Medicaid And The Limits of State Health Reform
With the defeat of national health reform, many liberals have looked to the states as the source of health policy innovation. At the same time, many in the new Republican majority and several governors also support increased state control. In contrast, Michael S. Sparer convincingly argues that states by themselves can neither satisfy the liberal hope for universal coverage nor the conservative hope for cost containment. He also points to two critical drawbacks to a state-dominated health care system: the variation in coverage among states and the intergovernmental tension that would inevitably accompany such a change. Supporting his arguments, Sparer analyzes the contradictions in operations and policies between the New York and California Medicaid programs. For instance, why does New York spend an average of ,286 on its Medicaid beneficiaries and California an average of ,801? The answer, the author suggests, is rooted in bureaucratic politics. California officials enjoy significant bureaucratic autonomy, while the system in New York is fragmented, decentralized, and interest-group dominated. The book supports this conclusion by exploring nursing home and home care policy, hospital care policy, and managed care policy in the two states. Sparer’s dissection of the consequences of state-based reform make a persuasive case for national health insurance. Author note: Michael S. Sparer is Assistant Professor of Health Policy in the School of Public Health at Columbia University.
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Reform Medicaid First: Laying the Foundation for National Health Care Reform
As Congress contemplates major revisions to America’s health care system, two leading health economists warn that significant differences among state Medicaid programs will hinder national health care reform. Thomas W. Grannemann and Mark V. Pauly argue that Medicaid will need to be reformed as an early step in any serious health care reform effort. While states such as Mississippi and Nevada spend as little as ,000 per poor person annually, New York and Alaska annually spend more than ,000 per Medicaid patient. Large differences remain even after correcting for cost-of-living and medical-price differences. This imbalance among states creates an uneven and unstable foundation for any national program to address the needs of uninsured Americans. The authors offer principles for reform designed to encourage equity, efficiency, and accountability in all publicly funded health care programs. They suggest changes in provider payment methods and federal/state financing designed to promote interstate equity, equality of payment across settings, claims-based accountability, provider network control, and value-based cost containment. Such reform will require upfront changes in Medicaid to improve access to high-value health care for low-income persons (particularly those in low-Medicaid-benefit states) and to help slow the rate of growth in medical costs. These changes will level the playing field for state programs and provide a crucial foundation for further national reform.
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