Fruit of the Womb
Fruit of the Womb

Medicaid Funding Cuts

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I work in the State of South Carolina. Yesterday was a bleak day for me (and should be an embarrassment to the state) and speaks to the short-sightedness of people who sit in positions of power with regard to their understanding of the economics of providing sensible health care in the U.S. today. A few weeks ago we were informed by the State Medicaid office that due to budget shortfalls, reimbursement for Medicaid patients was going to be cut across the board by about 3%. To make that blow a little more palatable, we were also told that the cuts would be “equitably distributed.” Yesterday those cuts took effect. They were not equitably distributed – $200.00 in reimbursement was cut from every delivery (16.7%).

The silent response to the announcement has been deafening, proving once again that women, children, and providers of services to those who need it most can be counted upon to offer little resistance to legislative decisions that affect the most critical stages of human development – at least in states like South Carolina. Of course, the legislature conveniently timed the move to just as they closed session for the year and the cuts have barely been publicized in the press or newscasts. Again, it is amazing to me how tacitly this irresponsible legislative decision has been received. However, as I found out yesterday, not many providers are even aware of the cuts and/or the impact of the same on their practices. And yet, more than 50% of the prenatal care delivered in the State of South Carolina is covered by Medicaid.

Let me explain why my ranting and raving is justified. The State of South Carolina has one of the highest rates for premature delivery, teen pregnancy, sexually transmitted infections (including HIV), obesity in teens and young adults, and pregnancy complications related to all of the above. The proposed cuts will impact access to care in the patient population in which it has been proven repeatedly that every dollar spent can save the health care system 2- to 3-fold the investment. No thought was given to the nature or the impact of the cuts. The cuts are not value driven or based on needs assessment, they are simply ‘across the board’

Currently, my department is the largest obstetrical Medicaid provider in the state – almost 3000 deliveries per year. Multiply $200.00 times 3000 deliveries and you will see the immediate impact on my department ($600,000). Counted among those patients are a large number of unfunded “self pay” patients (approximately 850 per year) to whom we also provide care, mostly for free, until the time of delivery when we can submit a claim for “emergency Medicaid” for the delivery fee alone (none of the prenatal care). Many of these unfunded (mostly Hispanic) patients receive the same high level of prenatal care as do patients who qualify for Medicaid throughout their pregnancies on the front end. However, they require high levels of resource utilization in terms of provider and staff time/effort and the added expense of interpreters. This is an extremely high-risk group for maternal, fetal, and neonatal complications. If we limit their access to care in our clinic (which may be our only solution to the budget cuts for us at this point), the cost to the State of South Carolina will also bury any perceived savings.

Community providers may also use these reductions as a reason to abandon the care of Medicaid patients completely. This was a lesson learned the hard way by the state several years ago. Obstetrical providers, particularly in rural communities, do not receive sufficient reimbursement to cover the expense to their practices for OB patients (the many office visits and phone calls, the hours spent with the patient in labor, the same reimbursement regardless of time spent and mode of delivery, not to mention LIABILITY insurance premium for OB providers). In the absence of prenatal care, these patients will still end up on our doorstep with increased morbidity, hospital costs, and lengths of stay. They will utilize already over-burdened and expensive emergency room facilities for their ”prenatal care.” Indeed, any perceived ‘savings’ to the state will be readily negated by the effects of reduced access to care. In addition, it does not take many extremely premature babies, admitted to the neonatal intensive care units as the result of these short-sighted and irresponsible measures, to incur expenses many times this amount, initially, with the risk of these children being a long-term burden to the health care system at multiples of the initial expense.

Perhaps the most compelling reason for reversing the decision to cut state funding for Medicaid is the loss of federal matching funds. Currently, the government provides a match of about $3.00 for every dollar spent by the state – in other words, by cutting $28.5 million in state funding, the total loss of health care dollars to the State of South Carolina is about $90,000,000.00! Including the state cuts, the total LOSS for prenatal, peripartum, and child care is then $120,000,000!!! The public needs to be informed and understand these issues as well because in the end we will all will incur the financial burden of these short-sighted actions.

Legal challenges to such cuts are possible, but in the end, sensible legislative action will be the only solution. Legislators must be appraised of the issues detailed above and educated to understand that money spent in prenatal care and women’s and children’s services is an investment and not a burden to health care cost containment. For too long, we have spent a disproportionate share of health care dollars caring for the problems later in life that might have been prevented by adequate education, nutrition, physical education, and health care funding prenatally and early in life.
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About the Author

Dr. Trofatter is an expert on maternal-fetal medicine.

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