The impact of Medicaid adoption of the Medicare fee schedule

In this article, the authors simulate the effects on Federal and State Medicaid expenditures of increasing Medicaid fees to Medicare fee schedule (MFS) levels. Strict adoption of the MFS by the States would increase total Medicaid spending by approximately 4 percent, $2.5 to $2.9 billion. Because Medicaid fees vary across States, so does the impact of adopting the MFS. Medicaid spending would increase significantly in some wealthy States with large Medicaid populations and in a few small, relatively poor States. Some States currently pay more than the MFS for obstetrical services. If these fees continued at higher levels for obstetrical care, total Medicaid spending would increase by $3.5 to $4.0 billion.     

Outcomes of California's Medicaid cost-containment policies, 1981-84

In 1982, California enacted a package of tough Medicaid cost-containment measures. This article examines its effects on program expenditures through 1984 by enrollment group and service category. Total expenditures fell by 19 percent (or $656.5 million) after inflation. Expenditures per enrollee declined for almost every group, with enrollees on cash assistance taking the greatest reductions. Ambulatory, physician, and pharmacy spending declined the most followed by long-term and hospital care. The effects of these policies are of particular importance in the early 1990s as States face even greater fiscal challenges and seek lessons from past attempts at controlling program costs.     

Excluded from universal coverage: ESRD patients not covered by Medicare

Medicaid is believed to serve as the major insurer for end stage renal disease (ESRD) patients who are ineligible for Medicare coverage. Demographics, receipt of dialysis services, and costs of Medicaid-only populations were compared with Medicare ESRD populations in California, Georgia, and Michigan. Notable differences in patient demographics, dialysis practice patterns, and inpatient health resource utilization between the Medicaid and Medicare ESRD populations were observed. Medicaid expenditures for Medicare-ineligible ESRD patients were considerable: in 1991, California spent $46.4 million for 1,239 ESRD patients; Georgia and Michigan each spent nearly $5 million for approximately 140 ESRD patients.     

The impact of public-sector expenditures for contraceptive services in California

A methodology previously used to calculate the number of unintended pregnancies averted nationally through publicly funded contraceptive services has been adapted for a state-level analysis in California. An estimated 136,800 unintended pregnancies--which would result in approximately 36,000 births, 85,100 abortions and 15,700 miscarriages--are averted each year because publicly funded contraceptive care is available from clinics and private physicians in California. Federal and state expenditures of $46 million for contraceptive services in California in FY 1989 resulted in an estimated savings of $232-$509 million in public costs for abortions, for prenatal and maternity care and for medical care, welfare and supplementary nutritional programs during the first two years after a birth. These savings represent an average of $7.70 saved for each dollar spent to provide contraceptive services. This savings/cost ratio is 75 percent higher than that previously estimated for the United States as a whole.     

Public funding of contraceptive, sterilization and abortion services, fiscal year 1990.

In FY 1990, the federal and state governments spent $504 million to provide contraceptive services and supplies, according to results of a survey of state health, social services and Medicaid agencies conducted by The Alan Guttmacher Institute. Medicaid accounted for 38 percent of all public funds spent on contraceptive services, Title X provided 22 percent, and two federal block-grant programs--Social Services and Maternal and Child Health--together were responsible for 12 percent of public expenditures. State governments accounted for the remaining 28 percent of public funding. Although public expenditures for contraceptive services have risen by $154 million over the past decade, when inflation is taken into account, expenditures have actually fallen by one-third. Since 1980, the proportion of public contraceptive expenditures contributed by Title X has been cut virtually in half, while the proportion contributed by state governments has nearly doubled. When inflation is taken into account, Title X expenditures for contraceptive services have fallen by almost two-thirds since 1980. The federal and state governments together spent $95 million to subsidize sterilization services in 1990, and $65 million to provide abortion services. The federal government was the major source of funding for sterilization services but provided less than one percent of the cost of abortion services. Because of changes over time in survey methodology and the difficulties some states had in separating out expenditures by type of care, these data are approximations.     

