In a recent speech, Kentucky Republican Senate Candidate Rand Paul said that Medicaid is “intergenerational welfare.” His stated rationale was that coverage has spread beyond those “truly in need” and citing the fact that 800,000 people out of Kentucky’s approximately 4.314 million citizens (18.5%) were on Medicaid. Given Kentucky’s Medicaid eligibility requirement—$13,671 in annual household income for family of 4 (62% of the federal poverty level)—I would say that has more to do with the income distribution in Kentucky.

I find Dr. Rand’s comments a bit hypocritical. This is coming from a candidate who is an ophthalmologist (an ophthalmologist who invented his own board certification, no less) and has 50% of his income coming from Medicaid and Medicare. This is the candidate who said in an interview on October 3, 2010 that he would cut Medicare benefits and raise the retirement age for Social Security in order to keep the full Bush-era tax cuts. So while depending on your perspective, I suppose you could consider this to be intergenerational welfare; I would maintain that it is, in fact, intergenerational war.

The burden of uncompensated care looms large for most health care organizations—especially with the press pronouncing the "death" of health care reform. For the most part, the term 'health care reform' refers to some package of legislation that has two elements—increasing the number of Americans with some form of health care coverage (particularly catastrophic coverage) and putting in provisions to reduce overall U.S. health care costs. The first is of particular interest to health care provider organizations and the second to small employers like my organization.

Now, you may be like one of my many friends who is celebrating the death of the current set of health care reform proposals. You may say that the free market alone is enough to both reduce costs and provide expanded coverage (one leading to the other)—by having individuals pay for their own health plans and health services. While I'm a fan of many free market elements in health care reform (including consumer vouchers for purchasing plans), I would caution those of you in that camp that the free market alone won't solve the coverage and cost challenges that face us (for many reasons too numerous to list here).

The rumors of the death of any health care reform proposal are going to continue to destabilize any organization in the health service delivery system that is not solely a private pay operation. The rising number of uninsured and inexplicably underinsured Americans will overwhelm the charitable capacity of the delivery system without some paradigm shift. But, I would caution my friends in the health care field to realize that we can't afford universal coverage without cost containment. It's just not a fiscal possibility.

And, as a small employer that provides health coverage to our team, I can state unequivocally that no health care bill will cause increasing stress—both financial and ethical. Over the past two years at OPEN MINDS, we have had two proposed increases in the cost of health care coverage—15% in 2008, and 40% in 2009. So, I wasn't surprised (though the press seemed shocked) at the recent decision by Anthem to raise their premiums by 30-39%.

I hope you'll join me in pushing our representatives of both parties to take action—to move toward a system of universal coverage (even if only for catastrophic coverage) and to come up with rational solutions to reducing health care costs.

The health care reform bill tug-of-war currently happening between the House and Senate is too much for many of us to keep up with. I took interest with an article in Slate by Christopher Beam that includes a hit-list of those health care reform issues that still need to be ‘hammered out’ in the final bill. His six issues include:

• The exchanges—while the House bill would create a national exchange, the Senate bill would create a series of state-based exchanges. There’s no happy medium. It is either state or national.
• The mandates—what will be the real penalty for not buying health insurance? The House bill would charge a 2.5% tax on all income above the filing threshold ($9,000/individuals or $19,000 for couples), while the Senate bill would impose a flat penalty, which itself fails to acknowledge the wide variance in American income levels and their ability to pay up. The employer mandate is a big one as well; will employers pay an 8% tax on total wages or levy a $750 fine per employee? Who will be eligible for exemptions?
• Medicaid expansion and subsidies—the House bill would make Medicaid available to individuals earning up to 150% of the poverty level, while Senate bill would expand it 133%. The differences are in the subsidies, in that the House bill provides far more support for families at or below 300%, while the Senate bill seems to focus more on middle income families between 300% and 400%.
• CHIP—key questions posed by Beam: “Does Congress really want to end the Children’s Health Insurance Program and push kids into exchanges and Medicaid, as the House bill would do? Or does it want to extend CHIP until 2015, as the Senate bill would do?
• Narrowing the ‘donut hole’—the gap in Medicare coverage known as the ‘donut hole’ is addressed far more in the House bill, which phases it out altogether by 2019 by ‘filling’ it with money from the pharma industry. The Senate bill would only close the gap halfway (and only temporarily).
• Paying for it—the House would levy a 5.4% surtax on individual income above $500,000 while the Senate would tax plans that cost more than $8,500 for individual and $23,000 for a family; Senate would also tax indoor tanning services (yes, seriously).

