Baton Rouge—A report issued today by the Louisiana Department of Health shows a eight-year trend of Medicaid spending at or below the U.S. growth rate. Cost controls in the program have saved Louisiana taxpayers more than $6 billion since 1996, while Medicaid has nearly doubled the number of children covered and improved both access to health care and quality of services.
“We have shown it doesn’t take vast amounts of added funds to improve health care,” LDH Secretary David Hood said. “It’s about setting priorities and redirecting funds into services that keep people healthy.”
The report highlights changes in the program’s administration to make access easier and more efficient for Medicaid patients. The report also notes the increase of more than 300,000 children receiving services through the Louisiana Children’s Health Insurance Program, which began in 1998.
Hood said while Medicaid spending was brought under control, many key improvements were implemented. In addition to LaCHIP, about 700,000 Medicaid recipients were enrolled into CommunityCARE, guaranteeing them access to a primary care physician. Reimbursement rates to physicians, dentists, nursing homes, rural hospitals and clinics, outpatient hospital services and many other medical providers were also significantly increased.
“It’s about keeping people healthy,” Hood said, noting the shift from emergency care to preventive care saves the Medicaid system money by diagnosing and treating problems early to avoid or help control chronic illnesses.
According to the report, changes in program management are a stark contrast to the late 1980s and early 1990s, when the state became dependent on federal disproportionate share funds known as “dispro.” A 1995 Washington Post article included in the report illustrates the dire financial situation the Medicaid program faced in 1995 when members of Congress and the U.S. Health and Human Services Secretary were asked to help repair Louisiana’s broken system.
“In the early 1990s, the state became dependent on federal funds that fueled spectacular growth rates and out-of-control spending while health care outcomes remained minimal,” Hood said. “We have succeeded in doing what we should have been doing in the early 1990s, and we have done it with significantly less money. We must now focus on maintaining an affordable health care budget that produces better results.”
Hood said news articles from the mid-1990s should serve as reminders about the consequences of unfettered growth and over-reliance on federal funds.
“For the current fiscal year, the Legislature has appropriated more than $300 million in non-reoccurring federal funds, mainly to avoid massive budget cuts to health care,” he explained. “Finding the state dollars to replace those funds will be a challenge. We need a long-range plan to free us from unreliable funding sources. Thankfully, the department has controlled growth to perhaps the lowest rate in the nation, which greatly helps to mitigate future funding problems.”
He said the challenges ahead include expanding access to affordable health care for the uninsured, providing more choices in long-term care for the elderly and people with disabilities, and stabilizing financing for the Medicaid program.
The complete report is available online at www.dhh.state.la.us.