States Restructure Health Care Delivery

By Johnson, Tom | Risk Management, March 1991 | Go to article overview
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States Restructure Health Care Delivery


Johnson, Tom, Risk Management


Although much public debate on U.S. health care policy focuses on reform at the national level, many states are making important changes in the delivery and financing of health care services that affect access, quality and costs, according a recent report by the Employee Benefit Research Institute. Approaches to health care vary widely among states, reflecting different demographic, political and economic forces. Although most states' Medicaid programs have adopted a prospective payment system, which determines the amount that hospitals reimburse Medicare providers in advance of the services' being provided, they determine the payment in different ways.

Medi-Cal, California's Medicaid program, allows hospital prices to be set through a market mechanism. New Jersey uses an all-payer system that reimburses on a per admission basis, adjusted for the patient's diagnosis-related group. Arizona uses a combined managed care and competitive bidding approach in which providers are paid a predetermined amount. States have also adopted different approaches to the expansion of Medicaid benefits and eligibility. Connecticut's Medicaid program was expanded last year to cover 61,400 of the state's 272,000 uninsured residents, while in 1988 Indiana extended coverage to pregnant women and children up to age 1 with family incomes less than 50 percent of the federal poverty level.

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