These projections do not include the more rural counties of the state, but they spend less than 12% of the total amount being spent by local government for indigent medical care. On the basis of these data, which are not 100% complete but by far the best available, a minimum $2.7 million' of the $21.2 million spent locally for free medical care goes for public assistance recipients. MEDICAL CARE ITEMS BUDGETED IN PUBLIC ASSISTANCE GRANT The largest single expenditure by Texas state government for indigent medical care for public assistance recipients is that budgeted for these purposes in the monthly public assistance grant. This totals $29.1 million annually. Few persons outside the Welfare Department realize the magnitude of this program. A case example can best illustrate how this function operates. A 68 year old widower-a retired farmer-owns a 100 acre homestead, but is too feeble to work it. From other resources and by renting out his farm for pasture he has an average income each month of $35.00. A study by the Welfare Department field worker discloses budgeted needs of $85 per month. Since he conforms to all other eligibility requirements, an OAA grant of $50 per month is approved. After a few months the man became ill. He is treated free of charge by a local M. D. but needs $8 per month for drugs to control high blood pressure. Since he is receiving $50 and the maximum grant is $67, there is sufficient leeway to increase the grant to $58, to cover the drug costs. If he had been receiving the maximum grant already, the drug costs would not have been forthcoming. This is an example of how medical items can be paid for at present out of public assistance funds. Approximately one out of every two public assistance cases receives medical care funds from this source. Old age assistance recipients receive $27.6 million of the $29.1 million of public assistance funds spent for medical care. Nursing care costs and prescribed drugs are by far the largest items of expenditure. Hospitalization costs account for less than one per cent of the total ex 'This figure of $2.7 million cross checks very closely to an intensive study of 925 public assistance cases throughout Texas and the medical care they received during the past year from public and private sources. A projection across the total caseload of the results of this sample discloses almost the same amount received from local government sources. penditure. This low percentage is due to the fact that hospitalization is usually provided out of local resources. PRIVATELY SUPPORTED MEDICAL CARE: Private sources supply $10.5 million in free medical care to public assistance recipients. Admittedly this is a minimum figure since it is not possible to tabulate all the free professional services donated by individuals and professional persons. This $10.5 million is private free medical care for public assistance recipients known to the caseworkers. It is important to note the sources of these free medical services: Children or other relatives of recipients... M. D.* Druggists* Nursing Homes Insurance Dentists* Foundations .$ 8,449,000 183,000 183,000 10,000 599,000 532,000 68,000 499,000 44,000 Private Clubs & Service Organizations.. Total.. ..$10,548,000 AGGREGATE RESOURCES FOR P. A. RECIPIENTS: Thus from public assistance funds and from private contributions public assistance recipients receive $39.6 million each year in free medical care. When this figure is added to the $2.7 million received by these recipients from local medical care services, the total figure is $42.3 million. It should be noted that this figure does not include free care given P. A. recipients at John Sealy Hospital or M. D. Anderson Hospital, since it was not possible to obtain such data. It is known that a part of the $5.3 million indigent or part-pay patient care cost of these hospitals is devoted to care of P. A. recipients. It also does not include recipients admitted to the Texas State Hospital System since the public assistance grant is stopped when the recipient enters that system. Finally, it does not include free indigent care by V. A. hospitals or local health departments for public assistance recipients. These sources would probably add $1 million or more to the overall figure. HOW DOES THIS VOLUME OF "FREE" MEDICAL CARE compare with the medical services purchased by the overall population? *It should again be cautioned that these figures are minimum figures. Most free professional services given are confidential matters between the professional person and the patient concerned. The Texas Medical Association estimates that on the average Texas doctors donate 15% of their working hours to free treatment. Moreover many individuals, foundations and service clubs prefer to remain anonymous. Unfortunately, valid comparisons are not available for each of the four categories of recipients. A 1957-58 study by the Health Information Foundation showed annual per capita expenditures of $177 among persons over 65 years of age. How closely comparable this entire age group is to the Texas OAA group is impossible to determine from existing data. However, it is interesting to note that medical items budgeted in the OAA grant totaled $125 per year and that adding medical expenditures from other known sources results in a total of $174-only $3.00 less than the national average. It is also likely that the OAA recipients receive some free services unknown to the caseworkers and therefore not reported in the needs analysis. Thus, it can be concluded that the Texas OAA recipient is receiving as much medical care as others in the same age group nationally. Here, then, is the crux of the difference between the modest cost of meeting the respondable medical needs among Texas P. A. recipients and the large cost of a medical care program similar to that existing in other states. If existing medical care expenditures-both private and public-should be transferred to a new, specifically designated medical care program, it is obvious that the cost of that program will be: Estimated Annual Cost of Meeting Respondable Needs............ Total Annual Cost of Medical Care Program.. $44.0 million This explains why a state-federal medical care program will be costly if the approach used by other states is followed here in Texas. It does not, however, provide answers to several other important questions about these programs: ☆ Is it desirable to transfer existing medical expenditures to a new program? Is there any danger that the comparatively small number of respondable medical need cases will become the "forgotten men and women" in a large cash-dispensing welfare program? Why have expenditures for medical care programs in several other states gone so far beyond the amount that would appear necessary to meet respondable needs and also absorb the transfer of existing expenditures? (Note the per recipient expenditure figures cited in page 5.) What will be the effect of a mass medical care program for P. A. recipients on the quality and cost of medical services for the population as a whole? These questions are discussed in the chapter which follows. CHAPTER IV PROBLEMS OF STATE-FEDERAL MEDICAL CARE If a state-administered federally-initiated vendor medical care payment program was established in Texas, and if it did not protect the state against the transfer to it of existing medical care expenditures, something over $40 million would be needed in state-federal money to pay for such services. Most states have made the mistake of not preventing such transfers, with a resulting rapid growth in their medical care costs under the federal program. The transfers would take place from three possible sources: ✰ Local government would want to be paid for each P. A. case receiving medical care now paid for by local taxes. In Texas this would be approximately $2.7 million annually. ✩ Private sources: relatives, friends, private foundations, professional persons would not be as willing to pay for care or furnish free care if they knew tax funds were available to pay for medical services. Transfers from this source could run to $10.5 million each year. Public assistance funds: recipients would want the $29.1 million now used for medical care purposes to be freed for possible P. A. grant increases. On the surface this latter transfer may seem academic, but it is not. The state-financed part of this $29.1 million (which is both state and federal money) comes out of the annual $47 million of state P. A. moneys which is presently limited to that figure by the Texas Constitution. If another medical care fund is created and financed outside this constitutional limitation, as is contemplated, pressures would build up to transfer all or as much as possible of the present $29.1 million medical care bill to the new fund. Why would this happen? Primarily because when the transfer took place, public assistance funds now committed to medical care would thus be released to permit individual grant increases. If such a transfer is permitted, it would have the effect of buying no new medical services, but would, in fact, be a way of providing public assistance grant increases without raising the constitutional limitation on state P. A. expenditures. If the new federal-state vendor medical care program should be adopted in Texas, it can expect to have transferred to it a minimum of $40 million in existing medical care expenditures. Only if protected from such wholesale shifting can it hope to finance any new medical care. If not protected from such transfers, the state will have to spend at least $40 million before it can provide additional services needed by P. A. recipients who have respondable medical needs. SHOULD THESE COST TRANSFERS BE CONTROLLED? To answer this question it is important to pinpoint the ramifications of permitting the transfer of P. A. recipient medical care costs to the state-federal program. The most obvious result is the one underlined above the depletion of the new medical care funds before any new service can be provided. The following ramifications are less obvious, but are important: ☆ It would destroy the screening mechanism devised by local government to control medical service usage. If costs can be transferred to the state, no incentive exists for local government to "police" the system. ☆ It would encourage relatives and friends of P. A. recipients to stop paying for any medical care that would be paid for by the state. At present most tax-supported local medical care programs demand that responsible adult relatives of P. A. recipients pay for medical costs to the extent of their financial ability. In Texas, state welfare programs do not have such requirements. It would permit at least $29 million in Texas public assistance funds to be released, as money used for medical care out of existing P. A. appropriations is replaced by the new program. These funds could be used for P. A. grant increases without revising the constitutional limitation. In effect this would be by-passing that constitutional limitation. ☆ Those areas of the state already having local tax-supported medical care systems and resources would be in an administrative position to bill the state immediately for all costs covered by the new program. In contrast, those areas of the state that provide no such services, but with an important volume of respondable cases, do not have the administrative machinery to transfer needed costs to the state. Thus those who now provide services and have less need would get the bulk of available funds while those areas of greatest need would get little or nothing at all. ✩ There would be little incentive for private groups or professional persons to provide free services. "If everyone else is getting paid, why shouldn't we?," would be a typical attitude. |