August 10, 2005

Other Southern States Attempt to Curb Medicaid Costs

A recent article in The Augusta Chronicle documented the ways in which Georgia and South Carolina are dealing with the rising costs of Medicaid in the face of impending Federal cuts. Even without Congressional cuts, many states would still be facing a financial crisis due mainly to the costs of prescription drugs and long term care. These cuts have forced states to develop innovative ways to address the rising needs of individual's health care and less money to fund the programs.

South Carolina has implemented a program that calls for Medicaid recipients to be given personal health care accounts to pay expenses. Patients could then choose an option that they feel would give them the best service for their needs. The South Carolina plan also hopes to slow the growth of the costs of the program by promoting competition among companies offering different plans.

Patients who spend their money wisely could be rewarded by giving them some of the money back or receive some sort of a gift certificate. But this still raises questions about people who do not spend their account well, or still have expenses beyond what they were provided. This system could also encourage people to ignore potentially serious health concerns so that they can keep some money from their account.

Georgia's plan is similar to a Florida model, and turns to managed care program. The state's Department of Community Health selected companies to enroll the state's more than one million Medicaid and PeachCare for Kids patients into the program. The program has divided the state into 6 regions, with each region serviced by a couple different companies that have experience running managed care programs. The state hopes to save tens of millions of dollars by paying the companies a flat rate per patient, but it remains to be seen whether those savings will materialize. The program will stress preventive care and provide primary care physicians, and attempt to educate patients to seek treatment before their illness becomes critical and more costly to treat.

Neither of these programs is perfect, but both make attempts to address this critical issue. The fact remains that something must be done, because the status quo will be inadequate to address the nations healthcare needs in the future.