One reason why Medicaid isn’t so good is that many doctors won’t actually accept Medicaid patients.
If you rely upon the health insurance system for the poor, you’ll likely not be able to get medical treatment in many places. Seeing as medical coverage is designed to provide access to treatment when needed, the system doesn’t seem to work all that well. This is not a good thing. After all, a bit of bad luck, and one of us could be relying on Medicaid.
One asserted issue is that provider payment rates are too low for doctors to want to provide treatment under Medicaid. There could be truth to this. And yet, recent research tells us this might not be the actual problem.
If someone says they’ll pay you $100 and there’s only a 50/50 chance that they will do so, the expected return is $50, which is where Medicaid has another problem.
Combining these costs with the revenue never collected, we estimate that physicians lose 16% of Medicaid revenue to billing problems, compared with 7% for Medicare, and 4% for commercial payers.
This is not because the government intentionally stiffs doctors. It’s because the process to claim payment is so constipated with bureaucracy that much of it never gets to the doctors. It’s not that Uncle Sam doesn’t have enough money to pay the bills. It’s that he can’t do so in a timely fashion.
What does this mean for the future of a single-payer system?
Take note of the Veterans Affairs hospital system, for example. The VA is the only area in which the U.S. has a single provider system. The government pays not simply for the hospitals and doctors. It does so directly. The Clinton administration tried to reform the VA and truly sort it out. There’s now a general agreement that this needs to be done again, only a generation later.
It is entirely true that our healthcare system can be improved. But reform in the direction of more government might not be all that sensible. After all, if the hospitals that the government actually runs aren’t so good, what’s it going to be like when they try to manage the entire system?
