News Story

Medicaid Pays Below What It Costs To Take Care of Patients

Video highlights real issues with Medicaid expansion in Michigan

Dr. Donald Condit is an orthopedic surgeon who specializes in hand abnormalities. He would like to accept more patients on Medicaid but says he can't because the costs are too high and the reimbursements too low.

"Medicaid pays us way below what it costs us to take care of [patients]," Condit said.

He said Medicaid reimbursements are 22 cents to 25 cents on the dollar compared to what it costs to take care of a patient. Since office overhead alone is 30 percent to 50 percent, it puts a lot of pressure on doctors to stop accepting patients on Medicaid.

Gov. Rick Snyder, some state Republicans and state Democrats want to expand Medicaid coverage in Michigan, which is a key provision toward implementing Obamacare.

Dr. Condit discusses in the video below why eliminating specialty care is a costly mistake and what the nation needs to do make health care affordable again.

"The answer is to have people participating more in the cost of their care," Dr. Condid said. "It's not more government involvement ... it's individuals being more responsible for their health care."

Opponents of Medicaid expansion in Michigan point to studies that show the program has little effect on health outcomes. Physicians in the state and around the nation point to other policy options like state health plans providing catastrophic care and Health Savings Accounts.

A study on the program in Oregon published by the New England Journal of Medicine found "no significant effect" of Medicaid coverage in important health areas.

Meanwhile, other states, like Indiana, offer plans that inject more competition into the system, saving money while offering better coverage. Health policy experts also point to Direct Primary Care models, which establishes lower overhead for medical providers.


Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.