• How will states “innovate” when it comes to Medicaid?

    The House budget reduces Medicaid funding and proposes to deliver it to states in block grants in an effort to get them to “innovate”. But what does that really mean?

    I have a post-up at the JAMA Forum on this that I hope you’ll find worth your time. Go read!

    @aaronecarroll

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    • One way of squaring the circle is to focus on the relatively few high cost Medicaid recipients and find higher value, lower cost services that better fit their needs. That’s the direction Oregon is trying to move in with the CCO concept. Of course, that’s easier said than done.

    • Your commentary on the MAMA Forum is excellent and says succinctly what many people cannot say expansively.

      I think everyone understands what the conversion to block grands is about. It means cutting Federal spending on health care for the very neediest of citizens and escaping blame at the Federal level for those cuts. As for what will happen, look for all three of what you list.

      One thing that should also be mentioned is that Medicaid is a situation where the benefits of health care go to the recipients but the money flows to the health care system. A reduction of funding to the health care system will not result in a reduction of costs as the industry is a fixed cost dominant industry.

      This means that either health care providers will be denied resources, or what is more likely the charges to non-Medicaid patients will have to rise cover the funds lost in Medicaid funding reductions. So the savings to the general public will not take place, lower government spending will simply be replaced by higher private spending.

      But as we said, politicians will escape blame, and that is the key element of the policy.

    • What it means is that Congress wants to cut costs and doesn’t have a single, viable idea of how to do it. So, they are dumping the problem on the states and hoping they are smarter.