The Bigger Picture: Fixing Medicaid

January 1, 2008

The government has some ideas about what’s wrong with Medicaid, and how to fix it. Too bad their ideas don’t have much to do with paying doctors better.


Recently the inspector general of the federal agency that oversees Medicaid issued a report praising 12 states for their model use of technology. The states are using claims-based electronic health records, e-prescribing, and remote disease monitoring, among other tools.

I compared this list of states with the top-performing Medicaid agencies in PayerView, our ranking of payers based on how easy they are to work with. I expected congruence. Technology, one assumes, contributes to efficiency. But there was almost no overlap.

Why not? The Department of Health and Human Services [DHHS] is looking at clinical waste, an obvious concern for near-broke Medicaid systems. The government wants technology that saves money.

On the other hand, PayerView implicitly encourages technologies that get physicians paid more easily. It discourages the kind of administrative waste that leads to payment hassles. From a PayerView perspective, the core issue for Medicaid is whether a program insists (as so many do) on outdated, onerous payment bureaucracies.

For example, PayerView scolds New York Medicaid for taking 180 days to pay the average claim. With PayerView, the idea is that cutting out the nonsense makes it easier for physicians. It means there is more money spent on beneficiaries instead of administration and that there will still be physicians willing to see Medicaid patients.

John Hallock, manager of public affairs and corporate communications at athenahealth, our PayerView partner, says he commends the inspector general’s office for at least trying to find efficient Medicaid programs, but notes that the government’s idea of efficient is different from the average doctor’s. The systems examined in the IG’s report “have zero to do with solving the larger issues,” like the large number of providers who are dropping out of Medicaid because of the hassles, Hallock says. “There is a massive access-to-care issue that has nothing to do with [whether a physician has] an EMR.”

To be fair, the federal government is trying to help administratively as well, with an initiative that aims to share organizational efficiencies among the states. But in today’s healthcare culture, quality and payment are the flags waved by opposing sides. It’s hard to stand behind both at once.

“Quality” is the buzzword among payers and executive types. Witness Medicare’s decision not to pay to treat hospital-acquired infections. It’s hard to argue with the rationale for this decision: Why should taxpayers have to pay healthcare providers to treat ailments caused, in essence, by the providers themselves? Or take the payers’ infatuation with pay-for-performance. Why not use financial incentives to encourage the adoption of evidence-based medicine, which will increase the quality (and decrease the cost) of care, goes the thinking.

In the trenches, physicians are justifiably skeptical about self-interested payers assessing quality and resent the implication that physicians are wasteful. They put the blame for our current crisis more on problem-focused versus preventative-focused payment systems, administrative burdens, high salaries for payer CEOs, and the like.

Both sides make good points.

It’s a self-defeating argument, though. Physicians are not against better quality. And honestly, there is well-documented need for improvement. But that doesn’t have to mean the payment side can just slide. I’m rooting for both sides at once.

Ideally, the DHHS and PayerView lists of the best Medicaid systems would be the same. Not because either side gave up its goals, but because the goals are so intimately tied that they wind up at the same place. Think it’s possible?

Pamela Moore, PhD, is senior editor, practice management, of Physicians Practice. She can be reached at pmoore@physicianspractice.com.

This article originally appeared in the January 2008 issue of Physicians Practice.