Backgrounder

An Evalua⁠t⁠⁠i⁠on of ⁠t⁠he P⁠i⁠lo⁠t⁠ Projec⁠t⁠ ⁠t⁠o Reform Flor⁠i⁠da’s Med⁠i⁠ca⁠i⁠d Program

By: The James Madison Institute / July 1, 2008

The James Madison Institute

Backgrounder

July 1, 2008

Two factors caused Florida to act decisively in 2006 to reform its Medicaid program beginning with a pilot project in Broward County and the Jacksonville area. The purpose of the pilot project was to provide policy makers with an opportunity to obtain a fair evaluation the reforms being tested. The experiment was cleared to proceed after Florida officials obtained a waiver from the Federal government, which also has an interest in exploring ways to contain costs and improve the quality of care.

Of the two factors that prompted the state to act, cost was inarguably a major concern. The trend in state spending on Medicaid was simply unsustainable. Had it continued unabated, the program could have consumed roughly 60 percent of the projected state budget by 2015. This would have forced either (a) a large tax increase, (b) severe cutbacks in education, corrections, and other important programs the state funds from its finite supply of general revenue, (c) major reductions in the compensation paid to Medicaid’s providers at a time when their costs were rising, further discouraging those providers from accepting Medicaid patients, or (d) some combination of all of the above.

Although money was a major factor in motivating the state to act, it was not the only factor. The other concern was the inconsistent quality of care provided to Medicaid’s clients. Some patients have reported their extreme dissatisfaction with the care they or their children received through Medicaid. A chronic complaint is that the Medicaid clients who were dissatisfied have had little recourse.

One feature of the pilot project was to give Medicaid’s clients as many choices as feasible, along with counseling to assist them in making a selection that best suits their needs. Another feature was an emphasis on the types of care that help patients maintain their “wellness” rather than merely treating them when they become ill. This method of reining in costs has multiple benefits beyond merely controlling costs.

After evaluating the evidence obtained thus far, we conclude that Florida’s pilot project not only ought to be continued in the places where it is already underway, but also that the reforms instituted under this pilot project ou

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