May 28, 2015

The medical industry has announced a plan to reform the Medicaid budget mess through provider led entities. These are groups of doctors and hospitals who merge together to treat patients under a fixed price contract or capitated model instead of fee for service.

Like managed care insurance companies, provider led entities are designed to make Medicaid budgets more predictable. That’s good.

Only check the fine print in the medical industry’s plan. They don’t want to begin for four years or more. That means the Medicaid budget keeps growing. For example, the Governor’s budget shows a billion dollar annual Medicaid budget increase this biennium or $300 million in state funding.

Under the medical industry plan, we must wait a year or more for a Medicaid waiver from Washington and then three years for partial implementation and five years for full implementation. According to Moody’s Analytics, state spending on Medicaid will increase by $800 million by 2018 which seems to be the earliest the medical industry’s provider led entities would fully kick in.

Iowa Governor Terry Branstad proposed managed care company Medicaid reform a few months ago and expects to begin saving taxpayers money this year.

In the sweet by and by is a beautiful Christian hymn. But Medicaid budget reform is needed now, not in the sweet by and by.