The Medicaid Program Has Roots in Segregation & Racial Hatred
Among economically wealthy and technologically advanced countries in the world, Medicaid is a medical system unique to the United States. The program was conceived and forced on the American people by segregationists in the Democratic Party during the Johnson Administration. Segregationist Congressman Wilbur Mills, powerful chairman of the House Ways & Means Committee in the 1950s and 60s, was able to hold President Johnson’s Medicare legislation hostage until he agreed to a poverty medical care system which gave states considerable power over administration of programming and qualifying criteria.
Segregationists from states such as Arkansas, Alabama, Georgia and other states of the deep South saw poverty medicine for which people would have to prove to a state agency that they were eligible, as a means for keeping poor people – especially poor African Americans – from receiving health care. In the 1960s, the segregationist South was still the agricultural South which relied on cheap labor. Furthermore, intense Jim Crow hatred of Southern African American citizens was incompatible with anything that might raise their status above a level of serfdom and humanize them. (See Jill Quadagno One Nation: Why the U.S Has No National Health Insurance, 2005, pp. 13-14; Gerard Boychuk, National Health Insurance in the United States and Canada: Race, Territory, and the Roots of Difference, 2008, pp. 59-79; my chapter “Implementation of Medicaid-Funded Long-Term Care: The Impact of Prior History on the Development of the Nursing Home Industry,” in Max Skidmore & Biko Koenig, Anti-Poverty Measures in America, 2019).
Medicaid is means-tested. Americans must prove that they are impoverished to qualify. This characteristic of the program has made state agencies and their bureaucrats the gateway to medical care for poor people who are required to experience the humiliating process of proving that they are too poor to get health care without government welfare. One’s poverty must be so deep that only the poorest of the poor can qualify. In most states, the program is stigmatizing as legislatures and bureaucracies pile on humiliating barriers such as “proof of looking for work,” drug testing, and other criteria that should have nothing to do with receiving needed medical care.
Funding for Long-term & Skilled Nursing (Nursing Homes)
It is often said that placing nursing home funding in Medicaid for individuals unable to self-pay the daily rate in most facilities – or have spent down their life savings until they are impoverished – was an afterthought – that there was no purpose or rationale to making it a Medicaid program. That was the position taken by Bruce Vladeck in his excellent but now outdated history of the system. (Unloving Care: The Nursing Home Tragedy, 1980). I don’t believe that.
It is my opinion that legislators like Mills and Senator Kerr from Oklahoma could foresee the major real estate industry that nursing home care would spawn. Privatization (corporatization) was well on it way when Congressman Mill and Senator Kerr conceived and were able to get the Kerr-Mills medical program for seniors through congress in 1960. It was also means-tested and was the precursor to Medicaid. Nursing homes care was an integral component of Kerr-Mills. Kerr had ties to the nursing home industry and Mills was an ardent believer in utilizing government funds and tax codes for incentivizing private economic expansion (as opposed to expansion of government, non-profit growth).
Medicaid has Become a Perverse Toxic Program that Enriches Investors & Corporate Executives
In December 2021, the Center for Medicaid & Medicare Services announced that Medicaid expenditures had reached $671 billion. A large proportion of these funds reimburse corporations for nursing home care, which is mostly substandard and despicable. Revenue for the industry includes not only the ample reimbursement member companies receive for patient care but also all of the capital gains from real estate which derives value from a license to operate a nursing home.
Although states and the federal government tolerate and even facilitate a veil of secrecy regarding finance and the flow of capital through lending institutions and from reimbursement, enough evidence can be found to suggest that substandard care is enriching corporations and executives. For instance, Welltower, a major Real Estate Investment Trust and operator of nursing homes paid its CEO $20 million in 2020. Investors in publicly listed nursing home related corporations have received high earnings during COVID. Stock of the publicly listed corporations in the business has continued to increase while the markets have been decreasing.
A huge amount of capital flowing through the Medicaid system isn’t reinvested in a better health care system. It is pocketed. Much of what is pocketed can’t be seen because the government allows investors in privately held companies hide their finances.
Another Commission to Study the Nursing Home System Isn’t the Answer
People who are appointed to prestigious commissions to study the nursing home system aren’t given to speaking truth to power. Indeed, appointing a group of academics and other professionals to a commission sponsored by the National Academy of Sciences and important foundations will not solve the problem we all have, i.e., dread of ever being in a nursing home.
It is very risky for most people on a commission to tell the truth, which is that the medical system in the United States is driven by greed. Money in politics is resulting in domination of government bureaucracies and legislators by the very people who need to be regulated. Money is power and has become an increasing factor in U.S. politics.
Recommendations to tweak this that or the other thing in a system so corrupt and inefficient that nothing less than total transformation will change much of anything will likely only reinforce that system. Recommendations to increase staffing will be resisted by the industry and frustrate advocates, unions, and the public because any change will be window dressing.
I don’t want to see a recommendation for “more transparency.” I want the privately held companies to open their books and provide the same information that publicly listed companies provide to the Securities and Exchange Commission. The truth of the matter is that the nursing home industry, indeed the entire health care industry, has become financialized. Taxpayers are not receiving the increase in productivity and quality that matches the tax dollars they are forced to pay for their own care.