Last week, Ohio Governor John Kasich announced his proposal to balance Ohio’s budget (the Blue Book). Because the Ohio budget is in large part reserved for Medicaid, health care changes play a significant role in the new budget plan.
The slides below are from a presentation summarizing Kasich’s budget plan. The plan is merely an outline; it is important to note that budget legislation has not even been proposed. It is anticipated that a budget bill will be proposed in late March. In addition, the Ohio General Assembly must pass a new state budget by June 30, so time is of the essence for any lobbying efforts to support or change these ideas.
Some thoughts on the proposed budget:
- According to the Governor’s Office of Health Transformation, payments for physician and clinical services in Ohio is .3% less than the U.S. average. Executive budget features such as accountable health homes and emphasis on health and wellness may be of interest to physicians.
- According to the Governor’s Office of Health Transformation, Ohio’s Medicaid per capita spending for hospitals is twelve percent (12%) greater than the U.S. average and in SFY 2010, twenty-eight percent (28%) of total Ohio Medicaid expenditures went to hospitals. The Executive budget proposes to continue the hospital franchise fee to draw down federal matching funds but does not redistribute all of the money solely to hospitals. Further, policy changes will subject hospitals to reimbursement cuts through “Modernization of Hospital Payments” noted in the slides.
- According to the Governor’s Office of Health Transformation, individuals covered by both Medicare and Medicaid consume forty-six percent (46%) of Medicaid long-term care spending and sixteen percent (16%) of behavioral health services spending.
- According to the Governor’s Office of Health Transformation, Ohio’s Medicaid per capita spending for nursing home care is fifty-two percent (52%) greater than the U.S. average with only five (5) states spending more per capita. Seventeen percent (17%) of Ohio’s Medicaid expenditures in SFY 2010 went to nursing facilities.
- According to the Governor’s Office of Health Transformation, Ohio’s per capita spending for home health care is 8.3% less than the U.S. average and comprised fourteen percent (14%) of Ohio’s Medicaid expenditures in SFY 2010.
- The Executive budget would engage Miami University’s Scripps Gerontology Center to complete an evaluation of the cost effectiveness of the PACE program, which serves approximately 750 people. Further, Ohio will pursue an initiative to share savings with Medicare for dual eligibles. No further enrollment will occur until complete.
- The Executive budget will place greater responsibility on managed care plans to administer quality improvement programs. For example, it proposes to create a pay-for-performance program, continues to require accountability for preventive services (e.g., well-child visits and prenatal care), and establishes a withhold of one (1) percent of the capitation payment for plans to earn back as an incentive payment tied to performance. The Executive budget proposal assumes that expansion of managed care to include children with disabilities (a transition component of establishing pediatric accountable care organizations) will allow health plans to spread their administrative expenses across more lives.