ISSUE IN BRIEF:
Medicaid Reform
Staff
Contact:
Total (all funds)
spending on Medicaid will exceed $44.5 billion in 2005-06. Over the last
five years Medicaid spending was responsible for 35.5% of the total increase
in all funds spending; education was next at 9.8%.
Medicaid costs
are now the biggest driver of state spending increases. The inability
to control these costs is limiting the state's ability to meet other
pressing needs while burdening taxpayers at the state and local levels.
At the county
level, Medicaid costs have forced counties to significantly increase
real property and sales taxes. Five counties are approaching their constitutional
tax limit.
Despite its high
costs, providers and payers are frustrated by a system whose fragmented
structure serves neither the recipient nor the taxpayer well.
Business Council Priorities
It is time to
adopt fundamental reforms which will improve health outcomes and reduce
costs. Among the reforms which will aid patients and taxpayers alike
are the following:
- Providing
for coordinated care for that portion of the medicaid population not
currently in managed care. Many of the individuals in this category
have conditions which are most in need of, and which would benefit most
from, well designed coordinated care plans. The 18% of the Medicaid
population not in managed care represent 48% of the cost of the program.
- Expanding
the disease state management demonstration program enacted as part
of the 2004 budget into a statewide program. The benefits of disease state
management are well recognized and utilized by leading health plans
and systems. The state needs to move aggressively to encourage a vastly
expanded program of disease state management.
- Rightsizing
the long term institutional care capacity in this state by providing
for expanded, lower cost settings while converting or downsizing higher
cost settings. The long term care community has long argued that the
state's current policies have resulted in having fewer lower cost options
available for caring for the elderly.
- Adopting
the "Santulli" plan for providing a local county option on the design
of benefits offered under Medicaid. Local governments should have the
option to tailor the plan to meet the needs of their Medicaid population.
These proposals
offer the potential for significant savings and significant improvement
in the care provided Medicaid recipients. Others have proposed or will
be proposing reforms which we also should be considering. Our list of
reforms does not purport to represent the full compendium of changes
which should be considered and supported. Rather, they focus on four
key recommendations which we believe should be part of any comprehensive
reform package.
If adopted, the
state would be in a position to cap or to assume the local cost of Medicaid - a
position we support if cost containment reforms are enacted and savings
at the local level are returned to the taxpayer.
