Decline In Medicaid Spending: Another Nice Side Effect From Part D?

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  • 11/28/2006
USA Today reported yesterday that Medicaid spending as a whole actually declined for the first time since 1965. I have not looked at the data yet and plan to but at first glance it would seem to me that increased utilization of medications -- particularly among the dually eligible population and those in nursing homes -- might be saving money in the more labor intensive parts of the health care system.

ere's a link to the article.

The article notes: "The changes include shifting the elderly from nursing homes to less-costly home health care, cracking down on fraud, refining the management of high-cost patients (such as those with AIDS or hemophilia) and cutting some payments to hospitals and doctors. " Unstated is the fact that such changes rely upon increased drug utilization via disease management programs. At the same time, the question has to be raised as to whether states are simply cutting costs by simply denying care in isolated instances. But then again, the Part D experience has moved control of the drug benefit into the hands of consumers and advocates, albeit with some initial bumps and disruptions which CMS and a motivated crew of stakeholders has promised to rectify this enrollment period. All the more reason to shift resources from providers to consumers...

If so, and I promise to follow up on this premise, it is yet another reason why restricting seniors choice of drugs to fill the dough nut hole for rich seniors makes no sense at all. And why the Part D experiment should be expanded to include Medicaid as a common sense coalition of Ds and Rs are proposing in Congress. The link to this article can be found here.


Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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