Mischievous Foundations?

Early in 2017, I became aware of a policy initiative by the Georgia Public Policy Foundation the gist of which was to expand Medicaid in Georgia to more beneficiaries while, simultaneously, reducing the total per person expenditure on Medicaid to $2500 per annum. The Foundation’s plan also purported to eliminate the burden of uncompensated care on Georgia providers, especially hospitals .

At the center of the Foundation’s proposal lay two health care finance components:  a state payment of $750 per year to provide for each Medicaid recipient an annual membership in a Direct Primary Care clinic, and a state payment of a $1750 annual premium for a insurance policy providing catastrophic coverage.

Since Medicaid expansion under the Affordable Care Act costs at the time of the Foundation’s proposal substantially exceeded $6000 annually per covered individual, since $1750 per annum can buy only coverage with a  deductible far beyond the means of any Medicaid recipient, and since the Foundation’s plan removed the burden of uncompensated care from providers, the Foundation’s proposal turned on obtaining very substantial cost savings effects of beneficiary participation in direct primary care.  Starting at articles and links on Foundation’s website, I examined the evidence that direct primary care might be able to reduce the medical costs for a Medicaid beneficiary from over $6000 to a mere $2500.

In 2017 and early 2018, I wrote a series of posts arguing that direct primary care had not been, and could not be, shown to have massive cost reduction effects. I’ve transferred those posts to this blog, some with corrections.

Around the time the Georgia Public Policy Foundation (GPPF) was floating its Medicaid DPC proposal, North Carolina’s John Locke Foundation (JLF) was advancing the position that state and local governments could similarly cut costs by putting its benefited employees into direct primary care clinics. Both GFFP and JLF are state level versions of the Heritage Foundation, and both relied on Heritage Foundation material addressing direct primary care.

All three foundations tend toward strong fiscal conservatism. Certainly, if direct primary care has real value in reducing the costs of medical care, it would make sense that all three foundations would get behind firmly behind direct primary care.  At the same time, even if direct primary care does not reduce the cost of providing care, it may nonetheless give the appearance of reducing the cost of providing care. Then, it can be used to justify lower government expenditures for the health of Medicaid recipients and government employees.

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