Health care, not coverage
For the next three months, the Supreme Court will mull the constitutionality of the new health care law. At stake is the government’s requirement that its citizens buy private health insurance. But whatever the outcome, it’s a foregone conclusion that some fundamental change must be instituted in the financing of health care delivery.
Today, enormous sums of taxpayer money are spent on the administration of health care programs such as Medicaid. Those administrative costs could be sharply reduced and the savings put to what is really needed — providing health care. With the information technology available today, public agencies should consider eliminating their function as a government-run insurance operation and focusing their resources on paying providers to deliver care.
Consider Medicaid, the shared federal and state program for the poor. When Medicaid was created, it was designed to replicate the private insurance function. But the basic purpose of insurance is to protect the policy holder’s assets against a catastrophic event causing risk of personal bankruptcy. Because the very nature of qualifying for Medicaid requires recipients to first spend down their assets and then earn an annual income below a certain percentage of the federal poverty level, what assets is the policy protecting? The person doesn’t need health insurance. He needs health care.
Unnecessary bureaucracy
When the government created Medicaid as a look-alike insurance product, it developed an oversight operation that has not kept up with what technology can do to make a system run more efficiently. And unlike private insurance, it built a system requiring monthly updates of each of its 50 million recipients’ eligibility, including filled-out and faxed-in monthly reports, income receipts, etc.
This requires an army of workers to process piles of eligibility paperwork. Over the years, as the program grew, so did the administrative staff.
To be sure, Medicaid has grown up as an adjunct to safety-net programs such as unemployment benefits and food stamps. As a result, aggressive screening procedures were designed to avoid fraud and to deter those who do not qualify from enrolling. But now that drastic cost-cutting measures have become necessary, we shouldn’t automatically cut services at the patient care level.
Instead, let’s also look at how technology can help achieve savings.
America’s poor don’t need the insurance. Instead, what they need is medical treatment. Sharing financial records can make it happen.
For example, California’s health care agency reported that it employs a full-time staff of 27,300 to monitor and implement its Medicaid, financial aid and food stamp programs. At an average annual cost of $110,000 per employee, California is budgeting more than $3 billion yearly for administration. That’s money not spent on medical care, food stamps, or the financial assistance — just on the cost to watch over these programs.
It’s therefore conceivable that the government would save significant money if it switched its focus from qualifying people for public insurance to simply qualifying them for care at the point of service.
Point-of-care system
Currently, we have state and federal administrators checking Medicaid applications online with the IRS. We already trust health providers with Americans’ most private information — their medical records. Why not take it a step further? A health care provider could easily share online capability with the Medicaid agency to immediately qualify or disqualify a person at its clinic or the emergency room.
When people without insurance seek treatment, a trained staff member could simply go to an online address, input basic patient data, and check for available options and whether their income (checked online as it is now with the IRS) qualifies them for government services. This pointof-care enrollment would provide automated checkpoints for eligibility and implement a transparent system with fraud controls.
Today, technology can place at our fingertips a world of information and data, all of which allow us to make major decisions with a relatively reliable level of comfort. When it comes to health care, we should look seriously at how technology can help us provide care and cut costs in our efforts to protect this precious delivery system.