Testifying at Tuesday’s hearing of the state Budget Planning and Management Commission, Health Policy Institute of Ohio Interim Director Greg Moody told the bipartisan legislative panel that unless the federal government provides more funds or the state takes action, the Medicaid program is going to cost Ohio an additional $1 billion from 2011 to 2012 (Source: “Medicaid to add $1 billion to state budget quandary,” Columbus Dispatch, July 20,2010).
And this comes at a time when the state is already expected to face a budget shortfall estimated at between $5 billion and $8 billion.
Moody said his projection is based on the assumption that federal matching funds, which were increased as part of the federal stimulus package last year, return to normal levels and the state experiences a 6.1 percent increase in spending, as projected by the Congressional Budget Office. Moody's presentation is available here (pdf, 10 pages).
While unlikely to remedy short-term budget challenges for the Medicaid program, Moody outlined a series of cost containment strategies that could reduce long-term costs for the program:
- Focus on prevention and primary care
- Care coordination and disease management
- Price and quality transparency
- Payment reforms that reward value
- Behavioral/physical health integration
- Rebalance Medicaid long-term care
Another speaker at the hearing, John Begala, executive director of the Cleveland-based Center for Community Solutions, said among the short-term options that the state may consider are capping hospital payments and reducing the 12.5 percent administrative allowance for HMOs. Those recommendations were included in Community Solution’s recently published report on the state budget, “Thinking the Unthinkable: Finding Common Ground for Resolving Ohio’s Fiscal Crisis.” (pdf, 50 pages)
