Thursday, October 8, 2009

Does Medicaid offer a glimpse into the future of American medicine?

Last week, my wife, a pediatrician, gave a patient a prescription for compounded Tamiflu -- that is, the preparation of a children's dose of the anti-viral drug by breaking down adult-dose capsules and turning them into a liquid suspension. The Swine flu scare has made children's Tamiflu scarce, so compounding is often the only way of getting the drug for kids. Before handing the patient the prescription, my wife's office checked with the insurer to make sure it would pay for compounded Tamiflu. Reassured that the drug was covered, the patient went to get the drug compounded at the only pharmacy in the area that will do the job (Wal-Mart, if you're interested).

Of course, when the pharmacy went to put the prescription through, the insurer refused to pay. Twice.

Oh, no, not another health insurance company horror story! Well, yes it is -- but with a twist. You see, the insurer was AHCCCS -- Arizona's implementation of Medicaid -- a government program that may provide us all with a peek at the future of American medicine.

The problem was cleared up quickly enough once my wife heard about it. She set her staff to work calling the AHCCCS offices and demanding approval of the prescription. The government employees were all apologies and soon authorized compensation for the patient, who had already paid out of pocket.

But that's the way it always is. My wife and her staff play a frequent game of "guess what AHCCCS will pay for today" that has turned them into constant phone pals with bureaucrats down in Phoenix. The AHCCCS people are almost always polite and usually concede the point.

But this happens over and over again.

Tamiflu wasn't approved for use at all just a few weeks ago, even after the CDC recommended the drug for treating Swine flu. Sure enough, my wife (and other doctors, I'm sure) got on the horn and AHCCCS added Tamiflu to the formulary -- the list of drugs for which it would pay.

Yes, she does this from time to time with the private insurers too -- they're no saints, and occasional arm-twisting is required. But not with such regularity as with AHCCCS, and not to the extent that it seems a system is at work.

If there is a system, it's not a system for refusing care and treatment. It's a system for making it a little more difficult to get things paid for -- unless somebody with savvy runs interference. But most physicians' offices don't provide this kind of value-added advocacy service. It's expensive to have staffers on the phone arguing with Medicaid bureaucrats, none of whom can be fingered as a specific villain in any given case. And without savvy advocates, medications and treatments don't get approved. Not incidentally, I'm sure, such how-did-that-happen refusals to pay for even pre-approved care, spread out across the entire system, must represent a fairly substantial cost saving.

This shouldn't come as a surprise. Medicaid is, after all, a political health-care system, rather than a commercial one. It doesn't just charge for services and raise rates as needed; it's given a certain budget to work with, and somehow it has to jam all the demands upon its resources within the limits of that budget. That's not easy.

In countries where politically run health-care systems are the norm, the cost-control measures are more overt. The Los Angeles Times recently published an article about the budget strains to which the government-run health-care system is subject in British Columbia, and the accommodations it has made in response.
Provincial officials recently announced a $360-million shortfall in the $15.7-billion healthcare budget for the fiscal year that ends in March.

The shortage will mean fewer surgeries and longer waits.

The Vancouver Island Health Authority has said it would reduce the number of nonemergency MRIs by 20%; nonemergency patients now are being booked for scans in March.

Vancouver Coastal Health, which serves a quarter of the province's population, said it would eliminate 450 elective surgeries, about 30% of the schedule, during the four weeks of the 2010 Winter Olympics.

And in the rapidly growing suburbs east of Vancouver, the Fraser Health Authority plans to close its spending gap by, among other things, holding the number of MRIs to last year's total, ending $550,000 in service programs for senior citizens and reducing elective surgeries by about 14%.
How do you control costs in a politically run health-care system? You announce "this much care and no more." Ironically, that leaves one woman described in the article crossing the border and paying out-of-pocket for hip surgery in the U.S. to escape a year-and-a-half long waiting list, and has spurred the establishment of technically illegal private surgery centers in the province at a time when many Americans are touting the advantages of government-run systems like Canadian Medicare.

And like Arizona's AHCCCS.

Americans aren't yet ready to face the hard choices that are made by politically run health care systems. That's why we get one unexplained denial after another instead of hard limits on care as a matter of policy. But, when Americans wise up to the fact that state-run medicine has a hard-nosed attitude toward cost control, they're likely to discover that doctors like my wife can't always fix the problem.



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