As our eyes dart back and forth between this legislative ‘volley,’ I will be interested to see how flexible the House and Senate are on certain issues—and which issues they refuse to compromise on.

The report in USA Today was brief, but its implications leapt off the page for me:

“In the eight states that report monthly tax figures, collections from July through September declined an average of 8.3 percent from a year earlier. Even in places where there's been an income tax increase, such as New York, collections still declined. This comes after there was a 15 percent nationwide drop in tax collections during the first six months of the year.”

With health care in general (and behavioral health and social services in particular) dependent on state financing, I think the ‘end of the recession’ is nowhere in sight – despite the pronouncements of economists. Look for reductions in Medicaid (reduced eligibility, reduced service coverage, reduced provider fees, and more risk-based contracts) and cuts in state-funded services (mental health, addictions, child welfare, juvenile justice, prison health, senior support services, etc.) as the reality of tax collections cause state governments to open up their budgets once again.

If you’re a manager of an organization providing health services or social services – or a county commissioner – the pending tax shortfalls will have the biggest impact on your work. Now would be the time to develop a contingency plan.

For more on planning and managing in these harsh economic times, check out:

• On the Money - The Key Financial Challenges Facing Nonprofits Today - and How Grantmakers Can Help
• The Wolf is at the Door: The Global Economic Crisis and the Public Sector
• Surviving & Thriving in a Recession: A Management Blueprint for Health & Human Services
• Changes in Health Care Financing & Organization: Impact of the Economy on Health Care

I've been somewhat bemused by the 'surveillance' film footage of ACORN employees seemingly giving advice on how to evade taxes and conceal criminal activity to conservative activists posing as a pimp and a prostitute.

When I finally saw the entire film footage (on the fabulous "The Daily Show" hosted by Jon Stewart) I was struck with two different thoughts. First, a fleeting thought—I didn't know that people working in the illegal sex trade were concerned about paying taxes. The second, and more substantial thought, is, as an executive of a multi-site organization, how do you know what your front-line team members are doing on most days?

I do feel sorry for the embattled CEO of ACORN. She was making the rounds of the morning talk shows, outraged and threatening to sue because the secret videos broke Maryland law by carrying out an illegal wiretapping operation. But, as many politicians have learned, when the video genie is out of the bottle, no one cares how the video was made. More problematic is that even the most spirited defense of ACORN I've read refers to the organization as "admittedly very poorly managed." Not exactly a glowing endorsement.

So the question is, if your frontline staff were featured in film footage gathered by a hidden camera, what would you see? How do you, as an executive, increase the likelihood that such footage would be benign? There are a few risk management tactics that should be in your organization's plan:

• Updated policies and procedures—with testing of staff knowledge of those policies and procedures
• Routine assessments with compliance—with policies and procedures across all programs
• A consumer 'hotline' (and web site) to report perceived service problems
• Related performance metrics on your organizational and supervisory performance dashboards
• A mystery shopping program to monitor services from the consumer (and hidden camera) perspective
• A robust training and technical assistance program for front-line supervisors

I think the ACORN situation is going to spawn imitators—particularly for health and human services that are perceived as politically unattractive (for any number of reasons). Before your employees are featured on a local news program, be prepared and review your controls for remote staff.