The Magnolia state might be one of the most wonderful places to live, but there is no getting round the fact that it has some of the worst health outcomes in the country.

According to the Legatum Institute’s Prosperity Index, Mississippi ranks 49th out of 50 states in terms of health outcomes, health systems, and illness and risk factors.

“That’s easy to fix” some are now saying. “We just need to hose federal funds at the problem”.  When it comes to health care, one thing Mississippi does not lack are those calling for us to accept federal funding to expand Medicaid.

Under the Obama administration’s Affordable Care Act, a number of states have already gone down that road, turning Medicaid – which was designed to provide health insurance coverage to low income seniors and mothers, and those with disabilities – into a system of generalized healthcare.  Should we do the same?

No.  Expanding Medicaid would be extremely costly, without necessarily improving health outcomes.  Spraying federal funds in our direction does not mean that the money will end up going where it is actually needed.  Another large handout from DC would likely hinder, not help, the chances of us achieving the kind of health reforms we actually need.

Pouring millions of dollars of federal funds into Mississippi’s health system sounds attractive, but you won’t be surprised to learn that it comes with a price tag; a $100 million a year price tag, according to recent estimates.

Who, it seems reasonable to ask, would have to pay that?

One way of generating an additional $100 million a year in revenue from tax-paying Mississippians would be to raise personal income tax or tax businesses even more.  But Mississippi already has one of the heaviest state and local tax burdens of any state in America, and it is hard to see how our fragile economy could cope with an additional hike. 

Some have suggested that we could find this additional $100 million a year from the hospitals.  No plan I have yet seen has identified a way of conjuring up that kind of money without hospitals ultimately bumping up their costs to their patients.

I can see why some hospitals might be quite attracted to the idea of raising an additional $100 million a year from their patients, and in return getting a large dollop of federal funding thrown in their direction.  But I can’t quite see what is in it for those hundreds of thousands of families in Mississippi who work hard to provide health care coverage for their families, who would find themselves being asked to provide even more – so other folk could get coverage for free.

If we want better health outcomes, we should not think only in terms of how much money we spend on health care.  We need to think about the way that our health care system converts that money into improved outcomes for patients.

One low cost thing we could do would be to repeal laws that unnecessarily push up health costs, such as the 1979 Health Care Certificate of Need (CON) Law.  This legislation means that it is illegal today in Mississippi for hospitals or other healthcare providers to expand their health care services without first getting a permit, known as a certificate of need.

It’s not just that permission is needed.  The way our restrictive system works is that permission is often needed from established health care providers.  They can file objections that keep the matter tied up, often for years.  It is as if Papa John’s had to give approval before Domino Pizza was allowed to open a new restaurant in your neighborhood.

Additionally, rules on telemedicine mean that Mississippians are presently prevented from accessing health care online – unless the doctor they are dealing with happens to have Mississippi licensure. 

Why can Mississippians not deal with a doctor from Birmingham or Memphis?  Is what comprises good medical care different there?  Of course not.  The rules governing who can provide health care have been written in a way that hinders competition and limits choices, and is holding health care back for Mississippians.

These type of restrictions mean that instead of a free market in health care, with different providers competing to give patients services at a price they can afford, we have a rigged market.  The rules are written to keep new entrants out, which in turn leaves prices high and customers captive. This, not a failure to sign up to Obamacare, is one of the reasons why Mississippi does not have better health outcomes. 

Without reforming the way that our health system operates, throwing hundreds of millions of dollars at our state Medicaid system is not going to make things better.