NCPA - National Center for Policy Analysis


June 24, 2008

Typically, Medicaid enrollees face restricted treatment options and limited access to health care.  At the same time, they are sheltered from health care costs because they pay nothing out of their own pockets when they receive care, says John C. Goodman, President of the National Center for Policy Analysis (NCPA), in his new book "Handbook on State Health Care Reform."

This disconnect between patients and costs has led to a dramatic increase in public health care spending, says Goodman.  All this could change, however, if the government were to implement the following Medicaid reforms:

  • Free patients: One idea for improving Medicaid is to empower consumers in the medical marketplace by allowing them to control some of their own health care dollars.
  • Free providers: Instead of letting Medicaid's payment rules get in the way, doctors and other health care providers should be rewarded for raising quality and lowering costs.
  • Use less-expensive therapies: Increasing physician fees for examinations, tests, and procedures that can be performed in a doctor's office would increase patients' access to health care and reduce unnecessary reliance on hospital emergency rooms.
  • Use less-expensive providers: Medicaid could function more like the private sector health plans, selectively contract with hospitals that perform a high volume of specific procedures and demonstrate a strong relationship between volume and quality.


  • Use less-expensive drugs: Medicaid patients should be given control of some of their own health care dollars, so those who prefer brand-name drugs could purchase them if they pay more, or select substitutes at a lower cost, as those in private insurance plans do.
  • Use the private sector: Medicaid should let specialists compete for patients, by rewarding providers able to provide higher-quality services for less cost.
  • Pay more for better results: Medicaid should contract only with providers that institute quality control programs.

Source: John C. Goodman, "Ten Steps to Reforming Medicaid," Heartland Institute, July 1, 2008.


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