Medicaid expenditures for maternity and newborn care in America

An Alan Guttmacher Institute (AGI) survey of the Medicaid programs in each state and the District of Columbia found that some 542,000 low-income women have a Medicaid-subsidized delivery each year--about 15 percent of all women who give birth. The proportion ranges from three percent in Alaska to 25 percent in Michigan. The federal and state governments spend almost $1.2 billion annually for maternity care (including prenatal, postpartum and newborn care); the average expenditure per patient is $2,200. Tennessee reports the highest expenditure per patient ($3,500) and Louisiana the lowest ($1,300). Only the highest payments under Medicaid are close to charges for maternity care in the open market, a fact that results in a significant disincentive for physicians and hospitals to accept Medicaid patients. The $1.2 billion spent for Medicaid-subsidized maternity care compares with an estimated $11.5 billion spent for such care nationwide. Thus, Medicaid pays for about 10 percent of the nation's maternity care bill, although Medicaid subsidizes deliveries for 15 percent of all women who give birth. The figures for maternity care do not include Medicaid expenditures for neonatal intensive care, which, for the 17 states reporting data, average about $11,800 per infant. Although only about six percent of all newborns whose deliveries are subsidized by Medicaid require neonatal intensive care, such care is so expensive that it adds about 30 percent to all Medicaid expenditures for maternity care. Increased Medicaid payments for maternity care, including prenatal care, could have a positive impact on health outcomes for low-income mothers and their babies, and could reduce the necessity for massive and expensive medical treatment for newborns.     

The relationship of post-acute home care use to Medicaid utilization and expenditures

RESEARCH OBJECTIVES: To describe the use of post-acute home care (PAHC) and total Medicaid expenditures among hospitalized nonelderly adult Medicaid eligibles and to test whether health services utilization rates or total Medicaid expenditures were lower among Medicaid eligibles who used PAHC compared to those who did not. STUDY POPULATION: 5,299 Medicaid patients aged 18-64 discharged in 1992-1996 from 29 hospitals in the Cleveland Health Quality Choice (CHQC) project. DATA SOURCES: Linked Ohio Medicaid claims and CHQC medical record abstract data. DATA EXTRACTION: One stay per patient was randomly selected. DESIGN: Observational study. To control for treatment selection bias, we developed a model predicting the probability (propensity) a patient would be referred to PAHC, as a proxy for the patient's need for PAHC. We matched 430 patients who used Medicaid-covered PAHC ("USE") to patients who did not ("NO USE") by their propensity scores. Study outcomes were inpatient re-admission rates and days of stay (DOS), nursing home admission rates and DOS, and mean total Medicaid expenditures 90 and 180 days after discharge. PRINCIPAL FINDINGS: Of 3,788 medical patients, 12.1 percent were referred to PAHC; 64 percent of those referred used PAHC. Of 1,511 surgical patients, 10.9 percent were referred; 99 percent of those referred used PAHC. In 430 pairs of patients matched by propensity score, mean total Medicaid expenditures within 90 days after discharge were $7,649 in the USE group and $5,761 in the NO USE group. Total Medicaid expenditures were significantly higher in the USE group compared to the NO USE group for medical patients after 180 days (p < .05) and surgical patients after 90 and 180 days (p < .001). There were no significant differences for any other outcome. Sensitivity analysis indicates the results may be influenced by unmeasured variables, most likely functional status and/or care-giver support. CONCLUSIONS: Thirty-six percent of the medical patients referred to PAHC did not receive Medicaid-covered services. This suggests potential underuse among medical patients. The high post-discharge expenditures suggest opportunities for reducing costs through coordinating utilization or diverting it to lower-cost settings. Controlling for patients' need for services, PAHC utilization was not associated with lower utilization rates or lower total Medicaid expenditures. Medicaid programs are advised to proceed cautiously before expanding PAHC utilization and to monitor its use carefully. Further study, incorporating non-economic outcomes and additional factors influencing PAHC use, is warranted.     

