Medicaid, budgets and patients part one: The cost of change

This week, AstraZeneca is looking at changes in state Medicaid programs and how they impact patients

At a time when all levels of government – from cities and towns to states to the federal government – are taking a hard look at their finances, many states are seeking to find savings in their public health programs.

Some states – including New York, Kentucky, Texas and Ohio – are looking to reduce costs by considering moving their Medicaid pharmacy benefit from a fee-for-service model to a managed care system.

At its essence, this means these states would no longer pay for health care services separately for individual patients – and instead would impose a cap on total spending for patients that is below the fee-for-service model.

As John Iglehart of Health Affairs recently noted:

(The) most transformative change that states are embarking on is contracting with private managed care plans to provide care for more beneficiaries – especially the most expensive ones, the aged and disabled. And although the evidence suggests that states are in fact likely to achieve billions of dollars in savings through these arrangements, the impact on beneficiaries’ quality of care or their health outcomes is a major unknown.

What is AstraZeneca’s view of these potential changes?

Over the next three days, we’ll be taking a look at different aspects of the proposals at the state level – most notably:

  • Under this model, who is making the decisions for patient care?
  • Do these changes put at-risk patients in greater jeopardy?
  • What kind of patient protections should be included in any Medicaid model?

The first post will go up a little later today.

Finally, here are some definitions of the programs we will be discussing in the posts:

Medicaid is a public health insurance program run by the states in partnership with the federal government. It is available to low-income residents who do not have private health insurance and meet certain eligibility requirements, which vary by state. More information is available at the Centers for Medicare and Medicaid Services website here.

Fee for service is the traditional Medicaid program in which health care providers are reimbursed for the individual services they provide. The state of Indiana provides useful information on the program here.

As noted above, Medicaid managed care plans provide set dollar benefit amounts for all services per patient – rather than reimbursing for individual services under the traditional fee-for-service Medicaid program. Read more here.