Rae Bond

PDF: Revenue gains through Medicaid expansion

Local physicians said health care reform proposals to expand Medicaid coverage drastically, while well-intentioned, are likely unsustainable.

"Where is the money going to come from to make this happen?" said Dr. Mack Worthington, a family practice physician in Chattanooga who said almost one-quarter of his patients are on TennCare. "I'm all for increasing access, but I just wonder how it's going to be funded."

The U.S. Senate Finance Committee last week passed a health reform proposal that would expand Medicaid programs to anyone who earns up to 133 percent of the poverty level, or about $29,000 a year for a family of four.

The bill must be reconciled with another Senate health reform bill and then considered by both houses of Congress.

Local hospitals and safety-net clinics are absorbing more and more losses from treating uninsured patients, hospital administrators said. Expanding health care coverage through Medicaid for the poor and disabled would bolster their bottom lines, they said.

Hutcheson Medical Center in Fort Oglethorpe lost $34 million in fiscal 2009 to uncompensated care from uninsured patients and bad debt, CEO Charles Stewart said.

"We feel like we are the first line of defense for a lot of patients here," he said.

"Since they don't have insurance, they're coming to the emergency department, which correspondingly has meant a rise in our uninsured being admitted to the hospital," he said.

Tennessee Gov. Phil Bredesen has estimated that expansion of TennCare would cost the state $735 million over five years. Pressure to boost TennCare reimbursement rates or expand the program's prescription drug benefit could add another $3 billion from 2014 to 2019, the Times Free Press reported.

"It could potentially put the state in some serious financial straits," TennCare Director Darin Gordon said.

In Georgia, the state's cost to cover qualified Medicaid enrollees would be about $1 billion, said Bert Brantley, spokesman for Gov. Sonny Perdue's office.

Some supporters of expanding Medicaid point to potential economic growth from increasing the number of insured people in the state and drawing down more federal matching funds.

Combined with $1.1 billion in federal stimulus funding supporting Medicaid, the expansion also could be a boon to drugstores, hospitals and providers, creating more jobs and tax revenues, said Gordon Bonnyman, executive director of the Tennessee Justice Center.

"I haven't heard anybody look at the positives, in terms of state tax revenues and the state economy and health care infrastructure," Mr. Bonnyman said. "There's going to be this enormous boost economically to our health care system, and all you hear is people complaining about it."

A new study said Medicaid expansions will create new business activities and result in more jobs, salaries and wages. Every dollar invested in Medicaid would have a rate of return of between $2 and $6, according to an October study from researchers at the George Washington University School of Public Health and Health Services.

COVERAGE DOESN'T EQUAL ACCESS

But expanding Medicaid programs would not be a cure-all, local providers say.

Just because patients have insurance does not mean they always will be able to obtain care, said Rae Bond, executive director of the Chattanooga and Hamilton County Medical Society.

Doctors can't simply open their practices to an unlimited number of Medicaid patients, she said.

"Every medical practice is also a small business, and they have to maintain an appropriate payer mix that allows them to stay in business," she said.

Reimbursement for physicians under TennCare is about 85 percent of Medicare rates, Mr. Gordon said.

The Medicaid expansion would have to be accompanied by other reforms to be feasible, Erlanger CEO Jim Brexler said.

Higher reimbursements and more incentives to convince physicians to go into primary care would be crucial, he said.

"It isn't that it isn't a good idea; it's that it needs other dimensions to make it really work," he said.