Hospital utilization and expenditures for Medicaid enrollees by major diagnosis group.

The distribution of Medicaid hospital discharges and expenditures by major diagnosis group for Medicaid enrollees in California, Michigan, and New York during 1982 are examined in this article. Although hospital expenditures represent a major component of Medicaid expenditures, the extent of variation in Medicaid inpatient utilization and expenditures across diagnoses and between States has not been previously studied. In this article, Medicaid inpatient hospital utilization and expenditure data by major diagnosis group from the Health Care Financing Administration's Tape-to-Tape data base are examined to determine whether significant interstate differences exist.     

End of life Medicare and Medicaid expenditures for dually eligible beneficiaries

In 1995, combined Medicare and Medicaid spending in the last year of life for dually eligible beneficiaries was more than $40,000 per beneficiary. Medicaid's share, primarily for long-term care (LTC), constituted about 40 percent of the total. Beneficiaries under age 65, Black persons, and individuals who died in a hospital had higher than average expenditures. The vast majority (86 percent) received some form of supportive services (nursing home, home care, hospice services). It is critical that policy deliberations consider both acute and LTC use concurrently because of their extensive use by dually eligible beneficiaries, as well as the interaction of the two funding sources (Medicare and Medicaid) that cover them.     

State Medicaid programs offering personal care services

Two Medicaid programs offer personal care services: (1) the Title XIX Personal Care Services (PCS) optional State plan benefit; and (2) the 1915(c) home and community-based services (HCBS) waivers. By 1998-1999, 26 States offered the PCS optional State plan benefit; 45 offered personal care services via a waiver(s). Nationwide, the former program was larger. The latter was the more popular administrative mechanism, possibly because it more reliably controls growth. States vary dramatically in terms of Medicaid personal care. Medicaid personal care participants per 1,000 State population ranged from 7.33 to 0.04. Per capita expenditures ranged from $91.21 to $0.02.     

National health expenditures, 1991

Spending for health care rose to $751.8 billion in 1991, an increase of 11.4 percent from the 1990 level. National health expenditures as a share of gross domestic product increased to 13.2 percent, up from 12.2 percent in 1990. The health care sector exhibited strong growth, despite slow growth in the overall economy. This combination resulted in the largest increase in the share of the Nation's output consumed by health care in the past three decades. In this article, the authors present estimates of health spending in the United States for 1991. The authors also examine reasons for the unusually large growth in Medicaid expenditures and highlight recent trends in the hospital sector.     

Children Who Are Medically Fragile in North Carolina: Using Medicaid Data to Estimate Prevalence and Medical Care Costs in 2004

Objectives: The purpose of this paper is to demonstrate a method of using medical insurance paid claims and enrollment data to estimate the prevalence of selected health conditions in a population and to profile associated medical care costs. The examples presented here use North Carolina Medicaid data to produce estimates for children ages 0–19 who are medically fragile. These children with serious health conditions are a small subset of all children with special health care needs. Methods: The children who are medically fragile were identified through selected procedure and durable medical equipment codes. We profiled the expenditures for all medical services provided to these children during 2004. Results: 1,914 children ages 0–19 enrolled in Medicaid were identified as medically fragile (0.22 percent). The amount paid by Medicaid for these children during 2004 for all medical services was $133.8 million, or $69,906 per child. By comparison, the average expenditure by Medicaid during 2004 for a randomly selected group of children receiving well-child care visits was $3,181 per child. The $133.8 million of Medicaid expenditures for the children who are medically fragile represents 6.8 percent of the nearly $2 billion spent by Medicaid in 2004 for all medical services for all children ages 0–19. Conclusions: This study presents a standard methodology to identify children with specific health conditions and describe their medical care costs. Our example uses Medicaid claims and enrollment data to measure prevalence and costs among children who are medically fragile. This approach could be replicated for other health care payer data bases and also in other geographic areas.     

