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APPENDIX A RACIAL PATTERNS WITHIN MEDICARE AND MEDICAID An examination of racial/ethnic patterns in the use of medical services within the Medicare and Medicaid programs is important for two reasons. First, since these programs involve massive amounts of federal funds, they are a major arena for concerns that may arise under Title VI of the Civil Rights Act. Secondly, since both ability to pay and source of payment may affect people's ability to obtain medical care, an examination of situations in which these factors do not vary will help illuminate the effect of racial and ethnic factors themselves. Thus, an examination of patterns of medical care within the Medicare and Medicaid programs will help demonstrate whether minority group members face disproportionate barriers in seeking medical care. Medicare is the federal health insurance for the aged and certain disabled persons. The eligibility requirements and benefit structure are the same throughout the country and apply without regard to income or assets. Medicare involves two types of insurance benefits. Part A covers inpatient hospital care, post-hospital extended care, and post-hospital home health care and is automatically provided to anyone eligible for Social Security payments. Part B covers physicians and related services and is financed in part by monthly premiums paid by beneficiaries. In fiscal year 1978, about 23 million persons (over 95 percent of the elderly) were eligible for Part A coverage, and most (98 percent of whites and 96 percent of nonwhites in 1976) of these were also covered under Part B.1 Racial Trends Within Medicare. In an analysis of 1968 Medicare data, Davis explored whether aged Medicare enrollees used benefits equally, regardless of race, income, or place of residence.2 She found expenditures per black enrollee under Medicare were smaller than expenditures per white enrollee. This difference was due to the fact that a smaller proportion of blacks than whites received benefits under the program. (Reimbursement amounts per person served, however, were essentially equal across racial groups.) The disadvantage of blacks was most severe for physician services and extended care facilities, and was most pronounced in the South. Davis's findings raised concerns about relative entitlements, by race, within the Medicare program in its early years. 161
162 Ruther and Dobson have examined more recent (1976) Medicare data to see whether the racial differences reported by Davis have persisted. Their conclusions were, that although racial disparities still existed, they had decreased in the period between 1967 and 1976. Their data for those two years, presented in terms of the ratio of whites to nonwhites receiving various types of services, are shown in Table 22. Although the racial differences have generally diminished, whites still use inpatient hospital services and physician services under Medicare at somewhat higher rates than do nonwhites. The white use of skilled nursing facilities under Medicare is still much higher than that of nonwhites. Given that black health status is, on average, lower than white health status, these patterns seem anomalous. On the other hand, Table 22 also shows that nonwhites are more likely to make use of outpatient departments (perhaps reflecting a lack of access to private physicians) and home health agencies. In sum, even though racial differences have diminished in the Medicare program, available data continue to show a difference both in the amount of services used and in the source of the services (private physicians as compared with outpatient departments). These differences do not appear to be due to racial differences in the need for medical care among the elderly. Medicaid was enacted as Title XIX of the Social Security Act in 1965 and provides that the federal government will share with participating states the cost of certain services used by eligible individuals. Currently all states except Arizona participate in Medicaid, as do the District of Columbia, the Virgin Islands, Guam, and Puerto Rico. Federal requirements provide for the mandatory inclusion of groups that are eligible for cash assistance from public Table 22. USE OF MEDICARE SERVICES BY THE AGED: RATIO OF WHITE TO NONWHITE ENROLLEES BY TYPE OF SERVICE, 1967 and 1976 Type of Reimbursed Services 1967 1976 Hospital Insurance and/or Supplementary Medical Insurance (Total) 1.44 1.13 Hospital Insurance 1.30 1.19 Inpatient Hospital Services 1.36 1.19 Skilled Nursing Facility Services 2.83 1.72 Home Health Agency Services 1.23 0.88 Supplementary Medical Insurance 1.41 1.10 Physician & Other Medical Services 1.49 1.16 Outpatient Services 0.80 0.86 Home Health Agency Services 1.14 0.72 SOURCE: Martin Ruther and Allen Dobson, "Equal Treatment and Unequal Benefits: A Reexamination of the Use of Medicare Services by Race, 1967-1976," Health Care Financing Review 2 (Winter, 1981), pp. 55-83.
