Medicaid reform project leads to state recommendations

Having worked on issues related to Medicaid populations for almost 10 years, I was delighted when I was asked to participate in Georgia's effort to review alternative Medicaid reform options and to help develop recommendations that would eventually be put forward to the governor. Medicaid is the joint federal/state program that provides for the health care of certain categories of the state's poor population: single heads of households with dependent children, pregnant women/infants and children, the aged and the disabled. Georgia spends more than $3 billion annually in combined federal and state dollars under its Medicaid program. Given the proposed federal legislation for block grants for Medicaid, as well as the continued anti-tax sentiment among the populace, Georgia, as are other states, is currently seeking better ways to provide Medicaid services and to generate savings in order to live within budget constraints. This pressure is compounded in Georgia because its governor has mandated that 5 percent of the Medicaid budget be re-directed to state expenditures on education. In addition, Georgia's legislature recently repealed the state's sales tax on food, thereby putting further pressure on the state's coffers.

To help look at issues in an organized and informed fashion, the Georgia Coalition for Health agreed to review other states' reform efforts, undertake new research, and review input from stakeholders in order to make recommendations to the governor. This process took place over the past 12 months with more than $500,000 spent on the expertise of actuaries, economists and other professionals. I, along with these other researchers and consultants, was hired by the Georgia Health Policy Center of Georgia State University to look at these issues. It was extremely satisfying to use my expertise as a health economist who is familiar with the Medicaid program to evaluate the state's Medicaid data and summarize research findings to the coalition. It was also interesting to see that Georgia is unique in the breadth of its review of other state's actions and its completion of new research before making a decision about the state's reform actions.

In this process we helped the coalition set up an evaluation framework for use in comparing the outcomes of each of the reform options. This framework included: 1) identifying the cost savings achieved; 2) evaluating the impact on enrollees; 3) considering its impact on markets/communities; 4) measuring its impact on providers and 5) evaluating its impact on the state's "safety net." The safety net was defined as those providers obliged to provide the services regardless of ability to pay (e.g. public health clinics).

The coalition reviewed three basic options for both acute and long-term care services. I helped provide the coalition with estimates of the dollar impact of these options on the Medicaid revenue that would be received by hospitals, primary and non-primary physicians, pharmacies and nursing homes that now serve Medicaid clientele. I also helped identify areas of the state in which providers appeared most vulnerable to these revenue changes. In this process we identified Medicaid market areas in which providers, and hence communities, were at risk. This type of information helped the coalition in making decisions about which reform options were most viable and the time frame over which they could be implemented without harming these areas.

Although our analysis of the reform options showed that none of them resulted in all of the short-term savings mandated by the governor, it did show which options were best in providing savings over the long-term, improving access and maintaining quality of care for Medicaid enrollees. The coalition has voted on a plan to move more Medicaid enrollees into HMOs and other managed care programs and a plan to allow more of the elderly and disabled who are in need of long-term care to receive this care in their homes. We found this to be consistent with other states' actions in that most states had included some form of managed care in their efforts to achieve efficiencies in their Medicaid program.

As I review this years' activities, I realize I have benefited from watching the political decision-making process as our research was translated to the coalition in a series of public meetings. It was also rewarding to integrate the academic "ivory tower" life with the "real world" of policy deliberation and formulation in such an important endeavor. The coalition will make its final recommendations to the governor this month. As researchers we may get a chance to evaluate the outcomes of their actions.

Kathleen Adams is an associate professor in the Rollins School of Public Health.

Return to the December 9, 1996 contents page