And now for some more bad news via the New York Times reporting on the Centers for Disease Control:
One in 10 pregnant women in the continental United States with a confirmed Zika infection had a baby with brain damage or other serious birth defects, according to the most comprehensive report to date on American pregnancies during the Zika crisis….
Despite a C.D.C. recommendation that brain scans be performed on all babies born to women with possible Zika infection, only 25 percent of the babies in the study had brain imaging, so the actual number of impaired infants could be higher….
Birth defects, ranging from the condition of abnormally small heads, known as microcephaly, to neural tube defects and eye malformations, occurred in 5 percent, or 51, of those pregnancies, including 45 live births. Of the 250 cases where the presence of a Zika infection was confirmed with laboratory testing, 10 percent, or 24 pregnancies, resulted in birth defects, the report said.
All but eight of the 51 cases involved severe brain abnormalities such as microcephaly;
Why does this matter beyond the individual tragedy? Medicaid is the dominant payer for births in this country. Most Medicaid births are paid for by Legacy Medicaid funds where the states pay a significant portion of the cost. Almost all childhood Medicaid expenditures are also Legacy Medicaid expenditures where the states. We are having a policy debate that looks to significantly reduce Medicaid’s ability to respond to emerging public health crisises:
the current system where the Feds give the states an open ended funding stream that is a state specific multiple of the state contribution. The block grant removes the variability of the federal spending commitment. In the Ryan plans, it also shrinks in terms of real purchasing power over time so states either spend more money to maintain current level of enrollment and services or cuts to enrollment and services have to occur.
And here is where there is a problem. The capitated payments would be based on average expected costs in year 1 and then get weaker. States with disproportionate clustering of high cost conditions will be significantly worse off. Long run Zika neurological impairments will hit warmer states’ Medicaid budgets much harder and more dis-proportionally than Zika will hit cold weather states’ Medicaid budgets…. The block grant system fails unless there is a side payment of new federal funds. And given the political fights over natural disaster relief bills and the Zika bill, I have a hard time seeing Congress routinely providing multi-billion dollar cash infusions to a few states for new diseases or threatening epidemics.
Further more, the new CDC data indicates that severe birth defects are occurring more often than previously thought.
This is a case example of the problems with block granting with a shrinking real-dollar allocation. It can’t handle shocks.