Physicians_1

Physicians_1 - Medicaid and Physicians I PAM 435 March 4,...

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Medicaid and Physicians I PAM 435 March 4, 2008
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Reminder: No Class on Thursday, March 6 Midterm covers material through March 4
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Objectives for Medicaid Lecture structure of Medicaid how Medicaid is financed; who pays for it? why Medicaid needs to be restructured some possible Medicaid policy changes Today
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How is Medicaid Financed? Costs are shared between the federal and state governments Federal government’s share is based on a State’s per capita income In Mississippi, state with lowest per capita income, federal government pays 76% of total cost. For every $1 Mississippi spends, federal government spends $3.17 In highest-income states such as NJ, NY, CT, and DE, federal government pays $1 for each $1 a state spends In 2006, the federal government directly paid for 57% of total Medicaid expenditures
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Medicaid Enrollees, 1980– 2005 25.3 36.3 44.5 48.4 52.4 57.3 58.6 Aged Blind/ Disabled Children Non-elderly adults 50.9 20.4 0 10 20 30 40 50 60 1980 1990 1995 2000 2001 2002 2003 2004 2005 Millions Source: Congressional Budget Office, March 2006. Medicaid Enrollment Has Almost Tripled Since 1980
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47.6% 18.7% 12.7% 16.5% 45.9% 9.6% 22.6% 26.3% Enrollees Expenditures Children Non-elderly adults Elderly 68.5% of costs Source: Congressional Budget Office, 2006. 26% of Medicaid Enrollees Generate Almost 70% of Costs
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Medicaid Spending Has Increased Sharply ($billions) Source: CMS; Catlin, 2008. $23.3 $37.5 $64.9 $120.1 $205.2 $320.2 1980 1985 1990 1995 2000 2006 Average annual increase of 10.5% between 1990 & 2006
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Source: OMB. Social Security 21% Defense Discretionary 19% Defense Non- Discretionary 18% Medicare 14% SCHIP 7% Other 12% Interest 9% 21% of Federal Budget Was Allocated to Health Care Programs in Fiscal 2007 100% = $2.77 trillion
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State and Local Government General Spending, 2004 Source: Statistical Abstract of the U.S., 2007 and 2008. State/Local Governments Spend Almost 50% as Much on Medicaid as on Kindergarten-12 th Grade Education 100% = $1.9 billion health (11.9%) Kindergarten – 12 th Grade Education (23.8%) Higher education (9.1%) Other (35.5%) Utilities (8.2%) Fire/police (5.2%) Roads (6.2%)
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How Are State and Local Governments Likely to Respond To… Federal mandates regarding Medicaid: must cover various groups, and the required groups increase over time must provide a comprehensive set of services cannot use cost sharing aggressively (e.g., co-payments) to control moral hazard and spending Rapidly rising medical costs, especially among elderly and disabled Pressure by citizens to keep taxes low and simultaneously improve K-12th grade education system
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Medicaid Provider Payments States may pay health care providers (e.g., MDs, hospitals) directly, or States may contract with managed care organizations (e.g., Medicaid HMOs) Within federally imposed limits, each State has
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This note was uploaded on 09/12/2008 for the course PAM 4350 taught by Professor Nicholson during the Spring '08 term at Cornell.

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Physicians_1 - Medicaid and Physicians I PAM 435 March 4,...

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