New Marketplace
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New Marketplace Survey: Why Medicaid Is Still Broken

Insights Report · October 6, 2016

Analysis of the third NEJM Catalyst Insights Council Survey on the New Marketplace theme. Qualified executives, clinical leaders, and clinicians may join the Insights Council and share their perspectives on health care delivery transformation.

 

Prior to the 2010 Patient Protection and Affordable Care Act, the average monthly enrollment for Medicaid was 56.4 million. As of this July, that number grew 27% to 72.8 million. This growth is largely due to increases in the income limits to qualify for Medicaid, and to a widening in the categories of patients eligible for enrollment.

The rapid change in the Medicaid landscape has caused undeniable challenges for physicians, hospitals, and health systems.

In the latest NEJM Catalyst New Marketplace Survey, we asked our Insights Council to weigh in on the effect Medicaid expansion has had on the health care industry and how they feel about the program’s future.

High Quality of Care, Substantial Cross-Subsidization

One fundamental question we had — Is care the same for Medicaid patients as for the commercially insured? — was answered with “yes,” for the most part. In fact, 80% of respondents said their organization provides the same quality of care to Medicaid patients always (35%) or most of the time (45%).

Quality of Care for Medicaid Patients

New Marketplace Insights Report. Click To Enlarge.

Given the well-known low reimbursements paid by Medicaid, this result was somewhat surprising. Digging in deeper, we discovered that most of our respondents are able to cross-subsidize this population. More than half of survey recipients reported Medicaid patient loads under 30%. Only 13% of respondents said their Medicaid subscribers represented 50% or more of their patient population.

Percentage of Patients Covered by Medicaid

New Marketplace Insights Report. Click To Enlarge.

Council members also were optimistic about the impact of insuring the formerly uninsured. For instance, 49% said newly insured patients are establishing regular sources of preventative care, are better able to access and comply with prescribed therapies, or both of the above.

Patient Impact of Transition from Uninsured to Medicaid

New Marketplace Insights Report. Click To Enlarge.

Of the 38% citing no change in their patients’ behaviors, many noted they come from states such as South Carolina and Florida that have no plans to participate in Medicaid expansion. In fact, 49% of respondents in the South reported “no change” compared to 40% in the Midwest, 32% in the Northeast, and 27% in the West.

VERBATIM COMMENTS FROM SURVEY RESPONDENTS

What do you view as the major opportunities and barriers to providing high-quality care to Medicaid patients today?

“Main opportunity is improving the health of people that have not had insurance. Barrier is getting enough doctors to accept Medicaid.”
— Clinician at a physician organization in the Midwest

“Opportunities: improved access; barriers: lack of resources upon return to home in rural communities.”
— Executive at a clinic in the South

“Opportunities – testing new payment models, more comprehensive approaches to care. Barriers – lack of nimbleness of system, full patient engagement.”
— Department Chief at an academic hospital in New England

“Lack of adequate provider payment.”
— Clinician at a medical school program in the Northeast

“Human nature. It’s difficult to change behaviors even when providers have the best intentions and when cost (for the patient) is not a factor.”
— Director of a health system in the Northeast

“Moving to Medicaid expansion in all states would bring significant advantage to patients and state government and revenues to the state to help cover the cost of vulnerable populations. Moving to nationalize Medicaid, similar to Medicare, would offer further benefits, but [is] politically impossible now.”
— Clinical Leader at a medical school program in the South

“Lack of financial support severely limits choices in management of health problems.”
— Clinician at an academic hospital in the Midwest

“Unrealistic expectations about ability to reduce costs. Challenges to pilots because providers [are] expected to take risks. Not adjusting for expensive drugs such as the Hep C drugs and other specialty medications.”
— Executive at an academic hospital in the Mountain West

“Funding hospital based services and finding outpatient providers who will accept Medicaid. Significant struggles on a daily basis — especially by our emergency department.”
— Vice President of Medical Affairs at a community hospital in the South

“Information integration and easy access to continuum services are the greatest challenges.”
— Vice President of a community hospital in the South

