The Move Is On to Cut Health System Costs

In a move that affects the bottom line of hospitals and pharmacies, Washington cuts more money from their Medicaid program.

This particular innovation may have more applications right across America if the whole picture affecting the health system is taken into account. It’s not a national secret that the health system isn’t “healthy” and that it needs some serious revamping to make it over into something that provides access to medical services for everyone. But, that’s another story.

This story deals with the operating budgets of hospitals and pharmacies by directly affecting what they generate in revenues. The State of Washington has done some budget slicing to their Medicaid program that shaves hospital revenues by close to 4% and pharmacies will be hit with a 2% budget cut. In other words, when a druggist dispenses prescription drugs to Medicaid patients, they will be getting, from now on, 2% less for those drugs.

This is billed as not only a cost saving measure to buck up the system and make it more cost effective, but as an efficiency move with an eye to cutting down on excesses in the health care structure. While this move may sound a lot like the campaign promises of the current president, there is still a long road to travel to make changes that will boot the bloat from the system.

Washington has broader plans for cuts and trims that involve, among other things, refusing to pay for as many C-sections and will insist that more prescriptions be filled using generic drugs. While this may ultimately spell economic disaster for Big Pharma, it is definitely a step in the right direction to address out of control health care costs.

In another move that raised a few eyebrows, Washington also informed Medicaid recipients they would also be paying more out-of-pocket expenses for things like nutrition supplements and home-health devices.

The next question is how this approach would fly in other states. This is a tough question to address, as each state has a different approach to how the administer their Medicare and Medicaid programs. Ultimately this will have to be a decision that each state takes based on the merits of their existing administration, and political will.

Even though the health care system needs to be retooled in the worst way, sadly, there are proponents who would rather avoid the major issue of accessible health care for all because it would offend the big private insurance lobby. Realistically speaking, unless the big insurance monopoly is tackled, the cost of health insurance is going to continue to rise, thus shutting out low income Americans.

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