Las Vegas Sun

January 26, 2015

Currently: 57° — Complete forecast | Log in | Create an account

Memo from Carson City:

Could expanding Medicaid help Nevada’s economy?

It’s not going to create a Higgs Boson particle, but Gov. Brian Sandoval’s twin desires to not raise taxes and diversify the economy might be colliding.

So far, Sandoval’s pending decision on whether to expand the state’s Medicaid system has been argued on the issue of government spending versus expanded access to health care.

But Robert Lang, a professor of urban affairs at UNLV, sees the debate differently. He argues it’s about jobs.

Las Vegas’ health care industry is dramatically smaller than in other states, meaning we have fewer doctors, nurses and receptionists than would be expected.

Given our population’s size, age and income, the health care industry should make up 18 percent of our overall economy. In Southern Nevada, it’s about 12 percent, according to a study co-authored by Lang last year.

“There’s a lot of medicine missing from Southern Nevada,” he said.

Expanding the health care industry to meet the national standard would mean 40,000 jobs for Southern Nevada.

And that’s where the decision on whether to expand Medicaid comes in.

The U.S. Supreme Court decision this month upheld key parts of the Affordable Care Act but left it up to the states to decide whether to expand Medicaid, the state-run health program for the poor and disabled.

Sandoval, a Republican, has expressed grave concerns about the cost of the expansion to the state.

Although the federal government will pay for all direct costs of the expansion initially, that share will drop to 90 percent by 2020. Plus, the state would shoulder administrative costs.

Sandoval has said he would have to consider cutting education or explore other “untenable” avenues — such as raising taxes — for the state to afford the expansion.

But Lang said direct costs to Nevada should be weighed against the economic benefits. Economic diversification has been a priority of Sandoval’s administration, and health care is identified as one of the seven industry sectors the state is trying to attract. The governor’s economic development plan also identifies Nevada’s “under-capacity health care system” as one of the state’s liabilities.

Expanding Medicaid “might be a chance to put a lot of money in play,” Lang said.

Advocates for Medicaid — from patient advocates to doctors and hospital representatives — have argued that for every dollar spent on the program, there’s a multiplier effect. In English, money earned by a Medicaid provider is then spent elsewhere in the economy for things such as renting office space, buying lunch or getting haircuts.

Larry Matheis, executive director of the Nevada State Medical Association, which represents doctors, said that for every dollar of Medicaid spent in Nevada, $3 gets circulated in the economy.

“I’d think there would be a positive effect on the economy that comes from expansion of the Medicaid program,” said Matheis, who added his association hasn’t taken a position on expanding the program.

But more people on Medicaid doesn’t automatically mean a windfall for providers such as hospitals.

Bill Welch, president/CEO of the Nevada Hospital Association, said the state reimbursement rates for Medicaid patients pay for just 53 to 58 percent of the cost of care.

In other words, hospitals lose money on Medicaid patients, he said.

Still, that’s better than they do on those without insurance. Hospitals recover about 6 percent of the cost of treating those without insurance, he said. Welch said Nevada hospital CEOs will meet this week to decide whether to take a unified position on the Medicaid expansion.

But, he noted, Medicaid reimbursement rates are at levels from the late 1990s.

To increase those rates would, of course, further complicate the original question of whether to expand Medicaid: Can the state afford it?

Join the Discussion:

Check this out for a full explanation of our conversion to the LiveFyre commenting system and instructions on how to sign up for an account.

Full comments policy

Previous Discussion: 8 comments so far…

Comments are moderated by Las Vegas Sun editors. Our goal is not to limit the discussion, but rather to elevate it. Comments should be relevant and contain no abusive language. Comments that are off-topic, vulgar, profane or include personal attacks will be removed. Full comments policy. Additionally, we now display comments from trusted commenters by default. Those wishing to become a trusted commenter need to verify their identity or sign in with Facebook Connect to tie their Facebook account to their Las Vegas Sun account. For more on this change, read our story about how it works and why we did it.

Only trusted comments are displayed on this page. Untrusted comments have expired from this story.

  1. It's the "broken window theory," is what it is. Stealing from you and me to give to John & Jane Doe doesn't help anyone except the slothful. It doesn't "inject" one extra penny into the economy and, at its core, is dishonest and deceitful. This is merely an "end-run" around Capitalism as Osama Obama and his fellow travelers continue on their merry way of "transforming" America into a European-style economy and that isn't what we're all about. Stop this train in its tracks come this November by voting for Mitt!

