Op-ed: Medicaid Reform is What the Doctor Ordered


Healthcare continues to be a subject of intense public debate, and rightfully so. Escalating costs are placing an enormous strain on family spending plans as well as state and federal budgets, even as healthcare outcomes consistently fail to meet expectations. Although many of the problems pertaining to health care must be addressed at the federal level, it is far past time for Pennsylvania lawmakers to explore cost-conscious reforms at the state level that actually improve patient care.

Medicaid spending remains one of the biggest cost drivers in the state budget. Consider these troubling facts:

  • According to studies, more than 50% of healthcare decisions related to services and procedures are made in error and are inappropriate, unnecessary and wasteful. (2004 Rand, 2008 & 2009 PricewaterhouseCoopers)
  • Roughly one out of every four dollars in the commonwealth’s budget is spent on Medicaid.
  • Total Medicaid spending amounts to over $28 billion annually.
  • The Department of Health and Human Services budget increases by approximately $500 million each year.
  • Pennsylvania is one of the highest spenders per Medicaid enrollee in the country.
  • Medicaid enrollment in Pennsylvania has increased by 20 percent since January 2015, adding approximately 700,000 people to the system.
  • The influx of new patients translates into an additional cost of $4.6 billion to taxpayers, and that burden is slowly but surely being shifted away from the federal government and onto the backs of state taxpayers.

These statistics beg the question — how do we intend to pay for all of these escalating costs? Innovative solutions are absolutely necessary to prevent the need for massive tax increases that Pennsylvania families simply cannot afford to pay.

In the near future, I plan to introduce legislation that would help defray the rising cost of Medicaid while improving patient care. The bill would open the door for patients and physicians to better utilize new technology to improve treatment options, prevent misdiagnoses and avoid unnecessary and costly emergency room visits and hospital admissions. This approach also holds the potential to impact the rising cost of private insurance, since doctors would no longer be stretched so thin by the low reimbursement rates that currently lead many practices to refuse Medicaid patients. The proposal could also assist communities in combating the opioid epidemic by making it harder for individuals to gain access to multiple prescriptions by increasing doctors’ ability to verify what has already been prescribed.

My bill is modeled after a successful program that was implemented in Alaska several years ago. As a result of the program, Alaskans have been able to reduce their misdiagnosis rates, improve outpatient care, cut waste, and trim Medicaid costs by over 14 percent. Experts estimate that a similar program in Pennsylvania could generate between $2 billion and $4 billion in annual savings.

It is encouraging that lawmakers on both sides of the aisle have acknowledged that we must restructure state government operations in order to save money and prevent massive tax increases. Thinking outside the box and finding creative solutions that make government more efficient and effective have been a focus throughout my career. I ran for the State Senate on a promise to continue that approach and find commonsense solutions to problems within our great commonwealth. This bill is a solid step in that direction.

Improving patient outcomes at a reduced cost is a win-win for all Pennsylvanians.  Who could be against that?

CONTACT: Terry Trego (717) 787-6535