Medicaid is a Failure Because…?

Many Americans have been hearing the statement “Medicaid is a failure because doctors and hospitals do not accept it” (along with other “Medicaid is a failure” statements) and you might have been wondering why the fifty-year-old Medicaid program is suddenly in the spotlight. Medicaid is a lean program that costs substantially less than private insurance to cover people of similar health status. It serves as a healthcare safety net for the poorest Americans composed of 9% elderly, 15% disabled, 27% adults, and 48% children.  The answer to the question of why Medicaid is in the spotlight  is simple.  Because of their desire to reverse all Democratic healthcare reform initiatives from the past fifty years, the Republicans in Washington have stepped up their political healthcare propaganda to sway the American people toward their agenda for small government.  Medicaid is the first government-sponsored healthcare program slated for the chopping block.

In their unsuccessful attempt at repealing Obamacare (PPACA) recently, the House Republicans’  American Health Care Act called for major defunding of the Medicaid program so that the richest Americans and  companies that profit from health spending could enjoy lower taxes.   To rally Americans to their agenda, the Republicans needed to convince Americans that “Medicaid is a failure” and therefore not worth keeping.  The Republican propaganda machine thus created and widely circulated this “Medicaid is a failure” statement.

Medicaid is a failure propaganda statementI call this example of political propaganda the failure because statement.  The “Medicaid is a failure because doctors and hospitals do not accept it” is one of many that fit this category of propaganda.  In its generic form, the statement is shown below.

[program to be targeted] is a failure because _________________________”

The political party using a failure because propaganda statement wants Americans to connect a program they wish to defund, repeal, or use for political gain with the word “failure”.   The “because” part of the statement is usually an observation that might resonate with many people but doesn’t explain why the program is in fact a failure.

Other examples of the “failure because” propaganda include the following:

  • “Medicare is a failure because the Medicare trust fund is going bankrupt”
  • “Obamacare is a failure because insurance companies are exiting the Health Insurance Marketplace”
  • “Veterans Health is a failure because patients have to wait too long for care”
  • “Obamacare is a failure because it is a Democratic and not a Republican initiative.” (I threw this one in for laughs)

You can see how easy it is to place any observation after the “because” given that no healthcare program, whether government-run or privately-run, is perfect. This propaganda statement would be more accurate if we substituted “Medicaid is imperfect” for “Medicaid is a failure”, but then it would not serve the purpose of condemning an entire program with one statement. Imperfect programs need improvement, not elimination.  This propaganda statement is like saying “If I do not get all A’s on my report card, then I am a failure”. Medicaid may not be a perfect program for the delivery of healthcare to our nation’s poorest Americans, but without a replacement (like a single payer, universal healthcare system), many people would suffer.

The Medicaid is a Failure Propaganda Discussion

The way to handle “failure because” propaganda is to zero in on the reason given for “Medicaid is a failure”; namely, “because doctors and hospitals do not accept it”. This is the part of the statement that needs further consideration. In addition to Medicaid, doctors and hospitals in the United States are free to accept or reject any health insurance plan including employer-sponsored, Medicare, TriCare, and non-group plans offered on or off the Health Insurance Marketplace. The fact that every doctor and hospital in the United States does not accept all insurance plans is a given in our private, for-profit healthcare system.

In the U.S. market-based healthcare system, doctors and hospitals have the right to maximize income and profits and have no obligation to accept every American that walks into their businesses.  Some doctors might be at maximum capacity and will reject all new patients while others prefer customers with the highest reimbursement rates to maximize income and profits.  Medicaid reimbursement rates are some of the lowest while employer-sponsored plans are some of the highest.  If a doctor feels confident that enough customers with employer-sponsored health insurance will seek his services, he will gladly say no to potentially new Medicaid patients.  Therefore the fact that doctors and hospitals do not accept Medicaid patients is not an indictment on the Medicaid program, but simply a result of “follow the money” in our for-profit healthcare system.

Doctors and hospitals also prefer health insurance plans that demand the least amount of oversight (i.e., monitoring that care is appropriate and cost-effective). State-administered Medicaid programs are particularly watchful in making sure that treatment is the least amount needed and necessary.  This higher oversight negatively impacts income and profits further.   Dr. Tom Price, the Secretary of Health and Human Services, calls oversight “interfering with the doctor-patient relationship”.   Doctors and hospitals will accept less favorable financial arrangements only if they do not have enough patients at the highest reimbursement/least oversight groups (usually found with employer-sponsored plans).

Summary of Medicaid is a failure Propaganda

The fact that doctors and hospitals do not accept Medicaid is not because Medicaid is a failure. In our market-based healthcare system, doctors and hospitals are for-profit businesses and have the right to maximize their income and profits and reject customers who do not pay enough or who demand too much oversight for the care delivered.   Medicaid program reimbursements are lower than other health insurance plans and the state-administered Medicaid programs demand greater cost-effective care in return.  Doctors and hospitals will accept less favorable financial arrangements only if they do not have enough patients at the highest reimbursement/least oversight groups (usually found with employer-sponsored plans).


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