Significant Healthcare Event 1

Significant Healthcare Event 1

Significant Healthcare Event:

The Medicare and Medicaid Revolution

NAME

PROFESSOR

COURSE

DATE

Significant Healthcare Event: The Medicare and Medicaid Revolution

Perhaps no other event in the history of healthcare legislation in the United States is more significant than the creation, of long years of heated debate, of Medicare and Medicaid in 1965. Designed to protect the nation’s most vulnerable populations from the often devastating financial impacts of disease, injury, and disability, the creation of Medicare and Medicaid ensured that the elderly, the permanently disabled, the impoverished, and the impoverished young would receive the healthcare they required. Numerous changes have taken place in both programs in the decades since their implementation and controversy remains regarding the function, execution, and funding of these programs, particularly as both programs face increasing financial pressures due to the aging of the massive baby boomer population, the growing obesity epidemic in the US, and rising poverty rates in climate of continued post-recession economic instability. Both Medicare and Medicaid have provided an indispensable safety net, safeguarding those in need from the crushing costs of medical care while ensuring that financial circumstances would not be a barrier to essential care; nevertheless, substantial and strategic reform is urgently needed if future generations are to enjoy the same protections.

Medicare and Medicaid: What They Are and How They Came to Be

The push for government-sponsored health coverage long predates the 1965 legislation which brought Medicare and Medicaid into being, as does the controversy surrounding such a demand. Mandel (2015) notes that agitation for the institution of such legislation began nearly a century ago, conceptualized primarily as a form of “sickness insurance program” (n.p.) and aimed foremost at benefitting laborers who may otherwise have been incapable of absorbing the high costs of medical care. Resistance to such reforms was potent, however, as opponents across the decade argued that government-sponsored health coverage infringed upon citizens’ individual liberties, particularly their liberty to make their own healthcare choices and to remain free of the burden of responsibility for the choices of others (i.e. through the funneling of their tax dollars into such a program without their consent).

When Medicare and Medicaid legislation finally passed in 1965, it was, indeed, an unprecedented event not only in regard to the provision of healthcare in America but also as a hallmark in social reform. Medicare and Medicaid remain two benchmark programs in the arena of social services, intended to provide a safety net for at-risk populations while also advancing a fundamental ideal regarding the value of human life, the assurance that protection from needless suffering and the promotion of life and well-being will not be based upon one’s socioeconomic status. The ideal informing the programs is that medical care should not be contingent upon one’s ability to pay. The long and frequently troubled history of both programs, however, reveals that all too often the reality falls far short of the ideal.

A case-in-point is the dramatic evolution that the Medicare program has undergone in the 51 years since its inception. Expanding and growing much more complicated than its original form, the Medicare program today consists of four sections, A, B, C, and D, which, respectively, pertain to in-patient care, out-patient services, Advantage/managed care programs, and prescription programs(Tierney, 2016). Despite these changes, the most fundamental principles of Medicare have remained the same: Medicare is designated for citizens or permanent residents over the age of 65, individuals of any age who have end-stage renal disease, and individuals with certain types of disabilities. Further, qualified individuals must either have worked or have had a spouse who worked for at least 10 years in employment through which payroll taxes were withheld. It is from these taxes that a large portion of the Medicare trust fund derives (Mitchell, 2015).

Medicaid, on the other hand, is a much more complex and diverse program insofar as it is state-administered and therefore varies from one state to the next. While Medicare is a benefit to which almost all citizens and residents over the age of 65 will be entitled, Medicaid is typically reserved for special populations facing extreme financial challenges. While requirements, policies, and procedures vary between the states, most Medicaid programs are reserved for the poorest populations, as well as the permanently disabled who have not met the 10-year employment threshold, as well as low socioeconomic status (SES) children, particularly those requiring on-going medical care for chronic illnesses or disabilities (Mandel 2015).

Short Term and Long Term Effects

There can be no doubt that both the Medicare and Medicaid programs have saved millions of lives and improved quality of life for millions more by ensuring quality of healthcare for those whose financial circumstances would otherwise have made such care impossible. Moon (2015) writes,

Medicare is one of the most successful programs of the federal government. It has achieved nearly universal coverage of healthcare for the most difficult populations to serve—people over 65 and those with permanent disabilities. It ranks well above private insurance in satisfaction rates from enrollees. (p. 164)

Likewise, Medicaid has enabled the poor, the permanently disabled, and impoverished children to receive the continuity of care essential to disease management and prevention. In their study of disease outcomes among very low SES Medicaid-insured patients versus non-insured patients, Christopher et al. (2016) found not only significant benefits to physical health but also marked contributions to Medicaid patients’ psychological and social well-being versus their non-insured counterparts.

