HEALTH CARE/Joan Retsinas

Healthcare Glitches: A Historical Perspective

Yikes! The computers are glitching! The Affordable Care Act is stalled! Progress is technologically too hard. We must rethink, reconfigure, retreat. Either our government is too inept to program this Act correctly, or the Act is unprogrammable.

After this period of technological lamentations – from the right, people screaming that Uncle Sam should step back – from the left, people wondering why Uncle Sam didn’t initially reach out to Google to run this shebang – let me hazard some historical perspective. Yes, social change is hard. Yes, more glitches will arise: from the cup to the lips is a long trek, with unforeseen blips. But think back to 1965 with the launch of Medicare, to see some real roadblocks.

In 1965, Congress granted hospital insurance – Medicare Part A – to everybody with a Social Security card. Since Uncle Sam was paying for those hospital stays, Uncle Sam exacted some minimal standards. It was too easy to have fly-by-night “hospitals” springing up. Besides, the architects of Medicare wanted patients to go to “quality” hospitals. At the time the hospitals had a national accrediting association, as they do today. But in 1965 roughly half the nation’s hospitals, many small ones, didn’t meet those standards (“full compliance”). In 1965, the year of the Voting Rights Act, America’s South divided into “white” and “colored” facilities. Those patently unequal facilities – schools as well as hospitals — were patently substandard. But the government could not simply reject all substandard hospitals. Too many patients would have found that their newly-issued Medicare cards were useless. The challenge was to prod all hospitals that wanted reimbursement from Medicare to improve. The government allowed a loophole: “substantial” compliance. Eventually, hospitals either closed or improved. And Medicare overrode that roadblock.

Nursing homes were more dismal. The hodgepodge included convalescent homes, board-and-care homes, and rest homes. Initially Medicare included a 100-day nursing home benefit. States were in charge of inspections. Bruce Vladeck in Unloving Care reported that only 760 nursing homes were “fully qualified,” with another 3,200 in “substantial compliance.” Almost 10,000 facilities did not even try to qualify for Medicare.

Congress charted a way around the dilemma via Medicaid. Medicaid allowed nursing home stays, with no time limits (but, admittedly, with income guidelines). Those Medicaid-qualified facilities did not need to meet the stringent standards of Medicare-qualified homes. They could meet lower standards, at lower costs. Thanks to the Miller Amendment, nursing homes could qualify as “intermediate-care facilities.”

As for Medicare’s nursing home benefit, the architects of the legislation made a major miscalculation. In this era of constant muckraking, the error would have sparked a Congressional hearing, with demands for top bureaucrats to resign. The architects assumed that the cheaper nursing home stays would substitute for costlier hospital stays – in short, that nursing home coverage would end up saving money. A year of data proved them wrong. The actual numbers forced the architects to rethink their wisdom: in Intermediary Letter 371 Medicare limited nursing home stays to patients needing skilled services (like tube feeding). That restriction remains.

Medicaid presented an administrative nightmare for many states. Previously, a handful of states had had experience administering health insurance programs for their poor elderly residents (Medical Assistance for the Aged). Kerr-Mills legislation had offered states from 50 to 80% matching federal funds, with no ceiling, to help with this population. California, New York, Massachusetts, Pennsylvania, and Minnesota tapped into most of the federal money. Many other states hardly participated. Mississippi and Georgia appropriated no state funds for this program. So Medicaid – which enforced a federal/state sharing to insure poor elderly – forced most states to change their modus operandi. With the Affordable Care Act, the minority of states that created their own “exchanges” suffered relatively few glitches.

In 1965 many elderly Americans did not have insurance, unless they had bought an indemnity policy that paid out in dollars, not in hospital stays or physician services. Many physicians participated in Blue Shield (tied to state Medical Societies), but had fought the socialistic prospect of Medicare. Some hospitals, as well as most nursing homes, failed quality thresholds. Yet citizens managed to sign up, as did physicians; hospitals and nursing homes managed to upgrade themselves; and states accepted the responsibility of overseeing Medicaid.

In a far less technologically-savvy era, the US overcame bigger glitches than computer foul-ups. We should be able to make the Affordable Care Act work.

Joan Retsinas is a sociologist who writes about health care in Providence, R.I. Email retsinas@verizon.net.

From The Progressive Populist, December 15, 2013