Understanding the connect between poverty, health and healthcare

Editor's Note: Welcome to Medical Economics' blog section which features contributions from members of the medical community. These blogs are an opportunity for bloggers to engage with readers about a topic that is top of mind, whether it is practice management, experiences with patients, the industry, medicine in general, or healthcare reform. The series continues with this blog by Ken Fisher, MD, who is an internist/nephrologist in Kalamazoo, Michigan, a teacher, author ("Understanding Healthcare: A Historical Perspective") and co-founder of Michigan Chapter Free Market Medicine Association. The views expressed in these blogs are those of their respective contributors and do not represent the views of Medical Economics or UBM Medica.

Population health, as described by our federal government via the Centers for Disease Control and Prevention (CDC), is a state of complete physical, mental, and social well-being and not just the absence of sickness or frailty.  The CDC has semi-quantitated these components:

1)     Genes and Biology

2)     Health Behaviors

3)     Social Environment

4)     Physical Environment

5)     Medical Care

Focusing on number five, medical care is the maintenance or improvement of health via the diagnosis, treatment, and prevention of disease, illness, injury, and other physical and mental impairments in human beings by health professionals. The CDC estimates that only about 20% of a population’s health is affected by health care.  Yet, one of the reasons for the HITECH Act of 2009 was the need for physicians to report myriads of data to facilitate improvement in population health. 

Dr. Fisher

It is now well documented that these reporting requirements are causing a dramatic decrease in patient-physician face time that is leading to inferior care and physician burnout.  The recent passage of the Medicare and Chip Reauthorization Act (MACRA) when in full effect, by increasing reporting demands will further compromise patient care.

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As population health is determined by the aggregate of individual health this will negatively affect the entire population, directly in contradistinction of an original goal of the 2009 law.

But how should we be addressing the broader issue of population health?  As behavior, social and physical environment are the greatest determinants of population health, these factors are more related to poverty than to healthcare.  There exists in this country the “war on poverty”, a serious of laws passed by Congress and signed by president Lyndon Johnson in the mid nineteen sixties. In sum it had two goals: meeting minimal material needs of the disadvantaged and decreasing their numbers over time. 

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The material needs aspect has been accomplished.  Decreasing the numbers of impoverished has proven much more difficult. Poverty rates reached a high of 22.4% in 1959 to a low of 11.1% in 1973 with today’s supplemental poverty rate of 14.3%.

This despite approximately 20 trillion dollars spent on this “war” since its inception and now about one trillion dollars annually.  This number can be misleading, as the largest and fastest growing component is the healthcare program Medicaid.  Federal and state costs for this program are over 550 billion dollars annually. 

The program now covers about 72.5 million Americans and is expected to increase over the next few years.  “In all states, Medicaid provides health coverage for some low-income people, families and children, pregnant women, the elderly, and people with disabilities. In some states the program covers all low-income adults below a certain income level.”

 So why are so many millions of Americans in poverty? 

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Certainly, some are victims of circumstances beyond their control.  But for many it is because they (or the family) cannot earn an adequate income in this now worldwide industrial economy.  We are now faced with a colossal irony. The more we spend on Medicaid (healthcare) the less we can spend on the necessary education to break this poverty cycle and its effect on health. 

Adding to this predicament is that several studies have documented that Medicaid does NOT improve healthcare and with low payments many physicians refuse Medicaid patients thereby forcing emergency room use.

Is it possible to spend less on Medicaid and improve care? In the Healthy Indiana Medicaid pilot, a payment model not a benefit, funds were deposited into a health savings account along with a catastrophic insurance plan for each individual; this was wildly successful and resulted in significantly better care.  This pilot was terminated by the Obama administration in 2011.

Using simple math with $550 billion per year and 72.5 million participants in Medicaid, this could amount to about $7,500 deposited into each individual’s health account, more than enough to purchase catastrophic insurance for this mostly young and healthy population.  This account would also fund routine care and direct physician contracts.  Experience with health savings accounts have shown decreases in spending of about 30%.  Thus with experience we could deliver better care at far less cost.

Saving resources now spent on the Medicaid program while still providing care would allow us to address the root causes of social, economic and behavioral issues that are most important in determining our citizens’ health. We could devote more funds to adequately educating and preparing this population to be more prosperous.