The Complex Relationship Between Health Tech & Medicaid

105,692,900

That is the number of individuals who received their health insurance coverage via either Medicaid or Medicare programs in 2015 according to the data compiled by the CDC and Henry J. Kaiser Family Foundation. Let’s just repeat that number again- 105,692,900 Americans.

It was estimated that in 2015, there were 289,902,600 individuals with health insurance coverage. Approximately 39% of those individuals were receiving their coverage under public programs. This amounts to a significant percentage of the American population who are not being privately insured.  

Why is it then that many of today’s trending health tech companies are ignoring this 39% of covered Americans when developing their innovations?

Graphic produced for campaign to show the significance of Medicaid in NJ

Graphic produced for campaign to show the significance of Medicaid in NJ

 

The Double-Edge Sword of Public Health Insurance Coverage

Having publicly funded health insurance is by far better than being uninsured, however along with this public assistance comes restrictions and disadvantages. Among the top 3 drawbacks are:

1. Limited Coverage 

Some procedures that are deemed experimental or unnecessary can be refused for coverage even after they have occurred, thus limiting the health options patients have. Money has been seen to many times be the difference between someone receiving the best course of treatment and a lesser, ill-fitting option.

2. Medicaid Quotas 

Medicaid reimbursements for doctors are typically lower compared to what they would normally charge for services. This decreases the incentive for doctors to accept Medicaid patients which in turn limits the selection of physicians patients enrolled in the program can choose from. This has become a huge problem in nursing homes specifically with patients being randomly switched, refused admittance, and discriminated against. All of these situations puts a patient’s health at risk. 

3. Mandatory vs. Optional Benefits 

Each state under Medicaid must offer all mandatory benefits outlined by the federal government, but have a choice of which optional benefits to offer. Some of what falls under optional benefits includes prescription drugs, dental care, hospice, preventive screening, respiratory care services, and speech/hearing disorder services. 

With these major drawbacks, the Medicaid and Medicare arena is poised for innovation to circumnavigate care disadvantages. 

 

Expanding the Health Tech Demographic

Much of the the health tech however continues to develop products and programs focused on the wealthy and privately insured. That may be where the most money lies, but health tech must remember that it lies not just in a Silicon Valley atmosphere where bottom-line profit is the ultimate goal. It also lies at the edge of public health, where costs and benefits must be more carefully weighed as every dollar amount invested is one that could mean the difference between someone living fully and someone continuing to suffer from disease and illness. There is an additional ethical and moral responsibility that comes along with developing programs and products with medical applications.

Few of the programs developed in health tech have yet to address the highest-need and highest-cost beneficiaries of Medicaid. When one attempts to run a Google search data on the number of digital health programs with Medicaid components you are unable to come up with any significant figures. When you look at many of the companies that do appear under these search parameters, they are only focused on data aggregation of Medicaid enrollees, not the actual health of those individuals.

Perhaps some would raise the argument that health tech is not designing programs and products for the publicly insured due to inability of those individuals to afford and access the technology. This perceived inaccessibility however is factually inaccurate, as 64% of individuals making an income of less than $30,000 have smartphones, which are a major means of health tech program distribution. 

Even looking at the next income level of $30,000 - $49,999 it is seen that 74% of individuals have smartphones (Pew Center). So, inaccessibility is not the main issue when it comes to health tech innovation reaching the Medicaid demographic, but instead it lies in lack of interest on the part of founders and programmers.

By expanding health tech into low-income populations both individuals needing care, and the government, will find huge savings. Digital health tools have the potential to help decrease doctor and patient barriers in many low-income communities, increase patient engagement and adherence, and raise the overall level of community health. It is through expanding our public health ventures into the digital realm that the greatest economic returns will be found, not by waiting until individuals end up in our emergency rooms in need of dire treatment. Once that point is reached, much of the battle is already lost. 

 

Where do we go from here?

Founders in health tech should begin to ask themselves:

  1. Why is it that many programs and products continue to cater to the wealthy and fine-tune care rather than focus on the overall expansion of care access? 
  2. How can I assist providers with their Medicaid and Medicare populations?
  3. What innovations can be developed to help circumnavigate the major healthcare drawbacks that individuals face when enrolled in public health insurance coverage?
  4. Is there a way to marry public health principles with technology and still reap rewards?

With the never-ending cycle of healthcare and public programming uncertainty that the United States has been stuck in, perhaps it is time now, more than ever, for health tech to begin to shift their focus to helping limit health disparities.