NCPA - National Center for Policy Analysis

How To Reform Medicaid To Put "Patients First"

May 3, 2002

Medicaid, the federal-state health care program for the poor, has grown from $1 billion in 1967 to $226 billion in 2001. Critics say Medicaid beneficiaries receive a "second tier" level of care; however, the program could be reformed to put patients first and provide better care.

The problem with Medicaid, say analysts, is that it is designed as a "defined benefits" welfare entitlement instead of a "defined contribution" program that emphasizes choice, competition and consumer information.

  • For example, once an optional benefit is conferred upon one eligible group, it must be conferred upon all those eligible.
  • If the program were reformed, however, the focus would change from cost containment to quality assurance and patient satisfaction.
  • Opposition to serious reform won't come from the federal government, say experts, but from entrenched, state bureaucracies.
  • However, Congress should return Medicaid's administration to the states in ways consistent with welfare reform.

A consumer service orientation is particularly important, say experts, because Medicaid serves those with limited knowledge about choosing a physician or accessing a health care system. Medicaid enrollees are poor, disproportionately minority, less educated, non-English speaking, disabled and include many elderly people.

Source: Richard Teske, "Abolishing the Medicaid Ghetto: Putting 'Patients First,'" State Factor, April 2002, American Legislative Exchange Council.

 

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