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Medicaid Hurts The Poor, The Physicians and The Taxpayers

By: Alieta Eck, M.D.,

In 1821, Josiah Quincy, a legislator in Massachusetts noted that the poor are of two classes. 1) Those who are wholly incapable of work-- through old age, infancy, and sickness and 2) the able poor-- those who are capable of work. At first he believed that the government was a perfectly reasonable deliverer of help to the first category, but soon learned that there was no good formula to determine who belonged in which group. He stated, "Society is incapable to fix any standard, or to prescribe any rule by which the claim of right to the benefit of the public provision shall absolutely be determined."

A great case can be made for the government to get out of the business of charity. While it seems like a compassionate answer to poverty, there are many reasons why it does harm on every level. While this has been debated since the establishment of the United States, the downside of the Medicaid system could never be clearer than now.

Medicaid hurts the poor. It causes them to become despondent and idle, promising them free care only if they remain that way. When people no longer need to rely on their own foresight and industry, their poverty is worsened and becomes permanent.

For example, last week I met a 47 year old woman who has managed to secure public support due to her disability. She drinks a six-pack of beer and smokes 2 packs of cigarettes per day. As long as an impersonal check is in the mail, she seems to have no incentive to improve her lot-- and depression and an unmotivated boyfriend keep her miserable.

Medicaid hurts the physicians. As budgets are tightened they are the first to receive lowered payments, and most have found that they can no longer continue to meet their own obligations when participating in the program. It is not that physicians are hard-hearted toward the poor. They just realize that they will be of no use to anyone if they cannot sustain their practices and must close their doors. So they wind up avoiding the program and treating the poor for free.

Medicaid hurts the taxpayers. The ever increasing burden has reached the tipping point. It is bankrupting the states that then look to a bankrupt federal government for more help. The federal government is now running an unsustainable $1.65 trillion/year deficit, some likening it to a train heading for a cliff. The Medicaid system consumes up to 25% of every state budget and becomes a black hole for taxpayer dollars -- dollars that disappear into a huge unaccountable bureaucracy.

Medicaid attracts scoundrels. "Federally qualified clinics" can apply for $650,000 in federal start-up money, get "enhanced Medicaid payments," and are awarded free medical malpractice coverage from the federal government, competing with local physicians who ironically must pay the taxes to fund them. Furthermore it appears that, since money flows from many sources, accountability and oversight are lax. One FQC has government income totaling $14 million and sees 25,000 patients per year. The administrators are very handsomely compensated. A nearby non-government clinic, utilizing all volunteers and private donations sees 3,600 patients for a total budget of $58,000, 300 times less expensive.

The question of whether government ought to fund charity is not a new one. In 1853, Rev. William Ruffner noted that "charity is a work requiring great tenderness and sympathy, and agents who do their work for a price rather than love, should not be trusted to execute the wishes of donors. The keepers of poor-houses fall into a business, unfeeling way of doing their duties, which is wounding and often partial and cruel to the objects of their attention."

Why should the taxpayers be funding a system that demoralizes and hurts the poor? When will we question the wisdom of government charity? The poor will be better served when the Medicaid system is ended and the community rises up to lift them out of their conditions. Real charity is individualized, assertive, challenging, and gradual.

The NJ Volunteer Physician Protection Act is being considered whereby physicians will be compensated only by state medical malpractice protection for their entire practices when they donate four hours a week to care for the poor in non-government free clinics. These clinics will cost the taxpayer nothing, but will be funded by the decreased tax burden and the generosity of caring people who are close to the problem. America will be America once again.

Reader Comments (12)

Excellent point. Remember Davy Crockett almost lost his re-election because he voted for money to be given to charity and it angered some voters. The growth in spending could be greatly diminished by Congress getting back its basic duties as outlined in the Constitution.

Very well stated! With your opening paragraphs, you explained a very delicate topic, namely the problem with "government-provided charity," in an excellent and thoughtful manner. You then proceeded with great examples of the many downsides within the Medicaid system. And finally, the idea for non-government free clinics is certainly appealing.
I will definitely link your article on our website and further investigate your solution.
Great Job!