The challenges confronting both programs, however, are vast and growing. Despite the immense difference these programs have made in the lives of countless patients, many patients continue to fall through the cracks, receiving little or no care as the programs are currently constructed. For example, in their study of the continuation of preventative asthma medications by Medicaid-insured children, Capo-Ramos, Duran, Simon, Akinbami, and Schoendorf (2014) found that those children enrolled in a fee-for-service Medicaid program were less likely to continue their preventative treatment, presumably due to the untenable costs of these prescriptions, even under the program, for these low SES families. Likewise, a 2015 study by Howard LeWine found that 10% of Medicare recipients routinely skip or reduce medications due to cost.

Unfortunately, the real and significant problems which exist in both the Medicare and Medicaid programs are projected only to worsen. Moon (2015) cites current projections that the Medicare Part A trust fund will be entirely depleted by the year 2030, while the financial strains on the other sectors of Medicare and on Medicaid are not much better. This is due in no small measure to the aging of the population, increasing life expectancies (meaning more people will draw Medicare funds for longer), and an increasingly sick population, which can be attributed largely to the ever-worsening obesity epidemic. Bragg and Hansen (2015) have found that by the year 2030, the same year that Medicare Part A is projected to run out of funds, there will be more than 18 million people in the US over the age of 65 and suffering from a disability.

As has been noted, the majority of Medicare funds come through a combination general revenue funds and Social Security payroll taxes (Tierney, 2016). With the aging population, however, taxpayers’ burdens will only increase. Himmelstein and Woolhandler (2016) project that by the year 2024, 44.6% of the population will be receiving Medicare or Medicaid benefits. Further, Uhlenberg (2013) asserts that in the developed regions of the globe, including the United States, the proportion of the population over the age of 65 is expected to roughly equal the proportion of the population under the age of 15. This represents a profound demographic challenge as the burden on the workforce to provide for the needs of the aging, the disabled, and the very young grows. Quite simply, the very existence of Medicare and Medicaid is coming under increasing threat as the demand grows; as the population ages, grows sicker, and becomes more impoverished, the need for Medicare and Medicaid benefits only continues to accelerate beyond the capacity of the government—and the US worker—to meet it.

The Affordable Care Act

The Affordable Care Act (ACA) was implemented in no small measure to remediate many of the shortcomings previously identified, most notably to provide health insurance coverage to those not eligible for Medicare or Medicaid benefits, to expand coverage to those previously ineligible, and to redress coverage gaps for those already enrolled. With this expansion of coverage, however, has come a decided shift in the operation of most Medicare programs. Whereas many programs had operated largely upon the traditional fee-for-service model with which the program originated (Tierney, 2016), new ACA regulations have precipitated a shift toward a more performance or outcomes-oriented model. Hilton (2015) writes, “it’s time to bid farewell to fee for service and embrace the concept of value-based compensation in medicine” (p. 1).

The challenge of this new model, however, is that it is putting increasing financial pressure on healthcare systems already struggling in the face of an uncertain economy, where patients’ needs are growing but their financial capacity, all too often, is shrinking (Morrison, 2015). The spate of hospital system downsizing and restructuring in recent years has been attributed largely to dramatic decreases in government funding. Of the Mount Sinai Health System’s May 2016 decision to close the famed Beth Israel Hospital in Manhattan, President and Chief Executive, Dr. Kenneth L. Davis cited the projected $2 billion reduction in government Medicare reimbursements over the next 10 years as a key factor in the decision (as cited in Santora, 2016). These decreases in government funding come at a time when the system was already operating at a $115 million annual operating loss, according to Davis.

The restructuring of Medicare reimbursement procedures in the wake of the ACA is premised upon the concept of accountable care, in which reimbursement is not automatically assured for services provided but is instead predicated upon the provider’s ability to prove that the treatment provided is likely to be of tangible medical benefit to the patient. Such an emphasis on medical outcomes has shifted the focus of medical practice more toward disease prevention and the provision of care in outpatient, clinic and ancillary service-based facilities. The result is a more streamlined medical system, with an increasing emphasis on technology and a reduced but more efficient workforce (Robeznieks, 2015).

