Ohio's Medicaid cost could jump 49 percent

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Ohio's Medicaid cost could jump 49 percent
Monday, January 31, 2011  02:51 AM
By Catherine Candisky

The Columbus Dispatch
That's a 49 percent jump in the state's share of costs for the health-care program covering more than 2 million poor and disabled Ohioans, pushing to $4.9 billion the cost to the state for the next fiscal year.

Most of the increase to Ohioans is due to the loss of federal stimulus money. The federal government has been covering a higher share of Medicaid costs to help states during the recession, but that help ends June 30. In addition, state officials are projecting an increase in enrollment and utilization of services, both of which also will drive up costs.

Fresh off his appointment to head the new Governor's Office of Health Transformation, Greg Moody shared those numbers last week with representatives of hospitals, nursing homes, insurers and other Medicaid stakeholders as he sought their help to rein in costs.

Doing nothing, Moody said in an interview, is not an option.

The other number he and his staff are keenly aware of: the days until Kasich must deliver his state budget plan for the next two years - 44 days from today - on March15.

Despite the short time frame, Moody said his goal is to put a plan in place that will improve people's health while lowering program costs. High on the administration's to-do list is expanding preventive care to keep people from getting sick or developing chronic conditions and better coordination of care to avoid duplicating services and costly hospital admissions.

Another priority will be to expand home and community-based care for the elderly and disabled to reduce nursing home costs which now gobble up about 20 percent of Medicaid costs. Ohio has tried with some success to rebalance its long-term care system but still lags behind other states.

Moody said the administration also will evaluate the rates paid to hospitals, nursing homes, doctors and other care providers, which could bring more immediate savings than efforts such as preventive care.

He said he has not been given any dollar amount to cut from Medicaid.

"It's going to be tough going and there are going to have to be sacrifices," John Begala, executive director of the Center for Community Solutions, a Cleveland-based nonprofit, said after meeting with Moody last week. "It's fair game for everybody to be a budget hawk on Medicaid, and there is no way this happens without providers stepping up and accepting something less than they have."

The federal stimulus money allowed Ohio and many other states to avoid throwing people off Medicaid or eliminating some of the services covered, but that may change.

Kasich was among 33 Republican governors who earlier this month asked the Obama administration to let states cut Medicaid enrollment without losing federal aid. Under the new health-care law, states that restrict eligibility in their programs lose federal support, which generally covers about 60percent of costs.

The state's $4.9 billion share is up from $3.3 billion. Total program costs - state and federal shares combined - are projected to top $15.3billion next year and climb to more than $16.5billion the following year, according to Moody's office.

"It's a big number," said Tim Maglione, of the Ohio State Medical Association.

"We are focusing on the kinds of things that can promote savings and promote the concept of wellness and prevention. It may not have a dollar savings today, but it can generate savings down the road."

The physicians' group will recommend expanding preventive care, chronic disease management, programs that reward positive outcomes and additional protections from medical liability it believes would save money.

"Everyone in the system is going to have to come to the table with efficiencies in their own systems," said Kelly McGivern, president and chief executive officer of the Ohio Association of Health Plans, which represents health insurance companies.

Association members coordinate care for 1.5 million Medicaid recipients, mostly children and mothers. McGivern said the efforts have saved $2 million over the current two-year state budget and that more money could be saved by expanding those efforts to services such as prescription drugs and mental-health.