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For hospitals and physicians who want to continue to treat Medicare/Medicaid patients, there doesn’t seem to be much good news out there.  The latest news concerns the health of new Medicaid enrollees.  Americans who will enter the Medicaid program as a result of healthcare reform will be sicker than the typical program enrollee, translating into higher costs, at least initially, reports The Hill’s Healthwatch.  This conclusion comes from a study commissioned by Washington, D.C. based Avalere Health, which found that two-thirds of current Medicaid enrollees report being in “excellent” or “very good” health, but that only about half of those expected to be enrolled in Medicaid starting in 2014 report that they are in “very good” or “excellent” health. This difference is explained to exist because most currently uninsured Americans do not have ready access to preventive care.

“This is a more expensive population to treat, at least initially,” said Avalere CEO Dan Mendelson.  Mendelson noted that his company’s analysis could not conclude whether this health disparity would drive up the costs of implementing the Patient Protection and Affordable Care Act (PPACA) beyond the initial Congressional Budget Office estimates.  He may not know the costs of treating a sicker population of patients, but I’m fairly certain that it will not be less expensive to treat an increased population of unhealthy patients.

In a related story a group of healthcare providers including the American Hospital Association (AHA), Association of American Medical Colleges, the Federation of American Hospitals, and other powerful trade organizations have filed an
amicus brief
with the U.S. Supreme Court to argue against the right of states to arbitrarily cut Medicaid payments, reports AHA News Now.  The Supreme Court is currently reviewing a California case that was filed on behalf of various providers when the state’s Department of Health Care Services tried to cut Medicaid payment rates to hospitals by 10 percent several years ago. The 9th Circuit Court of Appeals upheld the right of providers to sue to enforce federal Medicaid law, but that judgment is currently under appeal to the Supreme Court.  The providers are arguing that the Constitution’s Supremacy Clause invalidates decisions made by individual states to cut Medicaid payments to providers.

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“This case is critical to preserve providers’ access to the federal court to hold states accountable for provider payment decisions,” said AHA President Rich Umbdenstock. “Beneficiaries’ access to healthcare services depends on having financially viable providers. Arbitrary spending cuts threaten access for our most vulnerable populations.”  There is a point where it will become impossible for healthcare providers to treat Medicaid patients for the amount of reimbursement that the States are willing (or able) to pay.  Once this point has been reached, healthcare providers will no longer be able to treat Medicaid patients.  Then who will treat these patients?

It would appear that healthcare providers will be required to treat more patients, who will have more health problems, for less money, while increasing documentation and providing more security for patient medical records.  That’s a big order for most physicians in private practice to fill.  It’s going to be very tough for Accountable Care Organizations (ACO’s) or Medical Homes to meet the cost containment that is expected of them, if the patient populations that they are treating have more health problems than their existing patient base.

Again, I have no real solution to this problem for most healthcare providers.  The ultimate solution is to educate and encourage the entire American population to adopt a healthier lifestyle, thus reducing the need for medical care.  I am flatly opposed to a ‘nanny state’ where the government coerces people to eat more healthily and exercise, but promoting a healthier lifestyle for everyone seems to be the only solution.  Unfortunately, the entire medial model is not based on this premise, so it will take a complete paradigm shift to accomplish this goal.  If that is the ultimate outcome of the PPACA- that Americans are forced to live a healthier lifestyle-then it may not be all bad.  That would certainly be an unintended consequence of the PPACA.

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