MEDICAID Panel: Ohio could have saved $1.3B this year

Some drug savings would come from consolidating all state drug purchases.
COLUMBUS (AP) -- Ohio could have saved at least 13 percent on Medicaid this year if all recommendations from a state panel studying the system already were in place, the group said Friday.
The Ohio Commission to Reform Medicaid said savings could have exceeded $1.3 billion, because that figure leaves out some recommendations that overlap with others. The state is spending $10 billion on the joint state-federal insurance program for the poor and disabled, and analysts say it could account for half of all state spending in 2010 if costs aren't restrained.
Many of the recommendations require federal approval or changes to state law, but state agencies can start making some changes now, such as using large contracts to obtain volume discounts on medicines and supplies, said the report, which expanded on recommendations the commission made late last year by providing budget estimates.
Gov. Bob Taft's budget proposal, currently being debated by lawmakers, incorporates some of the recommendations.
Most of the savings would come through plans to control prescription drug costs and move all Medicaid clients to managed care -- two aspects that are closely related, commission spokeswoman Jennifer Carlson said.
For example, studies indicate that many Ohioans with mental illness are being prescribed too many drugs or the wrong drugs because they see multiple doctors and don't have a coordinated medical plan like the one that would come with managed care, she said. Other drug savings would come from consolidating all state drug purchases and using more generics.
Unpopular suggestions
The least popular recommendations call for freezing hospital payments and cutting payments to nursing homes and institutions for the developmentally disabled. Lawmakers have resisted such changes in the past, but this year legislative leaders have said they're more willing to look for savings in those institutions.
However, the Ohio Health Care Association, a trade group that represents owners of nursing homes and assisted living centers, has said it's shortsighted to cut aid to nursing homes. Increased home care and other changes to Medicaid mean that the people coming to the homes are in more fragile health than ever before.
Freezing payments while expenses are rising could lead to more hospital closures, the Ohio Hospital Association has said.