States Face Growing Health Costs, Dwindling Budgets

As states wrestle with shortfalls in health care funding, many are hoping to brace with budget cuts, while others focus on changes that keep costs down over the long term.

The Times-Picayune/Associated Press: "While politicians argue about the nation's long-term health care problems, Louisiana faces a health care tsunami within a year." A looming $700 million cut in the state's yearly Medicaid payment from Washington could cripple the program if Gov. Bobby Jindal doesn't secure a bailout from Congress. The governor and his staff are attempting to prepare residents for major cuts if the bailout doesn't come through (Deslatte, 9/14).

American Medical News: "Several states have marked Medicaid physician pay for reductions to help cover billions in budget deficits." Among those cutting payments by 3 to 5 percent are Ohio, Arizona and Michigan. Federal stimulus funding increased Medicaid payments to states, possibly warding off even deeper cuts (Trapp, 9/14).

The Wall Street Journal: "In the fight over a health-care overhaul, Maryland's experience with setting hospital rates suggests the federal government could realize savings on health spending, but at a price of more regulation for health providers." The state sets prices for hospitals for all payers, including private insurers and Medicare. Hospitals say the prices allow them to weather recessions better than their counterparts elsewhere, and help cover the cost of the uninsured more reliably. Medicaid and Medicare both pay higher rates, while private insurers pay lower ones. Hospital costs have grown far more slowly than in other states (Zhang, 9/14).

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