How Medicaid mission creep undermines real health care

Most doctors, myself included, know that a patient’s zip code predicts his or her life expectancy. National life expectancy would undoubtedly climb with less poverty and more low-cost nutritious food, stable housing, sanitation and exercise. But it’s a mistake to assume the health care system can fix these societal issues.

The federal government wants Medicaid to ameliorate “social determinants of health” (SDOH). Unfortunately, using an agency designed to finance medical care for the poor to instead address a broad range of complex social problems has led to “mission creep.” It’s simply not feasible.

For example, in a recent roadmap from the Centers for Medicare and Medicaid Services (CMS), states are tasked with addressing “social, economic, and environmental factors that affect the health outcomes of Medicaid and CHIP populations.” Programs should seek to improve “access to nutritious food, affordable and accessible housing, quality education, and opportunities for meaningful employment.” That’s asking a lot of a financing program.

Some states are eager to oblige. New York recently proposed using Medicaid to remove health obstacles such as “poverty, discrimination, and their consequences, including powerlessness and a lack of access to good jobs with fair pay, quality education and housing, safe environments, and health care.” California’s new CalAIM project provides housing support and employment assistance for Medicaid beneficiaries. The actual provision of health care seems almost an afterthought.

These proposals are like trying to boil the ocean. New York’s states that Medicaid should account for “all the physical and behavioral health and social factors impacting a patient.” There are already many government departments with large budgets specifically tasked with these things. Every listed SDOH already has its own federal and state-level government agency.

Simply because someone’s housing affects their life expectancy doesn’t mean a department of housing and urban development should become subservient to Medicaid, or that they must duplicate efforts. Coordination, not duplication, is what’s needed.

Patients sign up for health insurance to see a doctor when they get sick, not for a voucher for the farmers’ market. The U.S. health care system does the “taking care of sick patients” part pretty well. It’s not responsible for the country’s poor life expectancy. We excel in treating major illnesses, cancers and traumas.

Mission creep will unintentionally damage the very areas in which U.S. health care excels. A ballooning bureaucracy already includes an ever-increasing number of employees (largely administrators) to treat the same number of patients. Asking doctors, hospitals and Medicaid administrators to tackle employment, housing, education, discrimination and the environment will only make things more difficult, especially with an underfunded and overstretched Medicaid.

Medicaid’s growth is already unsustainable, having covered just 6.8 percent of the population in 1970 and over 25 percent in 2020 (consuming 3.3 percent of GDP). Additionally, Medicaid takes up an average of 16 percent of state budgets. These numbers pre-date the COVID-19 pandemic, which has seen a surge in enrollment and expenditure.

Mission creep also means more metric fixation. The so-called “value-based payment” (VBP) has been infiltrating medicine for over a decade now, and CMS now encourages it to address social factors. Intended to reward providers for quality care, VBP has proven rife with unintended consequences, such as worsened mortality from institutions attempting to meet statistical benchmarks. 

The U.S. government has already spent $1.3 billion developing metrics, and physician practices spend $15 billion annually reporting them. Institutions also spend money to game the metrics, so much that recorded “improvements” have been exposed as byproducts of coding risk adjustment. This ends up helping the most well-resourced institutions, while hospitals serving low-income patients fare the worst.

There are better ways to spend Medicaid’s scarce resources.

Start with payment parity. Compared to private insurance, Medicaid reimburses providers for treating its patients with pennies on the dollar. Those signing up for Medicaid seek access to doctors, nurses, hospitals and therapists. Underpaying providers undermines this access. Reimbursing frontline health care workers at a level showing the government’s commitment to Medicaid patients, rather than spending on other agencies’ responsibilities, must be the priority.

Second, instead of arbitrary metrics, Medicaid should put in place programs prioritizing patient choice. Over 75 percent of Medicaid beneficiaries have annual health care expenditures under $7,000. These low-cost patients could be covered by the private insurance market with relatively inexpensive subsidies or vouchers. 

In a highly competitive market with more financing options, these relatively healthy patients could choose a plan that addresses their individual needs. Some plans might even offer SDOH coverage. Letting patients choose whether their voucher dollars go toward SDOH is much more equitable than the forced approach.

Medicaid mission creep must be reversed. The system is already stretched thin. Low payment rates drive away providers. Increasing the burden on the program will make matters worse. Reform should come by prioritizing patient choice and bottom-up solutions. That is the true road to equity.

Anthony DiGiorgio, DO, MHA, is a neurosurgeon, assistant professor at the University of California, San Francisco School of Medicine and the author of upcoming research for the Mercatus Center at George Mason University. He is also affiliated faculty at the Institute for Health Policy Studies at UCSF.  Follow him on Twitter @DrDiGiorgio.