It’s easy to argue that a program’s benefits outweigh its costs. But if you never measure the benefits, how can you know that’s true?
As Missouri lawmakers prepare for upcoming years of tighter budgets, this is one question that needs to be asked. Earlier this year, one lawmaker looking for places to cut in the budget asked the Department of Social Services (DSS) to identify potential savings in Medicaid, the state’s most expensive program. The department pointed to chiropractic care, an optional benefit, because it had not found evidence of the supposed savings that were used to justify adding it nearly a decade ago. The funding was removed from the budget, and Missouri stopped covering the benefit on July 1.
On its face, this looks like a story of good governance. A program was adopted at least partly based on expected savings elsewhere in the budget, but once the state couldn’t show those savings occurred, lawmakers reconsidered it. But the chiropractic story raises a bigger question about what happens to fiscal estimates after a bill becomes law.
Back in 2018, when Missouri approved Medicaid coverage for chiropractic care, I was working on the state’s Medicaid budget, attending hearings and reviewing fiscal notes. Lawmakers had proposed covering chiropractic care for several years, but the fiscal notes showed it would cost the state millions of dollars. Supporters argued the benefit could save money elsewhere in Medicaid by reducing opioid prescriptions, back surgeries, and other treatments. After some pushback, DSS incorporated those assumptions into its fiscal note, estimating nearly $12 million in state general revenue savings during the first two full years.
Eight years later, the department could not point to hard evidence that those savings occurred. Unfortunately, determining whether the savings actually materialized isn’t as simple as comparing the estimate with what the state ultimately spent.
Missouri’s DSS knows exactly how much Medicaid paid for chiropractic care. What it can’t directly observe is what Medicaid would have spent on those same patients without the benefit. The department noted that 97 percent of recipients who received chiropractic care did not have back surgery. But that doesn’t tell us how many would have needed surgery otherwise, or how much the state actually saved.
Projected savings like these can make a program appear much less expensive when lawmakers are deciding whether to adopt it. Every bill that receives a hearing in Jefferson City gets a fiscal note estimating what it could cost or save the state. Once the bill becomes law, however, the budget process does not routinely require anyone to go back and see how those estimates held up.
This issue is not unique to Medicaid. Tax incentives, for example, are often justified by projections of jobs, investment, or economic activity that would not otherwise occur. Simply counting what happened afterward tells us no more about an incentive’s effect than the absence of back surgeries tells us how much chiropractic care saved Medicaid.
In this case, it took lawmakers eight years to revisit the assumptions behind chiropractic care’s fiscal estimates. As our elected officials look for ways to rein in state spending, going back through other fiscal notes and comparing what programs were expected to cost or save with what actually happened would be an obvious place to start.
