There has been much ongoing political debate within Ohio about how to adequately fund education, roads and bridges, police and fire, and local government. Missing from this debate, however, is the reason these services are under threat.
Medicaid spending is increasingly “crowding-out” all other spending in the state budget. Since 1976, Medicaid spending has gone from 15 percent of the state budget to 29 percent today (counting federal transfer dollars, Medicaid spending is over 50 percent of the budget). During the same time, state spending on education has dropped from 61 percent to 51 percent. Since 2011, Ohio tax dollars spent on Medicaid have increased from $4.7 billion to an estimated $7.4 billion in 2017, an increase of over 57 percent. This massive spending increase comes not just from more people enrolling in the program — Medicaid spending per person vaulted from below $6,500 in 2011 to a projected $8,500 in 2017.
We have consistently poured money into an ever-expanding medical-industrial complex with a woeful return on taxpayer investment. Unfortunately, most policymakers have failed to analyze the unique nature of our healthcare system to understand the root causes of poor care and waste. Instead, over the past several decades, desperate calls to rein in Medicaid spending have resulted in simple, but relentless, cuts to provider reimbursements that are so low now that few providers accept Medicaid patients and, if they do, they dramatically limit the number. Increasingly, Medicaid patients are forced to seek care at expensive hospital emergency departments.
Diagnosing what is wrong with our healthcare system is only the first step — the next, much more important step, is to deliver the most likely cure. I could not agree more with Governor John Kasich when he recently said, “OK, if you don’t like it, bring us an alternative … bring something else, just don’t throw rocks through the windows.”
With assistance and support from many of my colleagues in the House of Representatives, I have sought to answer the governor’s call and offer an alternative to our current approach in healthcare. Accordingly, I recently introduced House Bill 157, a comprehensive healthcare reform bill that will improve the quality of medical care, reduce wasteful spending in Medicaid and in the overall healthcare system, and provide access to quality healthcare for vulnerable populations. In developing the bill, we began with the premise that we must understand healthcare economics before we can develop a system that encourages the best care and healthiest outcomes — a system with the right incentives for patients and providers alike.
Vitally important public policy decisions should be based on data, analysis, and metrics, not emotion. My colleagues and I crafted this bill with the best information at our disposal, some of which we drew from other states’ success. To ensure that quality healthcare for everyone remains within reach, we must reform the system so costs only rise with normal inflation, rather than with medical inflation. If the costs of services rise faster than inflation, eventually they will become unaffordable for everyone, starting with families and individuals with the tightest budgets.
To be clear, House Bill 157 does nothing to diminish Medicaid Expansion under the Affordable Care Act. Final decisions on that topic do not need to be made by the General Assembly until the end of 2016 because states start paying for a portion of the Expansion in 2017. However, I do not believe Medicaid Expansion, or the ACA as whole, was a good idea because it simply spends more money to cover people within our currently flawed system, without any serious additional reforms to ensure the system’s affordability and sustainability.
1. Empowers Medicaid recipients with Healthcare Savings Accounts, promotes independence, and provides incentives for healthy outcomes;
2. Reduces the practice of providers ordering unnecessary, and potentially harmful, tests and pills out of fear of getting sued;
3. Reduces preventable medical errors, estimated to be up to the third leading cause of death in the U.S.;
4. Offers price transparency at points of service so people become more cost conscious when comparing and shopping for medical services;
5. Incentivizes hospitals and Medicaid insurance companies to compete to provide the best health outcomes at the best price, and encourages the dedication of resources to care for patients instead of to improving non-essential infrastructure;
6. Lowers the price for pharmaceuticals and medical equipment by pooling our state’s population to increase Ohio’s purchasing power; and
7. Helps small businesses avoid unnecessary, expensive mandates so they can offer health insurance to their own employees.
By reducing wasteful spending in Medicaid and encouraging healthy outcomes for Ohio’s population as a whole, the potential savings from this legislation could be in the billions. House Bill 157 redirects some of the resulting savings in Medicaid spending to offer care to groups that remain underserved, such as veterans, the mentally ill, developmentally disabled, drug addicted and the working poor. Further savings that result from enacting this legislation can be used to help fund public education and other services, or the money can be returned to taxpayers.
Benjamin Franklin said, “The best public measures are seldom adopted from previous wisdom, but forced by the occasion.” The occasion, in this case, is unsustainable healthcare spending, poor health outcomes and low access to care. We cannot ignore the ever-increasing cost of healthcare in our state — not when data shows a 57 percent increase in Medicaid costs in only six years. For the preservation of all vital state services, the wisest course of action is to begin the work of reforming our healthcare system immediately.
Jim Butler (R-Oakwood) represents District 41 in the Ohio House of Representatives.