Public funding of contraceptive, sterilization and abortion services, 1982

The federal government and the states spent $328 million to support the provision of contraceptive services in fiscal 1982, 13 percent less than they had spent the previous year. Federal funds for family planning services came from Title X of the Public Health Service Act, Title XIX of the Social Security Act (Medicaid), and the Maternal and Child Health (MCH) and Social Services block grants, which are administered by the states. Title X continued to provide the largest, although a diminishing, share of public funds for contraceptive services--36 percent of all such funds in 1982. (In 1980, Title X had accounted for 44 percent of public funding.) Medicaid expenditures for family planning totaled $94 million; $17 million was spent under the MCH block grant, and $46 million under the Social Services block grant. State governments contributed an additional $53 million, about the same figure reported for the previous year, indicating that the states did not use their own funds to soften the impact of cuts in federal expenditures for contraceptive services in 1982. The federal government and the states spent an estimated $55 million, almost all of it through Medicaid, to provide sterilization services for poor women. The states spent $67 million and the federal government spent $1 million to provide abortions for 210,000 indigent women. These figures come from the 11th annual survey of state health and welfare agencies and state Medicaid programs by The Alan Guttmacher Institute (AGI). The AGI conducted this survey in January 1983 to determine the levels and sources of public funding for contraceptive, sterilization and abortion services in each state during FY 1982.     

Estimates of the direct and indirect costs of acquired immunodeficiency syndrome in the United States, 1985, 1986, and 1991

This study presents three estimates--ranging from low to high--of the direct and indirect costs of the AIDS epidemic in the United States in 1985, 1986, and 1991, based on prevalence estimates provided by the Centers for Disease Control (CDC). According to what the authors consider their best estimates, personal medical care costs of AIDS in current dollars will rise from $630 million in 1985 to $1.1 billion in 1986 to $8.5 billion in 1991. Nonpersonal costs (for research, screening, education, and general support services) are estimated to rise from $319 million in 1985 to $542 million in 1986 to $2.3 billion in 1991. Indirect costs attributable to loss of productivity resulting from morbidity and premature mortality are estimated to rise from $3.9 billion in 1985 to $7.0 billion in 1986 to $55.6 billion in 1991. While estimated personal medical care costs of AIDS represent only 0.2 percent in 1985 and 0.3 percent in 1986 of estimated total personal health care expenditures for the U.S. population, they represent 1.4 percent of estimated personal health care expenditures in 1991. Similarly, while estimated indirect costs of AIDS represent 1.2 percent in 1985 and 2.1 percent in 1986 of the estimated indirect costs of all illness, they are estimated to rise to almost 12 percent in 1991. Estimates of personal medical care costs were based on data from various sources around the United States concerning average number of hospitalizations per year, average length of hospital stay, average charge per hospital day, and average outpatient charges of persons with AIDS. For estimating the indirect costs the human capital method was used, and it was assumed that average wages and labor force participation rates of persons with AIDS were the same as those for the general population by age and sex.     

Public funding of contraceptive, sterilization and abortion services, 1985

In FY 1985, the federal and state governments spent $398 million to provide contraceptive services and supplies. The two leading sources of funding were the Medicaid program and Title X of the Public Health Service Act. The former accounted for $137 million, or 34 percent of all public expenditures; and the latter program accounted for $133 million, also 34 percent. Two blockgrant programs--Social Services and Maternal and child Health--provided $40 million and $23 million, respectively; together, they were responsible for 16 percent of public support for contraceptive services. State governments, which spent $64 million of their own revenues, accounted for another 16 percent of funding. The federal and state governments together spent $64 million to subsidize sterilizations in FY 1985. The federal government provided 94 percent of the funding--84 percent through the Medicaid program. In addition, the states and the federal government spent $66 million to subsidize 188,000 abortions; in this case, however, the federal government contributed less than one percent of the funds used. These data come from a survey of state agencies, and should be viewed as approximations rather than as precise figures.     

