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Expanding Medicaid would harm, not help rural hospitals


Rural hospitals in Mississippi are in crisis, we are told. Unless they receive more money, many may close, apparently.

There’s an easy answer, according to those that want to expand Medicaid. Rural hospitals, they claim, are losing money because of the costs of caring for all those without health insurance. If only we would expand Medicaid, they suggest, rural hospitals would be secure.

This idea is nonsense, but unfortunately many in the state legislature now believe it.

Rural hospitals do indeed face a financial squeeze. This is not due to a lack of Medicaid but because Medicaid does not pay. Medicaid reimburses hospitals significantly less than the actual cost of providing treatment.

Every time a rural hospital treats someone on Medicaid, the hospital likely loses money. How would expanding such a loss-making system improve the financial position of rural hospitals? It wouldn’t.

Many Mississippi hospitals are in financial difficulty not because there is too little Medicaid, but because there is too much of it. Drawing more people and health care providers into this loss-making system solves nothing – and might make matters worse.

Those that run rural hospitals have to walk a financial tightrope. On one side, they need to take patients on Medicaid, but they do so in the knowledge that they will seldom be reimbursed enough to make any money from it. To balance the likely loss, they then need to find and charge enough from insured patients to recoup what they lose on the Medicaid side.

Expanding the number of Medicaid patients would mean that they need to recoup more from insured patients, through higher premiums and charges. It is not impossible that if rural hospitals started to do this, they would discover that there simply aren’t enough insured patients to cross-subsidize the cost of treating those on Medicaid.

For many in the state legislature, Medicaid expansion has become an answer looking for a solution. Cash-strapped hospitals? More Medicaid! Poor postnatal care? More Medicaid! Unequal health outcomes? More Medicaid!

Never mind that it might actually be Medicaid that accounts for many of the shortcomings in the current system. Anyone opposed to more Medicaid is treated as if they want worse health care.

The demand to expand Medicaid has drowned out the case for making the kinds of changes our health system in Mississippi actually needs.

Did you know, for example, that the Mississippi Code explicitly prohibits any freestanding Emergency Room in rural areas, except in very limited circumstances? Having freestanding ER facilities in rural areas might make good sense. But insisting that there can only be an ER facility if there is a fully-fledged hospital attached necessarily limits ER provision in rural areas.

Across Mississippi, anyone looking to expand healthcare provision needs to get a permit – known in the businesses as a Certificate of Need. They are notoriously difficult to get, meaning that the shape and scope of healthcare provision in much of the state have been frozen in time.

Healthcare provision has not been allowed to evolve and grow as the needs of local communities change. It is hardly surprising that after four decades of this protectionist red tape, the healthcare facilities in many parts of our state no longer match the actual demands of those that live there.

“Okay, Carswell” some in the legislature will say. “These arguments are all very interesting, but what do I say to someone in my district that only earns $40,000 a year and can’t get the healthcare that their family needs? We have to have practical solutions that will help them today”.

I agree. Change is needed to ensure that primary health care is available at a price that someone on a relatively low income can afford – and other states show precisely how this might be done, without expanding Medicaid.

Next month, Dr. Lee Gross, a brilliant physician from Florida is coming to Mississippi to explain how he provides affordable health care to ordinary families. Instead of asking for insurance or Medicaid, Dr. Gross provides families with care using an affordable subscription model. It is low-cost, reliable and wildly popular.

I hope that lots of lawmakers will come to listen to Dr. Gross explain how we can actually improve health care for low-income Mississippians.

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