Games people play

February 18, 2011

“We share a common belief that America’s long-term fiscal gap is unsustainable,” the members of the National Commission on Fiscal Responsibility (the Bowles-Simpson commission) recently declared. “If left unchecked, will see our children and grandchildren living in a poorer, weaker nation. … Every modest sacrifice we refuse to make today only forces far greater sacrifices of hope and opportunity upon the next generation.”

For those of you who can bear to look, the U.S. debt clock is here.

One of the commission’s observations was that “many states finance a portion of their Medicaid spending by imposing taxes on the very same health care providers who are paid by the Medicaid program, increasing payments to those providers by the same amount and then using that additional ‘spending’ to increase their federal match.” Indeed, Oklahoma is presently attempting to do this. Several reports have put the proposed tax at two percent, but the Oklahoma City Chamber of Commerce says “the proposal is designed to assess hospitals a fee of approximately two (capped at four) percent of annual net patient revenue.” Approximately two. Maybe double that. Whatever.

In any case, the commission’s recommendation is this: “Eliminate state gaming of Medicaid tax gimmick.”

Now at first blush it may seem odd that the Republicans who control the Oklahoma legislature would resort to gimmickry in an attempt to game the system—and for no better reason than to prop up a dysfunctional, single-payer system that is almost certainly the worst health plan in America. It starts to make more sense, however, when one realizes that many hospital folks (often Republican donors) have a vested interested in bigger government.

"The party of 'small government' has already in earnest expanded their government offices," state Rep. Al McAffrey (D-Oklahoma City) wrote last month in another context. "This coming session we will continue to witness the unraveling of conservative principles in the face of political opportunities." One hopes Republicans aren’t intent on proving him right. But if they are, one hopes they would at least promise us this: The hospitals won’t take this new expense and pass it along to patients. Just as CNBC’s Rick Santelli struck a chord with his rant that responsible people shouldn’t be forced to bail out irresponsible people, Oklahomans who pay for their own health care don’t want to pay higher medical costs so that politicians can expand welfare programs.

Oklahomans have been assured that the hospitals won’t pass along the costs, but of course you’ll forgive us if we’d like something in writing. Legislators should include an amendment which says that, annually, no more than 90 days following June 30 of each year, each hospital paying the provider tax must undergo an independent audit of its revenues, and the basis and description of the charges used to arrive at those revenues. The amendment should also specify some sanction if the auditor discovers that the hospital did indeed pass along the costs to patients.

Since hospitals are not going to pass along the costs, this simple amendment shouldn’t be a problem.