February 9, 2010

North Carolina Insight report shows difficulty of controlling health care costs

Posted at 12:00 PM by Adam Linker

I just had a chance to read the NC Insight report on Medicaid that is garnering statewide media attention. Despite my cheeky post yesterday the report does a good job at describing the challenges faced by Medicaid.

Medicaid costs are escalating along with health costs in general and squeezing the state budget. During recessions the Medicaid rolls expand just when the state is collecting less revenue. Prescription drugs are expensive. Nursing homes are expensive.

Insight does not offer any new policy recommendations. Instead it highlights some of the programs that are already saving money. That’s not a knock. No one has any practical ideas for saving huge amounts of money that are politically feasible.

The report does mention shifting more costs to the federal government — especially for enrollees in both Medicare and Medicaid. I would say that the feds should shoulder most Medicaid costs while setting minimum federal standards for the program. The quality of Medicaid varies drastically across the country with some programs paying paltry sums to providers. We need Medicaid to look more like Medicare. Federal reform would move us in that direction. The Senate health bill would pick up 95 percent of the bill for newly eligible Medicaid enrollees. That’s probably a first step toward federalizing the entire program.

We also need Medicaid to provide coverage to low-income North Carolinians. Insight uses the common nomenclature that Medicaid is a program for the poor. But low-income childless, able bodied adults don’t qualify. It does a good job of catching those who hit the safety net, but it’s a patchy net at best.

The first step in fixing Medicaid is to pass national health reform. We should also start taking a hard look at evidenced-based medicine and ask if the state should pay for services that don’t improve care. We can’t control Medicaid costs without controlling health care costs in general. And we can’t control costs in general without reforming our health care system.

We all know the problem and we know the solution. Now we need the political will to act on that knowledge.

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