Speakers at a session on "What Really Happened and What Will Happen to Health Programs in Budget Cuts" at the 15th annual State Health Policy Conference held in Philadelphia, sponsored by the Portland, ME-based National Academy for State Health Policy, cited a need for state agencies to be much more explicit in defining outcomes for Medicaid and other health programs and then measuring their success.
This fits closely with the notion in the American Legislative Exchange Council proposal that state programs that can demonstrate success should be rewarded.
Neil Bergsman, executive director of Maryland’s Department of Budget and Management and president-elect of the National Association of State Budget Officers, told the group that fundamental changes in Medicaid are going to be needed in the long term, and that those changes will require "relating Medicaid spending increases to real-world health outcome results."
"My guess is that it’s going to be necessary to demonstrate a strong effort in controlling expenditures," Bergsman said, "before policy-makers will consider general tax increases. In an election year, what you’ve cut until now won’t count."
Bergsman said that agency personnel involved in the struggle for Medicaid funding in a time of limited and declining budgets need to understand that the battlefield has changed from what it was 10 years ago. "Performance budgeting is really happening in states now," he declared. "By and large, the competition is ahead of Medicaid in formulating outcome measures and using them to sell budget increases. You need to catch up. You need to point to outcome results. Just looking at enrollment times utilization times rates is not going to be as compelling an argument as it was 10 years ago. Simply providing coverage — having a card in your wallet — is not an outcome. You have to do a much better job of looking at the health status of your clients and pointing to what the increased funding you are asking for does for those people."
Another panelist, Rockefeller Institute of Government senior fellow James Fossett said that to date, other areas of state budgets have taken bigger hits from budget cutters than has Medicaid. He said possible approaches for those who want to help Medicaid could be to show state officials how they can bring in more money, talk about Medicaid as an economic development program that supports many jobs in local communities, and try to develop supportive constituencies.
The notion of fundamental structural changes to the Medicaid program brought a question from panel moderator Linda Wertz, Texas deputy commissioner for Medicaid and Children’s Health Insurance Program, on how there can be discussion of fundamental change when there are mandatory services, mandatory providers, mandatory populations, and mandatory reimbursement levels.
Bergsman suggested that the federal government will have to change the program, giving states flexibility to identify and measure the outcome results that they try to achieve for low- and moderate-income citizens and also provide more flexible funding arrangements with the federal government that allow states to implement strategies affecting provider reimbursements and public health interventions.
Fossett said it will be important for states to invest in systems and staff who know how to set and measure outcomes. States, he said, are caught between being able to get data needed to show they’re making the kind of impact they want to make and the market flexibility needed as purchasers to be able to change along with developments in the larger marketplace.
From the audience, Minnesota health commissioner Jan Malcom said that using outcomes measurements produces a need to have an impact on preventable conditions. "We’re not doing nearly enough to look at what’s driving the trend lines in Medicaid expenditures — health conditions and their underlying causes," she said. "We need better data on the impact of prevention strategies."