Comparing state-only expenditures for AIDS.

The State AIDS Policy Center at the Inter-governmental Health Policy Project (IHPP) at George Washington University surveyed all 50 states to determine state AIDS (acquired immunodeficiency syndrome) expenditures, without Medicaid or federal funds, for fiscal 1984-88. During this period, state-only expenditures increased 15-fold, to $156.3 million. Between fiscal 1986-1988, the distribution of state funding for AIDS patient care and support services doubled from 16 to 35 per cent and the number of states supplementing federal funds for testing and counseling increased from eight to 20. Five states continue to account for the largest AIDS appropriations. Of these, California leads in funding research; New York, Florida, and New Jersey have directed funds to provide care and services to IV (intravenous) drug users, prisoners, and children. The average state expenditure per diagnosed AIDS case is $3,323 and an increasing number of states with relatively low case loads are appropriating funds beyond this level. Across states, AIDS expenditures per person average $.65 and $.21 for education, testing and counseling--below the level recommended by the Institute of Medicine for AIDS prevention activities. Some jurisdictions support AIDS activities indirectly by shifting resources, often from their STD (sexually transmitted disease) programs--this trend deserves continuing review given the rise in STD cases and their relationship to diagnosed AIDS.     

Public funding of contraceptive, sterilization and abortion services, 1983

In 1983, the federal and state governments spent +340 million to provide contraceptive services--four percent more than they spent during the previous year. Title X of the Public Health Service Act, still the leading source of funding, accounted for +117 million, or 34 percent of all public expenditures. Almost as important was the +108 million (32 percent of total expenditures) provided through Title XIX of the Social Security Act (Medicaid). Two block-grant programs--Social Services and Maternal and Child Health--provided +38 million and +19 million, respectively; together, the two were responsible for 17 percent of public support for contraceptive services. State governments, which spent +58 million of their own revenues, provided an additional 17 percent of funding. Some public expenditures for contraceptive services were made in all the states. Nearly all of the four percent increase in total public funds between 1982 and 1983 was due to a 15 percent rise in Medicaid reimbursements. The federal and state governments together spent +69 million to provide about 73,000 sterilizations in 1983. Ninety percent of sterilization expenditures were made by the federal government--86 percent through the Medicaid program. In addition, the states and the federal government spent +71 million to provide 216,000 abortions in 1983. Unlike public funding for either contraceptive services or sterilization, almost all of the funding for abortion came from the states rather than from the federal government.     

End-of-life expenditures by Ohio Medicaid beneficiaries dying of cancer

We evaluate the extent to which the Ohio Medicaid Program serves as a safety net to terminally ill cancer patients, and the costs associated with providing care to this patient population. Over a 10-year period, Ohio Medicaid served nearly 45,000 beneficiaries dying of cancer, and spent more than $1 billion in medical care expenditures in their last year of life. Eighty percent of the expenditures were incurred by 67 percent of the decedents who had been enrolled in Medicaid for at least 1 year before death, implying an opportunity for the Medicaid Program to ensure timely transition to palliative care and hospice.     

Do public health activities pay for themselves? The effect of county‐level public health expenditures on county‐level public assistance medical care benefits in California

This study estimates the effect of county‐level public health expenditures in reducing county‐level public assistance medical care benefits (public assistance medical care benefits is a measure compiled by the US Bureau of Economic Analysis and includes Medicaid and other medical vendor payments). The effect is modeled using a static panel model and estimated using two‐stage limited information maximum likelihood and a valid instrumental variable. For every $1 invested in county‐level public health expenditures, public assistance medical care benefits are reduced by an average of $3.12 (95% confidence interval: ?$5.62, ?$0.94). Because Medicaid in California is financed via an approximate 50% match of federal dollars with state dollars, savings to the state are approximately one‐half of this, or $1.56 for every $1 invested in county‐level public health expenditures.