Reforming Ohio Medicaid: "Open the Markets and Level the Playing Field"
Ohio's new plan for Medicaid, laid out in the 2006-2007 biennial budget, has important implications for reforming the state's biggest long term problem. While it is an improvement over the existing system, the plan falls short of fully employing the market-based reforms needed both to control Medicaid's costs and to improve its quality.
With virtually nonexistent productivity growth, and Medicaid spending projected to rise 40 percent in nominal terms between 2006 and 2010, market reforms become imperative. These reforms involve the creation of a real marketplace where subsidized buyers and providers act in their own interests.
Florida and South Carolina are moving rapidly in this direction. It is useful to contrast Ohio's plan with what these two states are doing. If Ohio follows their example of empowering consumers and promoting competition, benefits will accrue to taxpayers, beneficiaries, and providers alike.
Michael T. Bond, Ph.D., is Director of the Center for Health Care Policy at The Buckeye Institute and a professor in the Department of Finance at Cleveland State University.
