With or without Medicaid expansion, system faces strain
by Tim Lockette
Mar 03, 2013 | 6183 views |  0 comments | 7 7 recommendations | email to a friend | print
An entrance to Regional Medical Center is shown (2007). (File photo / Anniston Star / Stephen Gross)
An entrance to Regional Medical Center is shown (2007). (File photo / Anniston Star / Stephen Gross)
MONTGOMERY — If Medicaid is expanded to take in hundreds of thousands of additional clients, new patients could put additional strain, at least for a few years, on the already short supply of Alabama doctors who work with the program, experts say.

But if Medicaid isn’t expanded, the state’s hospitals could come up a quarter-billion dollars short by 2020, as the federal government pulls back on incentives for treating uninsured patients in emergency rooms.

“That’s the massive thing that often isn’t discussed,” said David Becker, a professor of health economics at the University of Alabama at Birmingham.

Expansion of Medicaid, the joint state-and-federal health insurance program for people in poverty, has become an increasing point of partisan controversy.

Under the Patient Protection and Affordable Care Act, popularly known as Obamacare, states originally were required to expand their Medicaid programs to eligible people with incomes at or below 133 percent of the federal poverty level. (Many states, including Alabama, now cover only people below the poverty line, or $23,550 for a family of four.)

But the U.S. Supreme Court struck down the part of the law that made the expansion mandatory, giving governors the option to reject it.

Gov. Robert Bentley did just that. Citing the state’s growing cost for Medicaid, he said he couldn’t expand the program. At $615 million per year, the price tag for the state’s share of Medicaid has more than doubled since 2008. Lawmakers may move to overhaul the program this year, and Bentley said he wouldn’t expand the program in its current state.

“We believe we can make this system much better,” Bentley said last week. “Do we have the ability to expand Medicaid from 938,000 to another 400,000 people? We really can’t afford that right now.”

A UAB study found that the expansion would likely add around 300,000 new clients, though UAB’s estimates range as high as half a million new clients.

Democrats maintain that the state can’t afford not to expand. Noting that the federal government will pick up the tab for the initial years of the expansion, and 90 percent of the bill thereafter, Democrats say the governor is passing up a chance to bring billions of dollars into the state’s economy — nearly $20 billion in the next six years, to be exact.

“This is bigger than Airbus,” said Democratic Sen. Roger Bedford last week, citing the airplane manufacturer the state recently recruited to Mobile.

Growing pains

But like Airbus, the Medicaid expansion is an economic opportunity that would require the state to bump up its infrastructure.

“You would like to think that with more people being covered, more doctors would accept Medicaid,” said UAB health economics professor Michael Morrisey. “Ultimately that depends on other factors, such as how well they’re reimbursed.”

Morrisey is a co-author, with Becker, of the UAB study the Democrats used to make their $20 billion claim. That study found that with the expansion, the federal government would give around $11.7 billion in additional money to the state’s medical providers, with an additional impact of $8.1 billion outside doctors’ offices.

“Those dollars get paid to the doctor’s office or the drugstore or staff salaries, and those people turn around and buy other things,” Morrisey said.

That implies that there will be new doctors, new nurses and new staff at work in Alabama to meet the new demand for services. But will there be?

“It’s an open question,” Morrisey said. “There’s a chance there will be difficulty finding new providers.”

Alabama now has one doctor for about every 200 residents, according to the Association of American Colleges of Medicine, or AACM. That lands Alabama among the 10 states where doctors are most scarce. The other nine, a band of states across the Deep South and a cluster in the Northwest, have also mostly opted out of the expansion.

Alabama could recruit more doctors from other states, but competition could be fierce in the future. The AACM predicts a shortage of 45,000 patient-care doctors nationwide by 2020.

“We don’t even have enough doctors to treat the people who are covered right now,” said Chris Mitchell, director of federal affairs for the AACM. Mitchell said the aging of baby boomers has swelled the ranks of patients, while as much as one-third of the physician workforce could retire soon.