“Lack of the political will to address the social and medical needs of the disadvantaged — Managed care is definitely not the answer.”
— Chief Medical Officer of a clinic in the Pacific West

“People are human, I can preach safe sex, stop smoking, no texting while driving, but they will still do what feels good at the time. I wish they would take “life coach” role off my plate, and let me do science that is rewarding.”
— Physician at a clinic in the Pacific West

Pessimism on Medicaid Managed Care and Alternative Payment Models

We also explored views regarding Medicaid managed care plans, as many new enrollees are receiving benefits through such plans. When asked about the benefits of such plans, respondents listed improved cost (43%) and improved health outcomes (39%), but many shared frustrations in written comments. Commentators described managed Medicaid organizations as “disastrous all around,” “negative for individuals with chronic problems,” and “horrible.” One respondent wrote, “I am uniformly unimpressed.”

Top Advantages of Managed Medicaid Organizations

New Marketplace Insights Report. Click To Enlarge.

Respondents were pessimistic about the success of alternative Medicaid payment models in the next two to three years. About two-thirds (64%) reported they were either not optimistic or only slightly optimistic about alternative payment models for Medicaid. Clinicians are far more hesitant about the future of payment reforms than executives and clinical leaders. Overall, this is a disappointing response given CMS’ aggressive timeline for migrating to alternative payment models.

Levels of Optimism for Success of Alternative Medicaid Payment Models in Next 2-3 Years

New Marketplace Insights Report. Click To Enlarge.

 

What might improve the outlook for this long-lived state-federal program to cover the low-income and disabled population without other sources of coverage?

Respondents listed “better integration of mental health/behavioral health services,” “better integration of long-term services and supports,” and “adding more social and housing supports to the program” as their preferred Medicaid changes. They were less enthusiastic about financial changes such as “shifting more dual-eligibles into managed care contracts” and “demonstration programs where provider organizations bear risk and reap rewards for cost savings and quality improvements.” Unsurprisingly, executives are far more bullish on these financial changes than clinicians.

Ratings of Medicaid Program Changes

New Marketplace Insights Report. Click To Enlarge.

Almost everyone in the U.S. health delivery space is now exposed to Medicaid (only 5% of Council members said they have no Medicaid patients). The survey reveals that hospitals are likely to bear the brunt of tight Medicaid budgets, as they report higher Medicaid patient loads than physicians; 37% of hospital respondents report that 30% or more of their patients are covered by Medicaid, versus 9% of respondents from physician organizations. Conversely, 35% of physician organization respondents said that 9% or fewer of their patients are covered by Medicaid.

These discrepancies show that Medicaid, which was established more than 50 years ago, is still broken. As Council members emphatically noted, Medicaid remains heavily dependent on federal funding, individual states struggle with Medicaid management (including shifting services away from the costly ER), and hand-offs to third parties have not been a successful solution.

METHODOLOGY AND RESPONDENTS

  • In August 2016, an online survey was sent to the NEJM Catalyst Insights Council, which includes U.S. health care executives, clinician leaders, and clinicians at organizations directly involved in health care delivery. A total of 389 completed surveys are included in the analysis. The margin of error for a base of 389 is +/- 5.0% at the 95% confidence interval.

  • The majority of respondents were clinicians (47%), followed by clinician leaders (31%) and executives (22%). Half of the respondents described their organizations as hospitals (35%) or health systems (15%). These hospitals were predominantly midsized (31% had 200–499 beds) or larger (51% had 500 or more beds).

  • Only 9% of respondents indicated that their major affiliation was with a physician organization. Those physician organizations tended to be big — 54% had 100 or more physicians.

  • More than two-thirds of the organizations (68%) were nonprofit, with the remainder of respondents coming from for-profit organizations. Every region of the country was well represented.

Check NEJM Catalyst for monthly Insights Reports not only on the New Marketplace, but also on Patient Engagement, Leadership, and Care Redesign.

Join the NEJM Catalyst Insights Council and contribute to the conversation about health care delivery transformation. Qualified members participate in brief monthly surveys.

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