In the U.S., healthcare expenditures have increased over the past decades from $256 billion in1980 to $2.6 trillion in 2010.
Chronic diseases, which often result in illness, hospitalization andlong-term disability of people diagnosed, are a primary contributor to the rise in healthcarecosts nationally. Treating people with chronic disease consumes about 83 percent of Medicaidresources and causes seven out of every 10 deaths in America each year.
Despite these grimstatistics, a significant portion of these treatment costs and a number of deaths are avoidablewith greater investment in successful chronic disease management and prevention programs.Unless and until states change the way healthcare services are delivered to people with chronicdisease and adopt new methods of payment for providers, healthcare costs will likely continueto increase even as reforms are made to other areas of the healthcare system.
This year is the make-or-break year for Affordable Care Act implementation at the state level.Much of the preparation for both the healthcare exchanges and Medicaid expansion dependsupon state action this year. Early indications are that states will have a great deal of flexibility intailoring efforts to meet state needs, but with that flexibility comes many questions left forgovernors and policymakers to answer. Among them will be whether to accept a new Medicaidform of payment to establish “medical homes” and “accountable care organizations,” both of which are designed to expand access, improve the coordination of care among doctors andmedical systems, and make healthcare providers responsible for managing the overall costs of care they deliver.Along with these policy challenges, many states face significant budget shortfalls, putting evengreater pressure on the need to find workable solutions for the efficient use of public funds.For Medicaid alone, states are projected to face a combined deficit of $125 billion in FY2012and are expected to spend $195 billion on Medicaid – a staggering 48 percent increase over2010 budgets.
Medicaid spending growth is projected to average 7.9 percent for each year of the 10-year period that started in 2009 and ends 2019 unless reforms can be made to containrising costs.
With healthcare issues at the top of policy agendas, governors can meet the
Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group,
National Health Care Expenditures Data
, January 2012.
Partnership for Solutions, Chronic Conditions: Making the Case for Ongoing Care. September 2004 Update.http://www.partnershipforsolutions.org/DMS/files/chronicbook2004.pdf andChronic Diseases and Health
L Winerman and V Dennis, “Exclusive: States Facing Massive Medicaid Budget Crunch,” PBS Newshour, Feb. 17,2011. Available online at:http://www.pbs.org/newshour/rundown/2011/02/by-the-numbers-states-face-massive-medicaid-budget-crunch.html
Centers for Medicare & Medicaid Services, National Health Expenditure Projections 2009-2019,https://www.cms.gov/NationalHealthExpendData/25_NHE_Fact_Sheet.asp