An Unwelcome Medicaid Surprise


This from the Chicago Tribune:

An unwelcome surprise from the Cook County health system

What surprise could that be?  Well, remember all those people protesting why some states are not increasing their Medicaid rolls?  The argument was that the government was going to pay the state for it so why not take it?  I have even seen Facebook petitions trying to stir up support for this travesty.  Now for some hard proof.  Here are the salient points from the Tribune’s article:

  • CountyCare — that’s Cook County’s attempt to leverage federal dollars through a Medicaid managed care program — is in a heap of trouble. Expenses outstripped revenues by $21 million in the first six months of the county’s fiscal year, through May 31. The shortfall is expected to grow to $63.5 million by the end of the fiscal year, Nov. 30. That’s driving a projected $85.9 million shortfall in the 2014 Cook County budget.

  • Next year looks grim, too: Cook County Board President Toni Preckwinkle projects a $168.9 million deficit for the county in fiscal 2015, which starts Dec. 1, including a $50 million deficit in the health care system.

  • But the financial failings of CountyCare and the questionable hiring and elevation of Shannon ought to force everyone to ask: What’s going on here?

  • Raju started a major restructuring of the health system to boost patient care and reduce the demand on taxpayers to subsidize that health system. It held great promise.

  • But health officials say CountyCare is running unexpected deficits.

  • Why were they blindsided? Shannon tells us that “the population that we’re taking care of was truly terra incognita,” meaning it was difficult to predict how and when these newly insured patients — many with serious, untreated chronic conditions — would seek care. The county also hired more staff to meet demand.

  • CountyCare was designed to bring in an early haul from the federal government as the Affordable Care Act provided Medicaid eligibility for more people. It did bring a haul: The county reaped $137 million for the more than 90,000 CountyCare patients in the first six months of fiscal 2014.

  • Those patients were required to use CountyCare clinics and other facilities. That will change in January, when those patients will be free to enroll in other health plans and choose other providers.

  • That creates an unknown: CountyCare treatment is costing more than expected, but if too many patients leave CountyCare, the public health system could wind up treating only those patients with the most complex, expensive health issues, including many who have no insurance. The financial picture could get even worse.

  • “We have a health system that has not always kept up with developments, the use of technologies, different things to help us be more effective,” Shannon tells us. “We’ve been on an old-fashioned model, an old chassis. We need to change that so we have more effective and efficient clinical operations.”

  • Shannon has the opportunity now to do that. If he doesn’t succeed, taxpayers are going to be left feeling pretty sick.

This is just one city’s result.  This will happen everywhere once you expand Medicaid.  Medicaid is broken.  Doctor’s do not take it because it pays pennies not the dollar.  These patients then use the ER and the result is the above.  So, to all those people who read this and have gotten mad at their governor for not taking Medicaid money from the government, now you know why.  Expand Medicaid and the “taxpayers are going to be left feeling pretty sick”.  Actually, VERY sick.


Douglas Farrago MD

Douglas Farrago MD is a full-time practicing family doc in Forest, Va. He started Forest Direct Primary Care where he takes no insurance and bills patients a monthly fee. He is board certified in the specialty of Family Practice. He is the inventor of a product called the Knee Saver which is currently in the Baseball Hall of Fame. The Knee Saver and its knock-offs are worn by many major league baseball catchers. He is also the inventor of the CryoHelmet used by athletes for head injuries as well as migraine sufferers. Dr. Farrago is the author of four books, two of which are the top two most popular DPC books. From 2001 – 2011, Dr. Farrago was the editor and creator of the Placebo Journal which ran for 10 full years. Described as the Mad Magazine for doctors, he and the Placebo Journal were featured in the Washington Post, US News and World Report, the AP, and the NY Times. Dr. Farrago is also the editor of the blog Authentic Medicine which was born out of concern about where the direction of healthcare is heading and the belief that the wrong people are in charge. This blog has been going daily for more than 15 years Article about Dr. Farrago in Doximity Email Dr. Farrago – [email protected] 

  4 comments for “An Unwelcome Medicaid Surprise

  1. Jerry
    July 23, 2014 at 11:55 am

    Let me caution you on using Chicago’s Cook County Health System as a comparison to what might happen to other states who take the federal Medicaid money. Having worked in health care and lived in Chicago all of my life until six years ago, I must tell you that as with most other city and county services, the health care system is rife with political influence, corruption, graft, nepotism and more inefficiency than elsewhere. I firmly believe that most other states would make better use of the Medicaid money than Illinois, particularly Cook County.

  2. Pat
    July 18, 2014 at 9:25 am

    Of course this ran grossly over-budget, and it’s a “surprise” only to those who take it on faith that Medicaid (and Medicare) are good ideas which simply must exist because … Well, because.

    Shannon stating that part of the problem is their health system not keeping up with the latest technologies is an absolute joke. The problem is unrestrained demand. The Medicaid population will always gobble up as much services as it can; no, not every individual patient, but it’s an accurate generalization, particularly in an urban area with relatively easier proximity to said services.

    This is the same bait-and-switch used for EMR’s and quality-based payments. The mark – local gov’ts, individual doctors, health groups, hospitals – is conned with the idea of more money for just a little more work – which turns into so much more work that even the extra cash (if it ever shows up) is swallowed into deficit.

    This will all get worse and worse nationwide until, make no mistake about it, the federal gov’t begins to force states to force doctors to see welfare patients. That is coming soon.

  3. July 18, 2014 at 6:46 am

    Our state had played with the concept of tying medical licensure to accepting Medicaid patients. A certain percentage of one’s panel had to be Medicaid patients. Imagine recruiting patients who can pay pennies on the dollar! That’s next.

    • politovski
      July 18, 2014 at 10:51 am

      or you will just have to see them gratis and suck it up….that is what i am predicting….

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