NC losing funding and savings with Medicaid holdout

In medicine, the small things can matter most. And it is the neglect of the small things that can lead to the biggest costs.

That’s why preventative care is so important and early intervention so significant. And that’s why North Carolina’s stubborn refusal to expand Medicaid is so wildly irresponsible and hugely expensive. As a result of its intransigence, the Republican-led General Assembly is struggling to find tax revenue on one end and turning away billions of dollars on the other.

For perspective, consider an announcement last week from the North Carolina Community Care Networks, the physician-led nonprofit that helps manage how people use the state’s $14 billion Medicaid program. In 2011, Community Care launched a statewide effort to improve maternal and infant health in the Medicaid program, which pays for just over half of the state’s 118,000 annual births. Thanks to that special focus, babies born weighing less than 5.5 pounds decreased from 11.06 percent of all births to 10.53 percent. That’s a rare instance in which a rising curve in an expensive area of medical care has not only been slowed but bent downward. And that’s a savings for taxpayers.

Lower costs, better lives

Community Care said in a news release: “The medical costs for low-birth-weight babies average $49,000 in a baby’s first year of life, or more than 10 times more than babies born without complications. A low birth weight also increases a child’s risk for long-term medical and developmental complications and the likelihood of incurring additional expenses for social services and educational needs in later years.”

Kate Berrien, manager of Community Care’s pregnancy project, said North Carolina now leads the South in having the fewest births before 39 weeks. That’s a lot of savings and a vast increase in the quality of life for many children born to low-income mothers. And it’s an achievement attributable to innovations in community-level care that were developed in North Carolina and are being adopted across the nation.

It’s a win-win situation. Tom Wroth, CCNC’s chief medical officer, said, “We've been able to align improving clinical quality with lower cost.”

But Community Care’s achievement is also cause for frustration. How much more medical expense could Community Care prevent if the program were able to serve the more than 400,000 uninsured North Carolinians who would gain health insurance if the state expanded Medicaid? How many amputations caused by uncontrolled diabetes could be prevented? How many strokes resulting from untreated hypertension would not occur? How many indigent patients would be treated early with an outpatient visit rather than requiring a costly hospitalization later?

These costs in dollars and human suffering are impossible to calculate, but they are very high. And, as the program for pregnant women shows, early medical advice and coordinated care can greatly reduce costs.

Turning down $50 billion

Meanwhile, the cost in lost federal funding by refusing to expand Medicaid is all too clear. A report last year compiled by the Urban Institute for the Robert Wood Johnson Foundation provided the numbers for 24 states that have not expanded Medicaid. That group has since shrunk to 22 states with six of them now considering expansion.

The report estimates that forgoing federal Medicaid expansion from 2013 to 2022 will cost North Carolina $39.6 billion. In addition, the state’s hospitals will lose out on $11.3 billion in federal funds intended to offset cuts in their Medicare and Medicaid reimbursements as required under the Affordable Care Act, which anticipated that all states would expand Medicaid.

That’s more than $50 billion in federal funding forgone over 10 years. Meanwhile, the state would have to spend about $3 billion for its share of expansion. That is a mindboggling deal to refuse so that conservatives can express their pique over “Obamacare.”

Republican leaders say they’re worried about being saddled with a higher entitlement cost if the federal government reneges on its promise to pay its full share, but the design and history of Medicaid do does not support that concern. Meanwhile, there are billions of reasons to expand Medicaid now.