Separate and unequal: It’s time to invest in Medicaid

Health equity is the key principle to strengthening the delivery of this country’s health services. The question — and the opportunity — is whether we can turn health equity from a nice sounding idea to a national achievement.

Here’s a simple idea: Create parity for underserved communities. Pay doctors who treat Medicaid patients at the same rates that Medicare pays them.

While health care providers widely accept the federally administered Medicare program, Medicaid — public insurance for the poor — is a different story. In many states, Medicaid pays providers a fraction of what Medicare and commercial insurance pay. As a result, these communities are health care deserts. Medicaid patients search to find doctors willing to treat them, wait months for appointments, and go without services that would prevent the progression of disease, making them needlessly sicker. Medicaid becomes a system of illusory benefits when care is delayed and denied. The results of this separate and unequal structure are evident in poor health outcomes in Black and Brown communities. 

Administered state by state, Medicaid strategies vary, as states attempt to balance tough choices and stay within their budgets. Regardless of the strategy — limiting the number of people covered, services covered, or rates paid to providers for their services — patients end up on the losing end of these policy decisions.

California has long made a trade-off between expansiveness of coverage (those who are included in coverage and the services that are covered) and provider payments. The ranks of those who are covered are large and inclusive. The range of services covered by the program is also generous. This is beneficial for populations that have no other options — but too often, care remains inaccessible.  

Medi-Cal, California’s version of Medicaid, offers the third-lowest provider payment rates in the nation. An efficient, integrated health system like Kaiser is losing $1.8 billion annually on its Medi-Cal patients. How can a healthcare system like mine, that treats an entire Medicaid community, afford to treat them? 

California Advancing and Innovating Medi-Cal, the state’s most recent version of Medicaid, aims to reduce health disparities by funding non-clinical interventions that address social determinants of health, like affordable housing. It also expands eligibility to make health coverage in California nearly universal. These are laudatory goals that should be replicated across the nation. However, these changes will not improve access to and quality of services if provider payments remain low, especially in communities of concentrated poverty where providers cannot subsidize Medicaid losses with higher payments from Medicare and commercial insurance. Without investment in providers, health equity cannot be achieved.  

Our South Los Angeles community has a gap of 1,300 physicians. The diabetes rate is three times the state average and life expectancy 10 years shorter.  Diabetic amputations are among the most frequently performed surgical procedures at our hospital. Lacking access to community-based providers, over 100,000 patients visit our emergency department annually. Almost 50 percent of these patients could be treated in urgent care or a doctor’s office. For hospitals serving communities with sufficient access to services, this number ranges from 12 percent to 20 percent.

Disparities in payment drive this reality. At MLK Community Hospital, we receive about $2,000 from commercial insurance for an emergency department visit. Medicare pays $650 for the same visit. Medi-Cal provides $150. While safety-net hospitals receive supplemental funding for inpatient care — care that responds to conditions in crisis — no supplements are available for doctors offering community-based care that could prevent a crisis. 

Every community deserves integrated health systems that provide access to the full continuum of health-promoting services, from prevention and disease management to crisis averting. To achieve this, we have to get past the barrier of inadequate payment.  

Our nation is emerging from a pandemic that shined a light on the vulnerability of communities like South Los Angeles. A lifelong lack of access to healthcare drove disparate COVID-19 outcomes. Investment in communities highly dependent on Medicaid can change this picture for the future.

Creating parity in Medicaid calls for work many say is impossible to accomplish. It is long past time for us to prioritize the needs of the people who depend on it for care.

Elaine Batchlor, MD, MPH, is CEO of MLK Community Healthcare and MLK Community Hospital in South Los Angeles.