Improve Medicaid payments for primary care in Virginia
An ounce of prevention is worth a pound of cure. Despite this, we spend more than $4 trillion a year (18% of our GDP) on health care treatments with less than 6% of that amount going into primary care, which focuses on prevention of illness. Primary care providers include family physicians, internists, pediatricians, OB-GYN doctors, nurse practitioners and physician assistants that are the first stop for most people accessing our health care system.
Primary care in the United States is under tremendous stress. Office overhead expenses run 60-70%. Insurers require increased documentation in electronic health records and prior authorization requirements are frustrating and time consuming. There is an aging workforce and it is difficult to recruit new physicians into this challenging line of work. Many primary care doctors have retired or left private practice and joined large hospital-based systems.
Virginia expanded Medicaid coverage in 2018. Medicaid now insures nearly 1 in 4 Virginians, dramatically increasing the number of Virginians who have health insurance. There is a little discussed problem with Virginia’s Medicaid payment system however; the payment amount for services is only 72% of that for Medicare and even less than that compared to private insurance payments. Despite this, 76% of primary care providers continue to see Medicaid patients and 58% are taking new Medicaid beneficiaries.
I learned firsthand the financial problems that result from taking low Medicaid payments as the medical director of two large family medicine residency training practices over 17 years. More than a third of our patients had Medicaid and this percentage increased after Virginia’s 2018 Medicaid expansion. We continued to see more Medicaid patients who needed comprehensive care, but took significant financial losses for doing so. This led to eliminating essential staff positions, making it much more difficult to continue our mission of providing primary preventive care and treating chronic illnesses.
Many Medicaid patients have more severe chronic illnesses than those with private insurance, and thus it takes longer to see them and provide the complex care that they need. This contributes significantly to the stress of primary care doctors, since they are responsible for the many problems these patients have. Other insurance programs have a system for compensating providers with higher reimbursement for treating those with more severe illness and rewarding higher quality care with better payment. Medicaid has no effective system for doing this; payments remain 72% of the average Medicare reimbursement, despite many previous legislative efforts to get these payments to parity with Medicare.
Gov. Glenn Youngkin recently proposed his $84 billion budget for FY 2024 and has proposed tax cuts as noted by The Virginian-Pilot & Daily Press Editorial Board on Dec. 27 (“A tax reform opportunity”).
There was a massive budget surplus in the last two years and much debate about how that money should be spent on many worthy causes. A compromise between tax cuts and spending in important areas was finally reached between Democrats and Republicans this past summer. This debate will go forward in the 2024 legislative session, which begins on Wednesday.
It would be a huge boost to our primary care workforce if the legislature were to act to provide Medicaid payments for primary care that are equal to those of Medicare. Estimates put the cost of this at $178 million dollars annually, which is only 0.2% of the total annual Virginia budget. Doing this would provide health care security to our less fortunate citizens by ensuring continued access to primary care services. Millions of future health care dollars would be saved by providing prevention and early treatment of chronic disease instead of treating much more expensive advanced illnesses. What could be a better investment in the future health of Virginians?
Dr. Bob Newman is a clinical professor of family medicine at Eastern Virginia Medical School in Norfolk. He is the author of “Patient’s Compass,” which is a guide to navigating the U.S. health care system, available online at yourpatientcompass.com.