Posted by
John R. LaPlante on Wednesday, July 26, 2006 1:09:47 PM
According to the Kaiser Family Foundation, Medicaid pays for health care treatment of
55 million people.
Not surprisingly, Medicaid is a large challenge for state budgets. There are actually two challenges: long-term care (nursing homes) and acute care (everything else). We’re going to focus on acute care first.
People who receive health care through Medicaid are not terribly satisfied. Neither are taxpayers, who face the prospect of out-of-control budgets. And of course, health care providers don’t care for the deeply discounted payments they receive from the bureaucracy.
One of the latest reform proposals for acute care comes from the Wichita, Kansas-based Flint Hills Center for Public Policy. Reforming Medicaid in Kansas: A Market-Based Approach (available in PDF) offers policy makers in Kansas (and elsewhere) ideas for bringing this program under control.
In reforming acute care, one key is to give people financial incentives to be active consumers.
Michael Bond recommends that states use actuarial science to convert government spending into individually tailored credits that people can use to purchase the care they need from competing providers.
It’s part of a broader movement towards consumer-directed care, which is already underway. When people have some skin in the game, they’re going to be more involved, which will lead to better outcomes in both finances and in personal health. In both the private and public sector, health care will be improved if people move from being passive dependents to active consumers.