dr. byron schlomach - the aca in texas: do hospitals need medicaid expansion?

8/9/2019 Dr. Byron Schlomach - The ACA in Texas: Do Hospitals Need Medicaid Expansion?

1/21

Name

Title

MEDICAID EXPANSION:

Byron Schlomach

Director,

Center for Economic Prosperity

Just Dont Do It


2/21

Standard Wisdom

goldwaterinstitute.org

Im opposed to Obamacare, but we have togovern in the world we live in, not the world we

wish we live in.

Missouri Senator Ryan Silvey, R-Kansas City


3/21

Medicaid Mother Lode


$65.6 Billion over 10 years! (Urban Institute)

$6.6 Billion (2013) x 3 (multiplier) = $19.8 Billion

A Whopping 1.3 % of Texas GDP ($1,532 Billion)


4/21

H.L. Mencken


For people in the mass soon grow used to anything,

including even being swindled. There comes a time

when the patter of the quack becomes as natural

and as indubitable to their ears as the texts of

Holy Writ, and when that time comes it is a

dreadful job debamboozling them.


5/21

Exploding Debt with States to Blame


State governments

received 32.8 percent

of their total generalrevenues from transfers

from the federal

government in the

2012 fiscal year.

Tax Foundation

34.3 percent of Texas

current all-funds biennial

appropriation is funded by

transfers from the federal

government.


6/21

Why Not Expand Medicaid?


1. Our debt problem is bigger than our health care

payment problem.


7/21

Exploding Health Care Share


How much more do we need?

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

Health Care's Share of the U.S. Economy

Actual

If Med Inflation = CPI


8/21

Exploding Health Care Prices


When we debate health care policy, we seem to

jump right to the issue of who should pay the bills,

blowing past what should be the first question:

Why exactly are the bills so high?

Unlike those of almost any other area we can

think of, the dynamics of the medical

marketplace seem to be such that the advance

of technology has made medical care more

expensive, not less.


9/21

Third Party Payers in Health Care


0.8

1.3

1.8

2.3

10% 20% 30% 40% 50%

Ra

tio:MedicalPrices/Genera

lPrices

Share Health Expenditures Paid Out-of-Pocket

Medical Prices vs. the Share of Medical PaymentsOut-of-Pocket

19601966

1972

1986

Out-of-pocket share has fallen over time

Cost

has

risen

over

time

2006

Byron Schlomach, Removing the Middleman,

Goldwater Institute


10/21



2. Third Party Payers (Government and Insurance) are

the Problem NOT the Solution


payment problem.


11/21

Medicaids Labor Impact


Garthwaite, Gross, and Notowidigdo, Public Health

Insurance, Labor Supply, and Employment Lock,http://ldi.upenn.edu/uploads/media_items/public-health-insurance-labor-supply-and-employment-

lock.original.pdf

Dague, DeLeire, Leininger, The Effect of Public Insurance

Coverage for Childless Adults on Labor Supply, NBER working paper,

http://www.nber.org/papers/w20111


12/21




payment problem.



3. Medicaid has a negative effect on labor supply and GDP


13/21

Are Hospitals Really In Need?



14/21

All the Action is in Charity Care


Most Hospitals qualify people for charity care up to

200 percent of poverty

Medicaid Expansion only covers to 138 percent of

poverty

When hospitals claim large losses that Medicaidexpansion is supposed to help with, they usually include

Bad Debt


15/21

Truth About Hospital Charity Care


Of total revenues, charity care represents

In Arizona: 2 percent of revenue

Memorial Hermann: 4 percent of revenue

0%

10%

20%

30%

40%50%

60%

70%

80%

90%

100%

2008 2009 2010 2011 2012

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

2009 2010 2011 2012

Baylor University Medical Center - Dallas:4 percent of revenue


16/21

Non-profit Hospital Profits


Arkansas Hospitals Annual Average Profits 2007-2011

Arkansas Children's Hospital: $33,564,420

Baptist Medical Center: $16,430,648

St. Bernard's Medical Center: $9,259,227

Piney Ridge Center: $2,566,309White County Medical Center: $12,962,605

Washington Regional Hospital: $10,230,256

Arizona Hospitals 2011 Profits

Banner Health: $296,085,406

Casa Grand Regional: $6,740,705

Yavapai Regional: $30,795,934

Yuma Regional: $34,513,648


17/21

Non-profit Hospital Profits


-$50,000,000

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

2008 2009 2010 2011 2012

Memorial Hermann's Profits

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

2008 2009 2010 2011 2012

Baylor Univ Med Ctrs Profits


18/21

Non-Profit Hospital CEO Pay


$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

2008 2009 2010 2011 2012

Annual Pay of Memorial Hermann's CEO


19/21

Plenty of Money to Lobby



20/21




payment problem.



3. Medicaid has a negative effect on labor supply and GDP

4. Hospitals dont need the money and theyre lying

about cost shifting


21/21

Resources: Understanding Health Care


David Goldhill, How American Health Care Killed My Father, The Atlantic,

2009, http://www.theatlantic.com/magazine/archive/2009/09/how-

american-health-care-killed-my-father/307617/

Steve Brill, Bitter Pill: Why Medical Bills Are Killing Us, Time, 2013,http://www.uta.edu/faculty/story/2311/Misc/2013,2,26,MedicalCostsDeman

dAndGreed.pdf

Byron Schlomach, Removing the Middleman, Goldwater Institute, 2009,

http://goldwaterinstitute.org/sites/default/files/Removing%20the%20Middlem

an.pdf
http://www.theatlantic.com/magazine/archive/2009/09/how-american-health-care-killed-my-father/307617/http://www.theatlantic.com/magazine/archive/2009/09/how-american-health-care-killed-my-father/307617/http://www.theatlantic.com/magazine/archive/2009/09/how-american-health-care-killed-my-father/307617/http://www.uta.edu/faculty/story/2311/Misc/2013,2,26,MedicalCostsDemandAndGreed.pdfhttp://www.uta.edu/faculty/story/2311/Misc/2013,2,26,MedicalCostsDemandAndGreed.pdfhttp://www.uta.edu/faculty/story/2311/Misc/2013,2,26,MedicalCostsDemandAndGreed.pdfhttp://goldwaterinstitute.org/sites/default/files/Removing%20the%20Middleman.pdfhttp://goldwaterinstitute.org/sites/default/files/Removing%20the%20Middleman.pdfhttp://goldwaterinstitute.org/sites/default/files/Removing%20the%20Middleman.pdfhttp://goldwaterinstitute.org/sites/default/files/Removing%20the%20Middleman.pdfhttp://www.uta.edu/faculty/story/2311/Misc/2013,2,26,MedicalCostsDemandAndGreed.pdfhttp://www.theatlantic.com/magazine/archive/2009/09/how-american-health-care-killed-my-father/307617/

dr. byron schlomach - the aca in texas: do hospitals need medicaid expansion?

Documents