The Smart Money: When the CEO can't do the math

Posted Tuesday, May 6, 2014 in Analysis

The Smart Money: When the CEO can't do the math

by Gina Hamilton

There were several defeats for the economy in the most recent Legislative session.

First and foremost, the loss of federal dollars to expand Medicaid, or MaineCare, as we call it, will have a troubling ripple effect throughout Maine’s economy.Maine’s population has an average age of 42.  People of that age and older use a lot more medical services than younger people do, for a variety of reasons, including sudden catastrophic life-threatening events, such as a heart attack, or chronic problems, such as Type 2 diabetes. The largest users of MaineCare are the profoundly disabled and the very elderly, of which Maine has a lot, and they tend to use MaineCare for things that just don’t get better — dementia care, for instance. 

There’s absolutely nothing we can do to change that, except to change the demographics in the state, encouraging younger, healthier people to stay here or settle here, have children here, and work here.

The people who would have been added under the expansion would have been younger, working adults, especially those without children, who can’t afford even the lower rates of the Affordable Care Act. Most of these folks don’t use a lot of health care, but catching their problems early — and paying medical providers to treat their problems — stimulates the local economy in several ways.

First, it ensures that hospitals, doctors, and other health care providers get, in fact, paid. When people need medical attention and cannot pay for it, they go to the most expensive health care option in the world — the American emergency room. And when they cannot pay that bill, when it arrives, those who are insured pay for it in higher costs for everything from linen service to radiology.

By covering the poor working adults, who will then be paired with primary health care providers, the emergency room may begin to be used again for its proper purpose — actual trauma or emergency care. 

The average cost for an emergency room visit is $1,049. The average cost to visit a doctor in Maine is $150.  Maine Medical Center recently released data that it had had 88,150 emergency room visits in a single year. If the statistics for the rest of Maine hold for Portland, 30 percent of those were for non-emergency care, and of those, 63 percent will never be paid for by the patient because they have no insurance and can’t afford it.

That’s almost $17.5 million for one hospital to absorb in one year. 

Multiply that by the number of hospitals in Maine, and you will have a better idea of the magnitude of the problem.

Of course, not all hospitals are as large as Maine Medical Center, and they aren’t all going to have the same number of non-emergency patients. But you get the idea.

The hospitals have to do a better job of diverting non-emergency patients to “urgent care” clinics, too. And Medicaid has to do a better job recruiting and keeping doctors in all areas of the state, and requiring patients to use primary care physicians or urgent care clinics for after hours care.

But for three years, at least some of those bills wouldn’t have accrued — at least for the hospitals and for those of us who are insured and will likely pay more for uninsured care. What could the hospitals have done with those dollars? 

Hired doctors, nurses, and other staff members, improving the local economy with high-paying, good jobs?

Invested in capital improvements? 

Improved their educational outreach on issues that affect an aging population, such as chronic care, dementia, or improved the health of younger people with smoking cessation programs and cancer screenings?

Paid their employees a little more so they could reinvest that money in the economy?

It’s impossible to know. Gov. Paul LePage vetoed the bill that would have accepted the three years of federal dollars and the Legislature was unable to override it. Funds that could, even now, be circulating in the economy, creating jobs, are lost, at least until January.

Another bill that was vetoed and not overridden was a bill that would have provided family planning services for women whose incomes were up to 200 percent of the federal poverty level.

That’s not a lot of money, by the way, only about $23,000 for a single person.

The bill would have provided well-woman checkups, including cancer screenings, and family planning services, including birth control.Obviously, women who are denied affordable family planning services and who then get pregnant become eligible for Medicaid, and likely, will remain on Medicaid throughout their pregnancies and their children’s early years.

Their children are also likely to be on Medicaid. They are also more likely to be eligible for welfare programs, such as Women, Infant, and Children (WIC), Supplemental Nutrition Assistance Program (SNAP), or Temporary Aid to Needy Families (TANF).  

The cost of the exam would be less than $200, and the prescription would be pocket change too, every month. Women, too, who do not get cervical cancer screenings and other regular checkups are far more likely to end up costing the state a great deal in Medicaid, as their needs are finally being taken care of, far too late.

From a simple cost analysis, vetoing such a bill is absurd.  It’s also heartless.  And it ends up costing the state in a number of ways that may as yet be unknown.

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