Medicaid costs crush budget

• By MARSHA SHULER
• Advocate Capitol News Bureau
• Published: Dec 6, 2008 - Page: 14A - UPDATED: 12:05 a.m.

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The growth of Louisiana’s Medicaid program must be brought under control or it will soon consume a larger share of state taxpayer dollars than are invested in education, the state’s health chief said Friday.

In 2004, Louisiana spent 10 percent of available state revenues on Medicaid — the government’s health insurance program for the poor and uninsured, said Alan Levine, secretary of the Department of Health and Hospitals.

Today, Louisiana is spending 16 percent of its revenues to pay the state’s share — some 28 percent of the $7 billion program — and by 2011 that will grow to 21.5 percent, he said.

Medicaid provides insurance for about one-fourth of the state’s residents.

“This has the ability to eclipse spending on education,” Levine said. “You cannot enhance our economy without staying true to pursuit of an improved education system.”

Levine charted the financial challenges of Medicaid as he addressed the Council for A Better Louisiana’s annual meeting.

Levine said the Jindal administration’s proposed health care  restructuring plan would curb  Medicaid spending growth while improving the health of people  who rely on it.

While the state is investing heavily in health care — 20th highest in Medicaid spending in the country — the health of its residents has not improved, Levine said.

“What are we buying for our citizens? We have to challenge ourselves” and start focusing on “paying for results, paying for performance,” said Levine.

The administration’s health initiative would move away from a “fee for services” system where physicians and other providers would bill for services and the state pay claims.

The Jindal plan would launch experiments in four regions of the state with a model where the state would pay a “premium” to private insurance firms who would be responsible for putting together a coordinated care delivery system. There would be incentives for improving patient health and penalties when there are failures.

The plan has encountered some opposition from those who oppose the private insurance route.

CABL, a not-for-profit public interest group, has come out in support of the general proposal outlined in the Jindal administration’s “concept paper.” Officials of the group lobby the Legislature for state law changes in a variety of areas. Health care is one of CABL’s priorities in 2009.