The complexities of Medicaid often contribute to the confusion of the program. Here, we break down some of the numbers for Mississippi Medicaid.
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In a three-hour-long public health committee hearing Monday, lawmakers sought to answer the question: Can health care operate in a free market?
The Legislature is considering changes to laws that require health care providers to receive a “certificate of need” from the state to buy certain equipment or offer certain services.
The certificate is designed in part to prevent health systems from overexpanding and passing along the costs of expensive and underutilized equipment to patients.
Medical professionals, lobbyists and free-market economists packed the Capitol committee room Monday as lawmakers argued the benefit of more competition in health care.
“The logic of free market, it just doesn’t exist in health care. It just doesn’t,” said Dr. John Fitzpatrick, Hattiesburg Clinic’s board chairman.
Rep. Robert Foster, R-Hernando, one of the Legislature’s staunchest opponents of certificate of need laws, retorted: “You’re trying to say health costs are fixed; that you have no control over what your payment is or what your reimbursement is from Medicaid … It’s directly related to the fact that we do not have competition.”
In unison, health professionals across the room shook their heads, including State Health Officer Mary Currier.
“Repeal of the certificate of need would remove an important planning tool from the health care economy. Absent regulation, economic Darwinism would unleash a torrent of free market forces risking the equilibrium of supply and demand. We would see, unquestionably, an increase in the cost to Medicaid,” said Mississippi Healthcare Association’s attorney John Maxey. “There is little dispute unrestrained investment in high cost health care facilities would concentrate in population centers, leaving rural consumers to struggle for ready access to health care services.”
Sen. Brice Wiggins, R-Pascagoula, pushed back, pointing out that the state’s Medicaid budget has ballooned in the last decade to over $1 billion.
If certificate of need laws were designed to regulate costs, “apparently the CON is not working,” Wiggins said.
“I can’t accept that statement,” Maxey said.
Some of the lawmakers’ skepticism comes from the fact that existing providers — hospitals, clinics, nursing homes — could lose patients if other providers were able to locate near them.
“Is it not true you have a direct stake in keeping the status quo because y’all have monopolies in these industries?” Foster asked Maxey.
“I’m just a dumb farmer. I’m not a Phi Beta Kappa from a Harvard or Yale or some other fancy college, but I understand basic economics. I’m a business man. If one guy is the only guy in town selling, it’s going to be really expensive. And he doesn’t want anybody else to come in town so he’s going to come up before us and give us all types of information saying the sky’s going to fall, poor people aren’t going to have access to care … if you do away with us having the ability to have a monopoly. Well, that doesn’t make any sense.”
Matt Mitchell, senior researcher for the free-market focused research group Mercatus Center, provided recent data to the committee comparing states with certificates of need laws to those without.
Mitchell said that in general, states with certificate of need requirements have fewer hospitals, therefore a lack of access, and higher costs for individuals services than states without.
“It’s possible CONs could restrict total spending but only doing so by denying access to services,” Mitchell said.
Rep. Jarvis Dortch, D-Jackson, compared an unrestricted health care system to retail in Jackson, which is migrating more and more to surrounding counties Madison and Rankin where the tax base is greater.
“The CON is supposed to bridge that gap so hospitals aren’t just placed in more affluent areas,” Dortch said.
Currier noted the evidence and arguments on both sides of the issue, saying, “It just depends on how you look at it.”
While Richi Lesley, Fresenius Medical Care market development director, presented to legislators, the fact that Mississippi appears at the bottom of nearly every health-related ranking hung in the air.
Centers for Medicare and Medicaid Services rates Fresenius’ dialysis centers significantly higher quality than surrounding states, including states without certificates of need, Lesley stated, which “attests that what Mississippi is doing works.”
“Y’all claim your CMS ratings are so great and they’re better than all these other states that have no CONs,” Foster said. “I don’t care anything about your CMS ratings; the only thing that matters to me is that they all have healthier people in their states than we do. Every one of them. We’re 50th — 50th — in health in the entire country.”
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Free market influences health care conversation