June 22, 2018
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MaineCare facts, moral dilemmas and unintended consequences

By Jonathan Sprague, president, Rocky Coast Consulting

Maine is facing profound economic and moral challenges as we consider MaineCare. Issues of societal trust, governmental accountability and community values are significant. Maine cannot move forward without greater scrutiny of expenditures. There are undeniable budget deficits and a need for fiscal responsibility. No state can sustain spending a third of its budget on Medicaid.

It is inappropriate to lay the burden of responsibility for failures on any one administration or Legislature. Hundreds of good people have tried to help Maine’s most at-risk citizens. Nonetheless, mistakes, poor decisions, failures of leadership and ineptitude are legend and overwhelming in their frequency. We have to break this cycle; however, current discussions perpetuate it.

There must be serious, disciplined analysis and debate. The lack of any meaningful analysis of the impacts of budget cuts is distressing. The results will be fraught with unintended consequences. That this could occur should scare us and invoke a loud outcry to elected officials.

The best example of mistaken assumptions is that the projected effects of budget cuts are fundamentally flawed. Let’s assume that the state spends $1 on eligible Medicaid services. The federal government will give us approximately $2. We can then buy $3 worth of health care. As spending ripples through communities, for example as wages are spent on local services, the effects are multiplied approximately 2.2 times.

Thus, our $1 investment turns into $6.60 worth of economic activity. Economic activity is taxed through personal and corporate income taxes and sales taxes. If we assume that we might recover 15 percent of our $6.60, we would gain back $.99. The net cost to the state, to buy $3 worth of health care and to generate $6.60 worth of economic activity, would be one cent!

If the governor and Legislature estimate Maine will save $220 million by cutting the budget, but really save 1 percent, this is a $217,800,000 mistake. The DHHS’s budget will appear more balanced, but the long-term losses in revenues will become unplanned budget deficits elsewhere.

In the meantime, we will have compromised the health and safety of 65,000 citizens, lost hundreds of jobs, destroyed assisted living centers, increased health care and insurance costs and transferred the responsibility for millions of dollars of uncompensated care to health care providers.

If the federal Medicaid match is reduced or unavailable for some services, and we only recover 80 percent, the overall logic remains. This should not be so difficult to understand.

Medicaid is a “mainstream” health improvement program, not a welfare program. In Maine, we have been proud of neighbors helping neighbors. It is in our blood; it is our culture.

By far, our neighbors are not irresponsible people, nor are they bent on gaming the system. Most are people who struggle mightily. In many cases, they are our moms and dads, who built our society, and who now have spent down their savings to the point where they are impoverished. Our generation needs to act responsibly to protect them. This is an ethical and moral imperative.

We must seize the moral high ground and hold it. To do less is to accept the erosion of our social compact with those who need our help.

We will not build a better business climate by reducing dental care, behavioral health services for children or physical therapy. We will not create a business-friendly state on the backs of great-grandparents, as we go back on our promises and break trust.

We must consider eligibility, root out fraud, avoid unnecessary services, relentlessly drive out inefficiencies and achieve evidence-based outcomes. We must assure that we are getting the right services to the right people, at the right cost and quality, in the right places and at the right times.

Simultaneously, we must fix badly broken administrative systems and build new models of care and financing that better integrate medical, behavioral health and oral health services. We must wring precious resources from wasted spending.

These are the necessary steps to affording MaineCare. These changes are difficult, but essential to avoiding further harm to already weakened citizens. The way to achieve these ends will not be found in rushed and uninformed decision-making or in partisan politics. Together we must fill the holes with other resources, not slash and burn; then we must fix the MaineCare program.

Jonathan Sprague, a native of Bangor, is president of Rocky Coast Consulting, a Maine-based, national health care management consulting firm. He was the chairman of the National Rural Health Association’s Medicaid work group and a primary author of the NRHA’s policy on Medicaid in Rural America and an author of the Maine State Rural Health Plan. He can be reached at JonathanSprague@RockyCoastConsulting.com

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