163 programs such as Aid to Families with Dependent Children (AFDC) and Supplemental Security Income (SSI). Eligibility for these programs is determined at the state level using both federally defined, categorical requirements (for example, age, blindness, or disability) and state defined requirements regarding income and resource levels. States also have the option of including within Medicaid "medically needy" persons who meet the categorical but not the financial requirements.4 Thus, the percentage of poor (by a standard definition) people who are eligible for medical care under Medicaid varies enormously from state to stateâfrom fewer than 20 percent of the poor in many states (particularly in the South) to numbers well in excess of the entire "poor" population in California and New York. Federal regulations specify a basic set of services that must be provided, and this may vary between the "categorically eligible" and the medically needy. States must provide the categorically eligible with both inpatient and outpatient hospital services; laboratory and X-ray services; skilled nursing facility (SNF) services for individuals 21 and older; family planning services; physician services; and the early and period screening, diagnosis, and treatment (EPSDT) of physical and mental defects in individuals under 21 years of age. In addition, states may opt to cover additional services for categorically eligible persons. States that include the "medically needy" within their Medicaid program may provide either the same set of services provided to the categorically eligible, or services may be restricted to any 7 from an overall list of 16 services. Racial groups may differ in their use of particular services. For example, it appears that a larger proportion of white than black Medicaid recipients are elderly, which has implications for the types of services that the different racial groups are likely to use. Since states have considerable control over the mix of services that are available to Medicaid recipients, the possibility exists that racial bias affects the mix of services included in a state's Medicaid program. Concern about this aspect of the Medicaid program has risen in North Carolina, where a lawsuit was initiated over proposed Medicaid cutbacks that would have disproportionately affected services used by blacks, and, in Mississippi, where whites constitute 25 percent of the Medicaid population and receive 50 percent of the Medicaid dollars.6 Medicaid is the most important source of medical coverage for poor people in the United States. In 1977 there were about 23.8 million recipients at a cost of more than 16 billion dollars. Despite the great importance of the Medicaid program for providing medical care to the least privileged members of society, existing data do not permit even a minimally adequate assessment of the extent of racial/ethnic disparities within the program. Several data problems exist. First, no national data exist on the racial/ethnic characteristics of persons who are eligible to receive services under Medicaid. Thus, it is not possible to develop utilization rates for different groups. Second, many states do not report the race of recipients to the Health Care Financing Administration (HCFA). Thus, in the data published by HCFA, race-specific information is not
164 available for 35 percent of Medicaid recipients and for 28 percent of all Medicaid payments. Third, the racially specific data that are available are only for the two categories, white and "other." The consequences of these severe data problems are seen in Table 23, which presents data on overall racial distribution of Medicaid recipients and payments. The most striking things about the table are the extent of the missing data, which precludes any conclusions about racial trends, and the absence of any base from which rates of use could be developed. The available data on the Medicaid program are of very limited usefulness. Table 24 shows the percentage of all Medicaid recipients, Table 23. PERCENT DISTRIBUTION OF MEDICAID RECIPIENTS AND PAYMENTS, BY RACE, FISCAL YEAR 1977 White All Other Unknown Total Recipients 37.0 28.0 35.0 100.0 Payments 50.0 22.0 28.0 100.0 SOURCE: Health Care Financing Administration. Unpublished tables. Table 24. PERCENTAGE OF ALL MEDICAID RECIPIENTS RECEIVING EACH TYPE OF COVERED SERVICE, FISCAL YEAR, 1977 Service Total White Other Than white Inpatient Hospital General Hospital 15.9 18.2 16.7 Mental Hospital 0.4 0.4 0.1 Skilled Nursing Facility 2.6 3.8 0.8 Intermediate Care Facility For Mentally Retarded 0.4 0.7 0.2 All Other 3.1 6.5 1.3 Physician 67.7 71.2 68.8 Dental 19.5 20.1 19.5 Other Practitioners 12.4 13.5 11.8 Outpatient Hospital 36.3 36.1 40.0 Clinic Services 7.0 6.5 10.1 Laboratory and Radiologic 23.1 18.1 17.3 Home Health 1.6 0.7 0.4 Prescribed Drugs 64.7 64.3 62.0 Family Planning 5.6 5.4 6.6 Other Care 13.7 11.8 8.4 SOURCE: Health Care Financing Administration, 1977 State Tables (35, 36, 37), unpublished.
165 by race, receiving each type of covered service in fiscal year 1977. For most categories, a slightly greater percentage of white enrollees than black enrollees received services. Blacks, however, were slightly more likely than whites to have received clinic and outpatient hospital services. The most striking racial difference, however, was in the use of skilled nursing and intermediate care facilities. The significance of this difference is magnified by the fact that, although relatively few Medicaid recipients receive care in such facilities, more than 40 percent of all expenditures under Medicaid go to skilled nursing and intermediate care facilities.9 (The topic of race and nursing home use is the subject of Chapter 3 of this report.) The fact that per-capita Medicaid expenditures are smaller for nonwhites than for whites for most categories raises a question about racial characteristics of those who are eligible for Medicaid and those who receive medical services through the program. The question of whether the racial difference reflects the needs of beneficiaries cannot be answered. REFERENCES 1. Martin Ruther and Allen Dobson, "Equal Treatment and Unequal Benefits: A Reexamination of the Use of Medicare Services by Race, 1967-1976," Health Care Financing Review 2 (Winter 1981), pp. 55-83. 2. Karen Davis, National Health Insurance, Benefits, Costs and Consequences, (Washington, D.C.: The Brookings Institution, 1975) p. 53. 3. Ruther and Dobson. 4. For a summary of state variations in reimbursement policies and eligibility requirements under Medicaid, see Medicaid/Medicare Management Institute. Data on the Medicaid Program: Eligibility, Services, Expeditions, 1979 Edition (Revised) (Baltimore, MD: Health Care Financing Adminstration, DHEW, 1979). 5. Sylvia Drew Ivie, "Ending Discrimination in Health Care: A Dream Deferred," Presentation before the U.S. Civil Rights Commission, April 15, 1980, p. 37. 6. Aaron Shirley, Presentation before the U.S. Civil Rights Commission on the Federal Role in Rural Health Care Delivery, April 15, 1980. 7. Medicaid/Medicare Management Institute. 8. Health Care Financing Administration, "Medicaid State Tables," 1977, unpublished, 1980. 9. Medicaid/Medicare Management Institute, p. 34.
