 2010 to 7.9 doctors per 10,000 people in 2011.
Indeed, a 2011 survey by the Association of American Medical Colleges found that only 15 states have fewer primary care physicians per capita than North Carolina. The doctor shortage is especially pronounced in the state’s rural areas, where there is a greater concentration of Medicaid enrollees as a share of the population.
And more to the point, not only is there a general doctor shortage in North Carolina, there is a shortage of doctors accepting Medicaid patients.
Medicaid roles in North Carolina have ballooned from about 1 million in 2003 to roughly 1.7 million today. Adding another 500,000 would push the program over 2 million enrollees and mark more than a million new Medicaid patients in a dozen years.
All this would take place when the number of physicians accepting Medicaid patients is dwindling.
Imagine adding since 2003 the equivalent of the entire population of Wake County to a group of people fighting over a shrinking pool of doctors. Making matters worse, a 2012 article in Health Affairs found that one-fourth of North Carolina’s physicians will not take any new Medicaid patients.
In short, there simply is not nearly enough doctors to meet the demand, and things could get worse.
As reported recently by WRAL, “A survey this year by The Physicians Foundation found that 81 percent of doctors describe themselves as either over-extended or at full capacity, and 44 percent said they planned to cut back on the number of patients they see, retire, work part-time or close their practice to new patients.”
Such extreme supply constraints tells us that if North Carolina were to expand Medicaid, the newly enrolled would have great difficulty actually seeing a doctor. Coverage will not equal access.
If new enrollees in the already overcrowded Medicaid program don’t have access to care, then there won’t be any services provided. With no services provided, no federal dollars are “drawn down” to Medicaid providers. The whole premise behind the studies purporting to show job creation is unsupportable.
Brian Balfour is policy director of the Civitas Institute in Raleigh.
Read more here: http://www.newsobserver.com/2014/12/26/4427841/why-medicaid-expansion-wont-boost.html?sp=/99/108/#storylink=cpy
Untangled Health’s Response
Jeffrey Harris · Consultant Community Medical Home Implementation: PCPCC Co-Chair e-Health Group; Director Diabetes Eyesight Preservation Program Taylor Retina Center
I am writing In response to Brian Balfour’ opinion on the relationship between expanding Medicaid in NC and job growth on Saturday December 28, 2014.
The man standing next to me in Church in Four Oaks NC in 2011 said; “you must have sugar”; as he observed me checking my blood with a finger stick. “Sure do brother I said, since the age of 10, this is my 44th year with diabetes, I assume you have the disease also.” “Sure do, runs in my family: I am scheduled to have several toes amputated next week.” I could not help but notice the soft cast and bandage on his leg and told him I was sorry that he had to be the victim of such an avoidable circumstance. “Avoidable?” he said; this happens to everyone in my family; we all assume it is par for the course.”
These are the people who would receive coverage under Medicaid expansion should NC decide to follow the recommendation of the Federal Government under the Affordable Care Act. In fact, more than 400,000 of these people who are presently uninsured would have a source of payment for Medical Care. I know them well as I was one and if not for the generosity of friends would have gone without insulin on several occasions in my life.
On Saturday, Brian Balfour, policy director of the Civitas Institute in Raleigh demonstrated a common misunderstanding of health economics. He states NC will not expand Jobs through accepting Federal Medicaid expansion money because we historically have underserved areas with few physicians who cannot expand their caseloads. I guess this means that in a free market society if a geographical area in need of services receives funding and resources to increase their supply of services that the suppliers of such services (Community Clinics, Medical Schools) will not increase the capacity of the delivery system?
Mr. Balfour further fails to recognize that these patients are already receiving treatment often for free in local emergency departments, further inflating the cost of healthcare to the insured.
By the way, Mr. Balfour fails to recognize that North Carolina wrote the book on how to provide Medicaid coordinated care through a Primary Care Medical home which has served as the ‘how-to’ guide for numerous other states (Community Care of NC).
Let’s see: Where Mr. Balfour is correct with regard to our need to expand the number of primary care physicians we have multiple mechanisms in place through ACA that are making the profession of primary care medicine much more attractive. I point the reader to one of many publications demonstrating the return on investment for engaging individuals in patient centered primary care Profiles in interprofessional health training. Since President Bush called for the adoption of electronic health record technology we are now well passed the early adopter stage of connected information systems that allow us to find large segments of our population that require access to specialty care thereby prospectively catching the crisis before it occurs and saving all stakeholders time and money; but more importantly mitigating the risk for the permanent suffering that arises from poorly managed chronic disease. Telemedicine is now a recognized intervention and carries a reasonable fee for patients and doctors to feel as though they receive a fair exchange in value (wellness for the patient and salary’s for the doctor’s practice). One thing any student of economics learns is that investments in technology and advancements in process favor a positive shift in the supply demand curve and its derivative…productivity. Let me recap: New tech, new care coordinating jobs, new analysts’ jobs = MORE JOBS!
In my work I spend a great deal of time assisting the public with the interpretation of so-called facts and opinions arising through think-tanks and praised by the media. I am confident in my judgment that NC Medicaid should expand in accordance with ACA policy. So are the Vice President of the IBM Global Health Initiative, our Governor and every other well versed healthcare economist regardless of political party affiliation. I suggest you do some of your own reading (reports vs opinions like mine). Good luck to my 400000 friends that are deprived of fair health care services when they are ill.
One more thing:
Physicians are willing to treat Medicaid patients. I spend my time looking for specialty care. And have located retina surgeons willing to treat diabetics regardless of funding: Simply to preserve eyesight.
Consulting Program Manager Taylor Retinal Center
Co-Chair Patient Centered Primary Care Collaborative Washington DC