MEMORANDUM — PROVIDER NETWORK MAINTENANCE, SOUTH TEXAS CORRIDOR Filed: Q3 2026. Subject: Cost-structure optimization, home health census units, Medicaid managed-care enrollment alignment.
The Congressional Budget Office reports that the deficit for the first 9 months of this fiscal year is $35 billion wider than last year. The editorial board is tracking. They have not, to my knowledge, itemized whose revenue it was before it became a deficit. I have. The $49 billion in new Medicaid spending they call a crisis is, on my provider-side ledger, a maintenance fee the public pays so I do not have to. This memorandum documents the cost structure for the home health census I manage across the South Texas corridor, and certifies my compliance with the enrollment standards the state requires.
Luisa is a unit on my home health census in the Rio Grande Valley — a woman who drives 38 miles between the three patients I assign her in a single shift and who is compensated only for the time her hand is on a patient’s cup, not for the time her car is on the asphalt. The patient who receives the cup is your mother. Or your father. The Lord keeps the copay low; I keep the difference. The Medicaid check that pays for that cup passes through a state contractor that passes through a regional broker that passes through me, and I keep the margin at every layer.
Luisa’s wage is $14.12 an hour. The minimum wage for this county is $7.25, so I am not, technically, underpaying her. I am paying her exactly what the law requires and exactly what the market will bear. She qualifies for Medicaid — the very program the CBO is tracking — because her income is below the poverty line for a household of one. She qualifies for SNAP. She qualifies for the housing voucher that keeps her in the apartment she leaves at 5:30 in the morning. The state pays for her body between shifts. I pay for the shifts.
$0.47.
That is what I keep per hour by not offering health insurance — because she is on the state plan, so I do not need to. The mileage reimbursement and the per-diem classification save a further $0.12 and $1.03 per hour respectively, but the $0.47 is the one I want you to hold. The state insures my workforce. I bill for the service the workforce produces. The workforce cannot afford to see a doctor without the state plan, and the state plan exists because I pay a wage that keeps her below the threshold. The loop closes. The $0.47 sits in the margin. 52 weeks. 40 hours. 300 Luisa-equivalents. Do the multiplication. The number is not small.
Now widen the frame. The Treasury absorbs the cost of keeping the body alive between shifts. I keep what the body makes during the shift. The board wants to call that a crisis. I want to call it a contract. The state has agreed, through every Medicaid expansion and every matching-rate negotiation, to underwrite the maintenance of the labor force that produces the services its citizens require. The employer captures the yield. This is not a loophole. A loophole is something you find. This is the architecture.
I am told the CBO projects insolvency. I have not looked. The $49 billion is here now. The unit on my census is here now. The quarterly submission is compliant, and I am submitting it on time.
Omar is Luisa with a different address and the same arithmetic — same corridor, same margin, same per-diem classification, same state plan that keeps his body functional between the 6 a.m. arrival and the 2 p.m. dismissal. The patient he serves is on your copay statement under the durable medical equipment line. I close the loop twice because the math is the same on both sides of the county line and because one case you can call an anomaly. 2 cases is a model.
Now the principle the case was only an example of: the arithmetic is not dying with me. It is being assigned in programs besides my own, each of which graduates people whose job is to set a wage below a threshold and name a savings above a margin.
The young woman who set Luisa’s wage — who calculated the exact hourly figure that would keep her below the Medicaid income threshold while passing the state’s minimum-wage audit — sat in my seminar. Second row. She arrived sentimental. She believed a worker’s years of service built equity in the schedule. I cured it by October. I gave her a rubric: “Cost-Bearing Classification — Personnel vs. Fixed Overhead.” She marked Luisa as personnel on the first draft. On the revision, she understood.
She ran the subtraction faster than I did.
I say that with a teacher’s pride. The woman who now trains intake coordinators across four provider networks in the corridor holds a certification that bears my signature.
Exodus 21:20-21 records the following: “When a man strikes his slave, male or female, with a rod and the slave dies under his hand, he shall be avenged. But if the slave survives a day or two, he is not to be avenged, for the slave is his money.” The law distinguishes death from discipline. The modern version distinguishes the shift from the space between shifts. The state pays for the day or two. I keep the property. The law has been on the books for 3,000 years. The Journal board is merely the latest to discover the arithmetic on the wrong side of the ledger.
Some vessels are made for honor, some for common use. God organized the poor among us, and I organized the schedule.
Sterling A. Varice holds the Hayek-Friedman Chair and serves as Dean of Instruction at Warden University’s College of Business and Economics in Richmond, Virginia. He is the author of three textbooks: Divine Mandates for Labor Utilization, Social Obligations for Profit Maximization, and Calibrated Deprivation: A Manager’s Guide to Employee Motivation.