Compared to the baby boom effect, she said, the Medicaid expansion would be small, but would add to the number of people seeking medical attention from primary care doctors.

State Health Officer Don Williamson said that in the short term, an expansion would lead to longer wait times at the offices of doctors where Medicaid is accepted.

“An insurance card is not the same as guaranteed access to health care,” Williamson said.


Dr. Jean Ferdinand, a Heflin physician, isn’t deterred by the possibility of more patients waiting for the current supply of Medicaid doctors.

“We need to expand, because we have people without insurance who aren’t getting care,” he said. “They’re dying.”

Ferdinand said the best solution to recruiting more Medicaid doctors is to increase the reimbursement for doctors who take Medicaid.

That’s not likely to happen soon. In budget hearings in Montgomery, the idea of actually decreasing the reimbursement has been mentioned as a possible cost-saving measure, but it’s only one of a number of options being discussed.

In recent years, the state has begun programs to recruit and train more doctors who are committed to work in Alabama. Williamson, the health director, warned it could take some time for those programs to have an effect on the physician population. Medical school, he noted, takes a long time.

“If you’re trying to fill the gap that exists, you’re looking at a seven- to 10-year lead time,” he said.

UAB’s Becker says the doctor shortage, while real, may just be a bump in the road. A similar problem was predicted in Massachusetts, the first state to adopt an Obamacare-like system.

“The evidence in Massachusetts is that the shortage wasn’t as bad as people predicted,” he said. “It’s something that can be managed.”

There’s a chance the state could face a worsened doctor shortage without the Medicaid expansion, Becker said, as Medicaid providers leave the state in favor of other states with a broader patient base. A lot would depend on whether neighboring states expand the system, he noted.

Costly sniffles

Jim Carnes said the Medicaid expansion, if it happened, could save the government money — and help working people with low incomes — by giving more people a chance to see a doctor regularly.

“If you have insurance, you don’t go to the emergency room with the sniffles,” said Carnes, a member of the Medicaid Advisory Commission, appointed by the governor to recommend changes to Medicaid. Carnes, who works for the group Alabama Arise, was appointed to the board to represent Medicaid consumers.

When uninsured people do go to emergency rooms, the hospital helps them, and Medicaid reimburses the hospitals. But under the Affordable Care Act, those payments, known as “disproportionate share,” will shrink.

Morrisey said the smaller disproportionate share payments were intended to go hand-in-hand with Medicaid expansion.

“There cuts go into effect whether we expand Medicaid or not,” Morrisey said. “Without expansion, hospitals will see the same number of uninsured patients, but will be paid less.”

How much less? UAB’s Becker said hospitals could be out $250 million by 2020 if Medicaid doesn’t expand.

The gap will be a “huge issue” for hospitals, said UAB’s Becker.

Attempts to reach officials of Regional Medical Center and Stringfellow Memorial Hospital in Anniston for comment on the change were unsuccessful.

Rosemary Blackmon, spokeswoman for the Alabama Hospital Association, said the disproportionate share issue is something hospitals are concerned about. The association has asked the governor to expand Medicaid, though she said the group recognizes that Bentley isn’t likely to do that without Medicaid reform.

Blackmon said the reform proposal currently on the table — reorganizing the program into regional sections that run like managed care organizations — could reduce at least some of the demand on emergency rooms. That program would provide more case management for Medicaid patients, ideally directing them to primary-care doctors when they might otherwise go to the ER.

“It links providers together to give them more coordinated care,” she said.

Becker, of UAB, said Bentley’s proposed reforms seem to make sense. Becker is from Oregon, the state Bentley’s reforms were modeled on, and he said the system works. Still, he wonders why the state doesn’t reform and expand at the same time. The federal government will pick up the full tab for the expansion only through 2016, he said, which means a delay could cause the state to miss years when the state cost of expansion is minimal.

“In practical terms, if you’re going to expand, it makes no sense not to expand in the first three years,” he said.

Capitol & statewide correspondent: 256-294-4193. On Twitter @TLockette_Star.

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