Rhode Island’s Medicaid Block Grant
To date, Rhode Island projects that by various new measures — focusing on community-based care that keeps seniors out of expensive nursing homes, for instance, and medical supervision that can keep children and adults out of emergency rooms — the state has saved $100 million. The flexibility to plan care has also helped reduce its projected Medicaid spending rate to 3% from 8% annually.
More on the broken Medicaid safety net in the WSJ.
What do these projects entail? State-based care seems like a great idea — what an excellent way to ensure solutions are fit to local needs!
This deal was negotiated by a Republican HHS director. His Democratic predecessor has disavowed any claim of huge savings. Democrats and Republicans will never agree on the results because positive results for Republicans is a disaster for Republicans (and vise versa). Democrats want incentives that maximize spending on the poor and allow the most flexibility in amount of federal funding (i.e. the current system of federal matching). Republicans want to maximize fiscal restraint and maximize the flexibility of state control (i.e. block grants).
However, from an economic standpoint, it makes sense to let states decide how to administer their own programs; and to decide how much money in taxes each state extorts from taxpayers to fund indigent care.
block grants seem like a good idea
This goes to show the importance of keeping the government from running the national health care system as a whole. If states are permitted to run their own programs in a way that they only know would work best for them, then all 50 states could probably save as much health care dollars, if not more, as Rhode Island did.
As Ghandi once said “As human beings, our greatness lies not so much in being able to remake the world – that is the myth of the atomic age – as in being able to remake ourselves.” If states start by changing and improving within themselves, then that will reflect in the entire nation and benefit everyone in the long run.
Let states run their own programs.. They seem to be much more efficient at spending more wisely.
Howard and Sykes offer valid arguments for the efficiency block grants, but it is important to consider the method of distribution separate from the amount spent.
The recent house republican plan to convert medicaid to block grants fails to do so and instead cuts 38% of funding!
(http://capsules.kaiserhealthnews.org/index.php/2012/10/gop-plan-would-cut-medicaid-by-1-7-trillion-study-says/)
That is quite a bit more than “The flexibility to plan care has also helped reduce its projected Medicaid spending rate to 3% from 8% annually.”
I’m not sure how applicable Rhode Island’s (Pop. 1,051,302) results are to states like Texas (Pop. 25,674,681).
It’s much easier to be flexible when you’re 25x smaller.
@Jimmy,
Yes, I agree. States are much closer to the issues affecting them and can handle them in a more efficient manner.
+1 Jimmy
That’s a good start, but it’s hard to tell if such a program would be transferable to the other states with the same results.
That’s a lot gained from what seems like little work. Just shows how bloated the government programs have become.