April 14, 2011 | Unregistered CommenterLisa Bobay PA-C

I think it is unreasonable to think that there is no need for Medicaid. Your author seems to have no thought to the poor whom find themselves in need through no fault of their own? I do not think anyone in the United States of America should be denied healthcare because they do not have enough money to pay!
That is my opinion, and I am willing to pay more taxes so this can continue - does it need tweeking? Perhaps, but overall it is a viatal and necessary part of a civilized society -- I think it is deplorable to send mentally and physically ill to the streets to fend or die, not to mention it makes some neighborhood somewhere less safe and comfortable for the property/home owners, right ?

April 14, 2011 | Unregistered CommenterMary D.

Yes. A similar approach would be to give a tax-credit for care given to any patient unable to pay, in addition to the insurance you suggest: With a tax-credit, care could be given in one's own office or in a hospital...

@Mary, The question is not whether or not there are legitimate needy people to whom we as human beings have a moral duty to protect and support. I commend you for your charitable qualities and desires to help the poor. The question, instead, is whether the governement is a viable agent for charity. Collections for the needy at the point of a gun is extortion and not charity. Government's are lousy at asset collection and redistribution.

April 14, 2011 | Unregistered CommenterJames Oakman, MD

The notion that getting medical care, even in the form of Medicaid, is absurd at best and a political talking point (again poorly developed) at worst. So the poor become "despondent and idle?" You think that untreated illness would make them feel warm and fuzzy? You think that just maybe being stuck in poverty watching the wing nut tea baggers doing everything they can to destroy the social safety net might just lead to despondent feelings?

April 14, 2011 | Unregistered CommenterBill Guenther

Well stated. But let's start by cleaning our own house. Many doctors I know graduated from state run universities. They didn't pay a fair market price for their education, and took government subsidies instead. Of course they support Medicaid and the welfare state. They started their careers as "medical welfare recipients." It is time to do away with the public university system and all the socialists that they graduate. Then, we can finally move towards a sustainable free market society!

April 14, 2011 | Unregistered CommenterPaul Adler, MD

Dr. Eck, I especially liked these portions:

"Society is incapable to fix any standard, or to prescribe any rule by which the claim of right to the benefit of the public provision shall absolutely be determined."

Real charity is individualized, assertive, challenging, and gradual.

April 15, 2011 | Unregistered CommenterPatrick

Bill Guenther .... those political comments added NOTHING to an intelligent discussion about the role of government. Try MSNBC website.

I agree with you about the ultimate damage that undeserved charity does to society. However, people who have developed a dependency on the system will not be willing to get off so easily. Some of these people do vote and, as you know, people vote selfishly with their hearts and not their brains. The part about the clinics being costless due to tax breaks will not be shared by the government. In the eyes of the government, money not collected is money lost. That money lost is somehow transformed into money cost.

April 15, 2011 | Unregistered Commenterisaac

What we are doing now is definitely not working. Something else needs to be tried. These people were not dying in the streets before Medicaid. By the way, to the critics; how many people on Medicaid have you taken care of? How many poor people have you helped for absolutely nothing? I have see and taken care of thousands of them, including ones I took care of without ever billing anyone at all - I just gave them my own time, effort, money.

April 17, 2011 | Unregistered CommenterTR

As a clinical social worker, working at a non-profit community mental health center, all our clients were unable to manage their lives without professional help. Being unable to manage their lives means, for example, being so depressed that they were unable to hold a job. In addition to psychotherapy, they needed financial support, which only our government could provide. It was cost-efficient, too, because it helped our clients to become stable, responsible, tax-paying citizens.

Yes, there were a few people who took advantage of the system. They are a significant minority. What I have learned is that the insurance companies, who were supposed to pay for medical help for those clients who were employed and could afford private insurance, did not do so. The private insurance companies denied payment for pre-existing conditions, denied payment for medical treatment that lasted longer than 6 months, denied payment for essential but costly services; and they also raised their co-pay rates so high that the insured person couldn't afford treatment, forcing the community mental health center to cover the costs, and increasing the profits of the private insurance companies. Now that is outrageous and is worthy of your protest.

Individuals or corporations who would like to support the poor, the needy, the downtrodden, yadda-yadda may do so--and without a government dictate to do so. Wise policy makers will make it attractive for people to do that, thus getting government out of the equation: Provide big tax credits for doctors, hospitals and donors who give to the poor.

But don't expect that to happen; it removes the political class (who vote for such a solution) from the issue, and with it the money they control and the power they wield. And a politician without power or money is exposed as the zero he or she actually is.

May 9, 2011 | Unregistered CommenterJeff

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