NCPA - National Center for Policy Analysis


August 31, 2005

Consumer-directed health care is gaining support from many states, especially Colorado, where Consumer-Directed Attendant Support for the severely disabled (CDAS) is thriving, says Wall Street Journal contributor John Andrews.

In 2002, CDAS had only four clients, today it has 146 participants, each newly empowered to hire and fire their own caregivers. It has improved quality of care and patient satisfaction while keeping costs down; recently, legislators approved offering the option for 33,000 Medicaid recipients statewide in 2006, says Andrews.

By giving participants the right to bypass the provider agencies otherwise required under Medicaid rules for home- and community-based services, CDAS has reduced the instances of abandonment almost to zero and is saving the government money, explains Andrews:

  • With Medicaid expenses surging faster than almost every other budget line in almost every state, such savings are welcome news to policy makers.
  • Taxpayers in Colorado have seen their share of Medicaid -- matched dollar to dollar with federal funds -- increase almost 33 percent since 2001; another 22 percent jump is predicted by 2010.
  • In its first two years, CDAS showed average monthly spending at 21 percent under budget ($3,925 per client allocated, $3,131 expended) and half of any monthly savings a CDAS client realizes go into a personal fund for approved purchases to further his or her independence.

Several other states are pushing for patient power:

  • Gov. Mark Sanford's (R-S.C.) proposal will give Medicaid clients personal accounts from which to buy their own health insurance and pay for incidentals.
  • Florida's Jeb Bush, Vermont's Jim Douglas and Arkansas's Mike Huckabee are also striving for reform.

The goal is clear, first give patients the freedom to choose, then align incentives so the choices go less toward a demeaning, inefficient government delivery model, says Andrews.

Source: John Andrews, "Rocky Mountain Medicaid," Wall Street Journal, August 18, 2005.

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