In the news
Legislature must fix Medicaid reimbursement inequities, by Dr. Nick
Turkal and Timothy W. Sullivan
Milwaukee Journal Sentinel guest editorial, Nov. 11, 2007
State officials left $400 million in federal money on the table when they passed the new budget bill – money that would help pay for health care for the poor while easing a significant burden on Wisconsin businesses. It’s now time for the Legislature to seize this opportunity.
Medicaid is a federal-state partnership that provides health care for low-income individuals and families. In Wisconsin, the program is grossly under-funded, reimbursing hospitals less than half of what it costs to provide care. The result is cost-shifting to patients who have commercial health insurance, and this constitutes a huge hidden tax on employers and consumers.
Medicaid reimbursements in Wisconsin have not increased in 12 years as policymakers in Madison ignored the growing problem, and Wisconsin now ranks near the bottom among the states in reimbursement levels. This situation is simply unsustainable.
The hospital assessment proposed by the governor and revised during state budget deliberations would have allowed Wisconsin to capture $400 million in additional federal money for Medicaid. Regrettably, this worthy effort to pay for care for the disadvantaged became a bargaining chip in last month’s budget mayhem and was sacrificed. Politics, in the end, affects people.
The $400 million that was left on the table included $165 million that would have flowed to southeastern Wisconsin – money to help support the “safety net” hospitals in the Milwaukee area that care for many people enrolled in Medicaid. Without meaningful Medicaid payment increases, these hospitals are at great risk.
The Wisconsin Hospital Association calculates that the Medicaid shortfall for Wisconsin hospitals totaled $2.98 billion over the last 12 years. In 2006 alone, the shortfall for Milwaukee area hospitals totaled $205 million. Most of that cost presumably was shifted to employers and consumers through higher insurance premiums – the so-called hidden tax. That is just not right.
This enormous hidden tax continues to threaten the competitiveness of Wisconsin businesses and burdens hard-working people who are struggling to pay for the rising cost of health insurance.
Opponents of the hospital assessment have wrongly labeled it a tax on the sick. It is no such thing. It is a reasonable way to leverage additional federal support for our most vulnerable patients and at the same time reduce the cost-shifting that has long been a chronic problem for Wisconsin’s health care system. This idea received the support of health care providers, the Greater Milwaukee Committee and the Metropolitan Milwaukee Association of Commerce.
A hospital assessment is one way to address this problem. There certainly are others. Whatever approach is taken, state officials must act quickly. The situation is critical, and we simply cannot let another biennium pass without a solution.
Providing adequate support for Medicaid is a fundamental responsibility of state government, like the funding of education, transportation and other vital needs.
Medicaid shortfalls are a major driver of health care costs in Wisconsin. Wisconsin citizens and businesses expect their state officials to address this problem, and to do so now.
Nick Turkal, MD, is president and chief executive officer of Aurora Health Care. Timothy W. Sullivan is president and chief executive officer of Bucyrus International, Inc.