Despite this emphasis on performance outcomes within the Medicare and Medicaid, dramatic downsizing among some of the nation’s most illustrious systems (including not only Mount Sinai, but also the Cleveland Clinic, and Vanderbilt), and a drastic shift in medical practice toward outpatient care and disease prevention is disconcerting to many practitioners and patients alike. Hilton (2015) notes that patients are likely to feel increasingly dissatisfied with the requirement that services be limited only to those which the practitioner can prove are likely to be medically beneficial. In general, the greater the extent of medical intervention given—or offered—the higher the patient’s satisfaction, both with the quality of care and with the care provider (ibid.) Thus, the ACA is engendering shifts to the Medicare program in particular that are having a profound ripple effect across the entire medical industry, changing, through persuasion or necessity, how patients view healthcare and how practitioners provide it.

Conclusion

The creation of the Medicare and Medicaid programs is one of the most significant events not only in the history of modern US healthcare but in US social history as a whole, insofar as these programs fundamentally shifted the nation’s perspective on individual rights. By ensuring government-sponsored health coverage for the nation’s most vulnerable populations, including the aged, the disabled, and the impoverished, the Medicare and Medicaid programs affirmed the value of life and the government’s role as steward in preserving life and promoting its quality. The ideal motivating the programs was the premise that financial circumstances should never bar an individual from the medical care s/he needs and that no family should have to suffer from financial devastation to cover the costs of such care. By and large, the most cherished ideals by which the programs were conceived have been met; millions of lives have been saved and countless more have been bettered through these programs. Nevertheless, problems exist and are worsening. Coverage gaps have still bar untold numbers from full access to the care they need. Further, both Medicare and Medicaid are threatened by a climate of profound economic uncertainty and an aging and increasingly ill population. Demand for these benefits, it is feared, will soon far outpace any ability to meet it. The Affordable Care Act has only increased these pressures, at least in the short run, by dramatically expanding coverage while reducing reimbursements just as dramatically. The intention, however, is to inaugurate a shift in medical practice which will enable Medicare, Medicaid, and the healthcare industry as a whole to meet the demographic and economic challenges that lie ahead. The expectation is that by instituting a value-based, accountability model to Medicare and Medicaid, patient populations will be healthier, practitioners will be more efficient and effective, and these programs will continue to be the gold standard in government-sponsored healthcare for generations to come.

References

Bragg, E.J. & Hansen, J.C. (2015). Ensuring care for aging baby boomers: Solutions at hand. Journal of the American Society on Aging, 39(2), 91-98.

Capo-Ramos, D.E., Duran, C., Simon, A.E., Akinbami, L.J., Schoendorf, K.C. (2014). Preventive asthma medication discontinuation among children enrolled in fee-for-service Medicaid. Journal of Asthma, 51(6), 618-626.

Christopher, A.S., McCormick, D., Woolhandler, S., Himmelstein, D.U., Bor, D.H., & Wilper, A.P. (2016). Access to care and chronic disease outcomes among Medicaid-insured persons versus the uninsured. American Journal of Public Health, 106(1), 63-69.

Hilton, L. (2015). Say farewell to fee for service: linking pay to quality vs. quantity has positives, negatives. Urology Times, 43(4), 1, 32-41.

Himmelstein, D.U. & Woolhandler, S. (2016). The current and projected taxpayer shares of US health costs. American Journal of Public Health, 106(3), 449-451.

LeWine, H. (2015). Millions of adults skip medications due to their high cost. Harvard Health Blog, n.p. Retrieved from

Mandel, I. (2015). Medicare and Medicaid. Research Starters: Sociology (Online Edition).

Mitchell, O.S. (2016). Public and private challenges of an aging U.S. population. Business Economics, 51(1), 8-10.

Moon, M. (2015). Improving Medicare financing: Are we up to the challenge? Journal of the American Society on Aging, 39(2), 164-171.

Morrison, I. (2015). The U.S. health care consumer. Trustee, 25-28.

Robeznieks, A. (2015). How do we replace jobs lost when we downsize hospitals? Modern

Healthcare, 45(9), n.p.

Santora, M. (25 May 2016). Mt. Sinai Beth Israel Hospital in Manhattan will close to build smaller. New York Times Online, n.p..

Tierney, R. (2016). Medicare. Magill’s Medical Guide Online, Sixth Edition.

Uhlenberg, P. (2013). Demography is not destiny: The challenges and opportunities of global population aging. Generations, 37(1), 12-18.