The Politics Being Played In Louisiana’s Medicaid Fake ‘Crisis’

It’s important to understand that the concern voiced by Louisiana legislators over impending reductions in funds coming to the state’s charity hospitals has much more to do with their political careers than it does any reasonable worry that care for the uninsured or Medicaid clients will deteriorate significantly.
Monday, a number of legislators queried officials of the Gov. Bobby Jindal Administration about large reductions, nearly a quarter of the budget for the state’s charity hospital system, run by the Louisiana State University System, due to an unexpected clawback of the federal government of excess monies being sent the state’s way for Medicaid. The enabling legislation not yet a month old, they seemed unaware that Rome was not built in a day and pressed for details on specific cuts. Absent that, some lapsed into encounter group mode and testified about their feelings on this matter.
These, for the most part, revolved around a scenario of people clamoring for care that would be unable to access it at the facilities of the country’s only state-run hospital system for the care of the indigent, leading both to swamping non-state facilities or abandoning their quests to have medical attention for their hangnails or whatever else might ail them. Naturally, this dystopian view has next to no relation to reality.
First, it is a myth that the uninsured loosen a barrage onto hospital emergency rooms. In fact, it is not the uninsured who over-utilize hospitals as primary care vehicles – they are only slightly more likely to use them as privately-insured folk – but Medicaid patients. And in a state whose policy until recently was to encourage Medicaid clients to visit its own hospitals, this would exaggerate even more this inefficient tendency. But with the advent of the Bayou Health program that steers deliberately about three-quarters of all Medicaid clients to non-state primary care givers outside of hospitals of any ownership, this should decrease demand on hospitals. Which is all well and good because hospitals aren’t there to provide primary care, only the far fewer cases where more intense medicine needs to be practiced.
Second, worries about cuts taking services offline leading to a supply shortage are unfounded. Relatively speaking, Louisiana is one of the most over-bedded states in the nation regarding hospitals, with only eight states smaller in population and the District of Columbia having more per capita. Utilization is even more exaggerated, where the state ranks in the top five in hospital admissions, ranks fourth for admissions by state-owned facilities, yet only 15th in outpatient visits (which still is significantly above every other state in the south and west). All of this adds up to a portrait of one of two things: either Louisiana’s population is significantly less healthy than those of states around it, or cultural norms encourage over-utilization of health services and disproportionately in the direction of the most expensive, least efficient delivery.
The latter seems much more likely, and signals that a cultural shift beginning with Bayou Health will make provision more efficient with a move away from using government facilities. Therefore, cuts can be made to complement incentives that take away overcapacity that tempts inefficient overutilization, all without any real decline in access or quality.
Still, and third, legislators might argue specific geographical areas might be impacted adversely. But most of the state’s charity hospitals are in urban areas with plenty of alternatives for care beyond primary. In fact, with the exception of the greater New Orleans area still suffering the ravages of the hurricane disasters of 2005, all of these areas have number of beds per capita well above the national average (2.9 per 1,000 in 2010). Any plan that LSU comes up with can strategically pare back beds, a little less so with emergency room services perhaps, and shunt primary care away from state hospitals, without significant reduction in care available. As long as the money-follows-the-person model is used and propagated, care will be available.
Of course, the optimal strategy would be to get the state out of the direct provision of care all together, which means keeping only the (coming soon) New Orleans and Shreveport facilities (and maybe one of the facilities such as in Bogalusa that instructs in rural health care) devoted to teaching. Then markets could produce much better the actual supply needed. This would mean selling off at least a half a dozen facilities – but which would require legislative approval. And it’s here we come to understand the actual concerns on legislators.
With there being no real crisis with the ratcheting back of state supply of services, their real brooding comes because of the impact the cuts could have on their political careers, specifically regarding two constituencies. The more numerous but, interestingly, least likely to respond to political cues are the clients of state hospitals, mostly the uninsured or on Medicaid. While their demographic profiles suggest they are the least likely to participate in politics, they are many and some will.
The other constituency is much smaller in number but more intensely participates in politics, those who work in these facilities. Populism is fading in Louisiana but still has potency, and thus the idea that the state needs to be in the business of direct jobs provision dies hard, in health care, prisons, and other areas. Those therefore directly affected by cutbacks or closures/privatization often resist vigorously change good for the state as a whole and particularly taxpayers, but which would bring turmoil to their lives.

So, legislators have to present at least an appearance of concern to mollify these two groups. The ones with surer grasp of the facts will know it’s just lip service, while for others whose careers and/or mentalities are more invested in populism it’s not just appearance but genuine, if misplaced, passion. Either way and added all up, the squeals heard from them on this issue reflect political sources. As for the basis of the complaints, evidence shows that, with a careful and considered response by the Jindal Administration but which certainly could be improved by a willingness by legislators to close facilities, they remain without merit.

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