  2. Federal or State over spending has the same effect, poverty for the general population. And Our Hypoxic Dems will want to tax the air out of what is left. And Mr. Matheis has it wrong. Every Dollar spent in Medicaid has a NEGATIVE effect on the economy.

    The expansion of Medicaid is forced slavery for the medical profession which is then penalized by having to subsidize it's own demise through over utilization and underpayment for services.

  3. Is there a literacy test for reporters or editors? A basic IQ test? Overpaying health care people takes jobs away from the private sector because people with income (earned or otherwise) can't make as many purchasing decisions--cause they're paying more taxes. Haven't you heard how an economy works? When people buy your products and services, you employ people. Your employees make purchasing decisions, and so on. Often referred to as the multiplier effect. So for all the more expensive health care for needless "health care" we're paying for but not getting, there are fewer people employed. Market-driven, patient-driven, consumer-driven refers to people paying for health care they NEED. Does not mean paying for high insurance premiums so hypochondriacs and unthinking masses of people can get endless "care" for 0 - $50 co-pays. It means you pay more for the doctor visit so you think twice before going. But care remains somewhat affordable so you go to a doctor or take your RX when you need to.

  4. To expand Medicare in Nevada or Not? This one is a no-brainer.

    If Sandoval refuses to tax the obscenely wealthy that have made fortunes lowering worker wages, all while productivity went up, then he's choosing his rich donors over the best interest of his people. Proving that he is the selfish back biting politician some accuse him of.

    On the other hand he can tax the obscenely wealthy and use it to create 40,000 desperately needed high paying jobs that will also translate into a higher quality of life for MILLIONS of Nevadans AND will create local start-up businesses and increase immigration of more mature corporations.

    So, will Governor "Sunny" side with the 1% of the 99%?

  5. As to revenues needed, maybe Gov Sandoval should take a serious look at LOST revenues. Nevada could and should collect the sales tax on ALL internet sales, NOT just from those internet storefronts that have a physical presence in Nevada. The internet is competing with actual brick and mortar stores throughout Nevada. Those stores must collect sales taxes. As such,Nevada businesses are at a competitive disadvantage to internet storefronts NOT located in Nevada. It's time for a change, such that appropriate sales taxes are charged. Commerce is Commerce, and regardless of whether it's a brick and mortar store or an internet storefront, sales tax applies! Nevada's businesses need to be able to compete on a level playing field, and our communities need to receive their lawfully legislated sales tax revenue which provides/supports various services and infrastructure.

  6. sebring: 9:30 If it's a no brainer, that explains why you are into it.

  7. renorobert: still confused, huh. If "you receive what you pay for" then I shouldn't have to pay for your medical care--cause I don't receive it but I pay for it.

  8. This is pretty much a no brainer when you look at the statistics for Nevada. But then again, that pretty much don't matter with Governor Sandoval.

    He places more emphasis on money than people.

    Even though just a little short of TWENTY-THREE PERCENT of the people who call Nevada their home have no adequate and affordable health care, that's of no consequence to Governor Sandoval.

    The Affordable Care Act has been enacted into legislation, affirmed as the law of the land by the U.S. Supreme Court. America, after hundreds of years, now is on the right road to national health care. But Governor Sandoval could care less. Like I say, he is more worried about money than people.

    Governor Sandoval should stop standing in the way of progress.

    But he decides that he should rule over the death camp now called Nevada. Through his indifference, uncaringness, neglect and blatant criminal disregard for the people of Nevada, we ALL have to suffer a fate worse than people face in north Korea.

    You don't have health care? Tough. Governor Sandoval don't care and don't want to serve this State. His job has been confirmed that he only runs interference for mining/casino interests. His main job is working for Jones Vargas, not as Governor.

    Welcome to the death camp called Nevada, tourists. Governor Sandoval could care less of TWENTY-THREE PERCENT of its people. You're sick? Die, you bastard, die! Or just drive a few miles west and claim California as your residence. How dare you think his Government should seek for their welfare and health? It's your fault for standing in the way of progress and eternal tax cuts for the rich interests in Nevada.

    I predict Governor Sandoval will drag his feet and make up stupid excuses. He should be setting up health care exchanges, setting up Medicaid and other administrative first steps to start the Affordable Care Act, the law of the land, here in Nevada, but since he's a brain dead Tea/Republican Party Governor and wants to fight it STILL, he won't lift a finger to help the unfortunate people here. He'll just stand on his lofty holier-than-thou pedestal and scream and rail about other things.

    Nevada loses. People die. That's the legacy of Tea/Republican Party reign here in Nevada.