Shopping for Medicaid Savings? Leave Some Items on the Shelf

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Commentary — August 2017

Tex Med. 2017;113(8):11-13. 

By Lawrence O’Brien, MD

The Texas Medicine feature article, “Change Around the Block,” which looked at block-granting Medicaid (April 2017, pages 20–27), provided a lot of food for thought, in keeping with the shopping basket analogy used by Edinburg internist Linda Villarreal, MD. Glaringly missing, however, was any discussion about reducing costs, deciding priorities on spending, or eliminating fraud, waste, and abuse. 

There are so many issues that could be discussed under this topic that any article will come up short on specifics. But I am going to try to cover a few. With Dr. Villarreal’s shopping cart analogy, we can simultaneously fix health care cost constraints overall and the obesity epidemic. 

So what’s in our shopping basket that could be taken out? Generic or preferred drugs versus brand-name drugs is an easy one. I believe all physicians understand that using generic medications over the latest and greatest brand-name medications saves the system money — $1.2 trillion for the 10-year period 2003-12, according to a study by the Generic Pharmaceutical Association. 

Generic prescribing rates have increased in recent years, but we still see prescriptions for Celebrex when no formulary nonsteroidal anti-inflammatory drug has been tried, prescriptions for Enbrel when methotrexate has not been tried, and prescriptions for Dulera when an inhaled corticosteroid alone has not been given a chance. So, take these out of the shopping basket, put them on the shelf, and use the store brand right next to it. 

Let’s now turn to genetic testing. Whole genome sequencing has not been shown to be beneficial, is considered experimental and investigational, and is very costly. So, take this out of the shopping basket for now. Maybe sometime in the future it will prove useful. 

Any check of the current Choosing Wisely campaign lists of testing not to perform can turn up savings on a daily basis. For example, recommendations from the American College of Cardiology include:  

  • Don't perform stress cardiac imaging or advanced noninvasive imaging in the initial evaluation of patients without cardiac symptoms unless high risk markers are present;
  • Don't perform echocardiography as routine follow-up for mild, asymptomatic native valve disease in adult patients with no change in signs or symptoms; and
  • Don't perform routine electrocardiography screening as part of preoperative or pre-procedural evaluations for asymptomatic patients with low perioperative risk for death or myocardial infarction. 

How many of our colleagues are paying attention to these recommendations? What does not following these guidelines cost the system, including Medicaid? Let’s take these out of the shopping basket, or at least put them in the pantry and serve them up only when needed.

Other areas for costs savings? There are many, including copays for emergency department visits for Medicaid recipients to generate revenue and decrease unnecessary visits, curbing abuse of pediatric therapy in Texas (my estimate is $3 billion is wasted on pediatric therapy over a 10-year period), short hospital stays that should be billed as observation stays instead of full DRG (diagnosis-related group) admissions, ongoing abuse of durable medical equipment, and home health visits.

Hard questions will need to be discussed and brought to the table. How long will we continue to pay for expensive transplants for the few when so many are in need? According to the Milliman report 2014 U.S. Organ and Tissue Transplant Cost Estimates and Discussion, billed charges for a heart transplant total about $1.2 million. Using 2014 U.S. Department of Agriculture data, it is evident that the same amount can feed a family of four for 80 years using the most liberal plan. Liver transplants at current billed charges of $739,100 could buy a year’s worth of health insurance under the exchange for 723 families of four. If you want to keep strictly to medical procedures, a single heart transplant would cover the billed charges for 110 deliveries in Dallas. 

Also consider the exorbitant price tag for end-of-life care. According to a Kaiser Family Foundation survey, “9 in 10 adults (89 percent) say doctors should discuss end-of-life care issues with their patients, yet only 17 percent of adults say they have had such a discussion with their doctor or health care provider. Among adults ages 65 and older, the share is somewhat higher (27 percent).” 

One of the problems of the Affordable Care Act was described as “The Impossible Trinity of ObamaCare” by Michael S. Bernstam, a research fellow at the Hoover Institution, Stanford University, in an article published on in 2013.

Mr. Bernstam argues that a health care system can be many things for many people, but it cannot simultaneously be universal, comprehensive, and affordable.

“If it is universal and comprehensive, it is prohibitively expensive and hence unaffordable,” Mr. Bernstam says. “The only way to make it universal and affordable is to ration services, but then the system is not comprehensive. If it is comprehensive and affordable, it can be such only for those who can afford it, and hence not universal.”

So the block grant model cannot make the same mistakes as ACA. Dr. Villarreal is wrong: Some things in the current shopping basket will have to go back, even in a health care situation. People have to make decisions about what they can afford all the time. Why would health care be any different? 

I believe there is consensus that the current U.S. health care spending trajectory cannot be sustained. But hard decisions will have to be made before spending is under control, whether it be block grants or the current matching system. Texas physicians and the hospital systems will have to work together. 

In the Texas Medicine article, Ryan Van Ramshorst, MD, understates the “very large appetite” to contain costs. The large appetite of the health care system needs bariatric surgery. Only then will the shopping basket be smaller, allow fewer things in, and give everyone a shot at basic health care so that when it’s time to pay, the bill is affordable.

Lawrence O’Brien, MD, is a pediatrician in San Antonio. 

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July 20, 2017

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