MIAMI – In the parallel moral universe where the proponents, practitioners, and profiteers of privatization evidently live, it must make perfect sense to begin a huge and perilous experiment in social engineering – no less than the wholesale dismantling of Medicaid* as we have known it for decades – with the most vulnerable as the guinea pigs.

The privatization of Medicaid in Florida and elsewhere has nothing to do with providing high-quality long-term care.
The privatization of Medicaid in Florida and elsewhere has nothing to do with providing high-quality long-term care.

I am referring to the imminent implementation of the first phase of Florida’s plan to turn over three million Medicaid clients currently served by the state to private sector “managed care” providers. As Friday’s Miami Herald reports, “Florida health officials are launching Medicaid reform [sic] with the long-term care population, most of whom are elderly and frail and receive daily living assistance….” Altogether, this group amounts to 90,000 people.

The state’s objective for its Medicaid privatization scheme is to lower costs while maintaining or improving the quality of care. But Linda Quick, president of the South Florida Hospital and Health Care Association, told the Herald that “We don’t know whether or not it can be done any less expensively than it’s being done.”

Quick should have more faith in the magic of the marketplace. Of course it can be done at a lower cost; in fact, it must be done more cheaply so that the private providers can reap rich profits from the fixed amount of money the state will give them for each client, regardless of need.

What is preposterous is the idea that long-term care can be provided at a lower cost while turning a profit and maintaining or improving the quality of care. That’s an exercise not in the magic of the market but in magical mathematics.

The reality is that the state may incur lower costs and providers reap good profits but only at the expense of the quality and quantity of care for some of the most helpless people in our society.

The truth is that, as is the case of health care in general, private companies have no secret formula for lowering the cost of long-term care. For instance, private health insurers have much higher administrative costs than the government-run Medicare program. Thus private insurance delivers less or inferior care for the buck than Medicare. In fact, much of their administrative costs derive from fierce battles to deny care and ensure profits. Exorbitant executive salaries and advertising costs also take a big bite.

The privatization of Medicaid is bound to lead to similar results. It’s not as if the people who care for the elderly in nursing homes and other facilities make big money or sit on their hands. They do tough, tiring labor, day or night, for little pay. So where will the savings come from? The answer is obvious.

Kicking off the transition from a state-run to a privately-run Medicaid program with long-term care cases would be funny if it weren’t tragic. Among other things, starting this week these frail and elderly individuals are being asked to choose from seven different available private plans. Seven!

Even for a well-educated person of sound body and mind it would be an overwhelming task, filled with uncertainty, a dearth of reliable information, and anxiety. Imagine a person with reduced physical and mental faculties or, in a significant number of cases, outright dementia, being asked to make such a choice.

There would seem to be no logic here. Yet there is. An American anthropologist has suggested there are two kinds of logic at work in the system. Under one form of logic, ordinary logic, none of this makes any sense. But that’s not necessarily the case under the second kind of logic, pecuniary logic, a logic under which money trumps all.

It turns out that proportionate to the number of people served long-term care costs the state more than any other component of Medicaid. What better place to squeeze out savings and profits. An added bonus is that many long-term care clients are in no condition to advocate effectively for themselves. Go for the low-hanging fruit first.

The privatization of Medicaid in Florida and elsewhere has nothing to do with providing high-quality long-term care in particular or good health care in general. Rather, it’s about more efficiently monetizing the human miseries of illness and ageing for private profit and to save the state money with which to subsidize special interests and keep taxes on the rich virtually non-existent.

* Medicaid is the United States health program for families and individuals with low income and resources. The Health Insurance Association of America describes Medicaid as a “government insurance program for persons of all ages whose income and resources are insufficient to pay for health care.”

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