Increasing of Medicaid Cost

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Introduction

Medicaid cost has been increasing gradually in the past four decades and projection shows that, the trend might overtake growth of the United States’ economy. Since the inception of the Medicaid program in 1965, its cost has increased from 0.4% of Gross Domestic Product (GDP) to 2.7% of GDP in 2009, which is quite alarming given that economic growth is slow and susceptible to economic crises.

Although increased Medicaid cost is attributable to expansion of eligible beneficiaries, medical care and services have increased significantly, thus causing Medicaid costs to increase faster than the growth of GDP. According to Truffer, Klemm, Wolfe, and Rennie (2010), projection shows that, annual growth rate of Medicaid cost is 8.3%, which is unusually high when compared to the annual growth rate of GDP that stands at 5.1% (35).

The federal and state governments are now grappling with the increasing Medicaid cost for it consumes a significant part of already constraint budget in the face of economic difficulties. The increasing cost of Medicaid is unsustainable and, thus threatens the livelihood of the 60 million beneficiaries who entirely rely on Medicaid to access health care and medical services.

Given that there is a high growth rate of Medicaid cost as compared to GDP growth, it is predictable that Medicaid expenditure is unsustainable; therefore, program evaluation is necessary to give appropriate recommendations that are robust in enhancing the sustainability of the Medicaid program.

Problem Statement

The increasing cost of Medicaid relative to GDP predicts that, Medicaid program is quite unsustainable if there are no effective reforms to change its legislations and policies as means of enhancing its sustainability.

The gradual increase in Medicaid cost, in the past four decades since its inception, indicates that, the cost is going to increase exponentially in future unless appropriate comprehensive reforms are in place to reverse or slow the trends.

Even though the increasing trends of Medicaid cost are attributable to expansion of eligible beneficiaries, health care and medical services are also increasingly becoming expensive, thus placing an extra burden on health care system, state, and the federal government.

Zommorrodian and Matei (2010) argue that, program evaluation is necessary as it helps many organizations to formulate and implement programs that are cost-effective and efficient in delivery of services people (979). Hence, for the state and federal government to enhance the effectiveness and efficiency of Medicaid programs, recommendations of program evaluation are central in conducting comprehensive reforms.

Therefore, this research paper seeks to conduct program evaluation with a view of increasing cost of Medicaid to enhance effectiveness, efficiency, and accountability of Medicaid programs.

Purpose of Study

The purpose of the study is to evaluate Medicaid programs to ascertain its effectiveness, efficiency, and accountability in delivery of health care and medical services to the poor people.

The study seeks to assess and evaluate roles of Medicaid in providing health care and medical services to the poor people in health care system with a view of formulating appropriate recommendations to enhance effectiveness, efficiency, and accountability of Medicaid programs.

Given that, since its inception in 1965, medical costs have been increasing gradually and are threatening to overtake the annual growth rate of GPD, the study will examine factors that contributed to the steady increase in Medicaid costs in the past four decades.

Even though increasing Medicaid cost is seemingly proportional to expansion of eligibility criteria of beneficiaries, there may be other confounding variables, which contribute to the skyrocketing cost of Medicaid. Hence, the study will assess whether current policies and legislations are functioning effectively and efficiently in a cost-effective.

Since Medicaid is a long-term program that helps the poor to afford and access health care and medical services, the study will also assess its sustainability.

Although Medicaid is currently serving over 60 million poor people, DeParle (2000) argues that, sustainability is a serious challenge because it requires a substantial deal of resources that federal and state government cannot offer in future due to increasing Medicaid cost that gives escalating pressure on economic resources (26).

Thus, the study seeks to examine whether current policies and legislations of Medicaid provide for long-term utilization of health care and medical services by the poor as a way of determining sustainability of the program.

Moreover, the study will assess if eligibility criteria of selecting beneficiaries is fair and objective to prevent unnecessary recruitment of the rich people who are able to access and afford health care and medical services. Thus, the study needs to establish if eligibility criterion is effective and efficient in selecting appropriate beneficiaries of Medicaid.

The study will also conduct a survey to examine whether Medicaid beneficiaries receive health care and medical services, which are commensurate to the state and federal funding of Medicaid. In the survey, the study will assess if health care services that beneficiaries receive are proportional to medical cost that Medicaid pay.

Assessment of health care services is critical as it depicts how Medicaid spends money and how beneficiaries receive health care services. Existence of inconsistencies will indicate that Medicaid is not using its funds effectively and efficiently in providing medical services to the poor.

Thus, the study will carry out a comparative analysis of funds and medical services that Medicaid beneficiaries receive in health care system.

Moreover, the study will evaluate the quality of medical services that Medicaid beneficiaries get from health care system relative to medical services that the rich obtain from health care system. Disparity in medical services that the poor and the rich get from the health care system will indicate the effectiveness and efficiency of Medicaid programs.

Hypotheses

The study hypothesizes that increasing cost of Medicaid is partly due to expansion of eligibility criteria, which has some deficiencies and thus requires appropriate reforms to streamline it. The inclusion of unnecessary beneficiaries into Medicaid overstretches the budge, which is already constrained by the economic meltdown.

Furthermore, the study hypothesizes that federal and state funding of is ineffective because there is differential expenditure on Medicaid across states. Truffer, Klemm, Wolfe, and Rennie (2010) argue that the federal government spends about 7% of its budget on Medicaid, while the state government spends about 21% of its budget on Medicaid (33).

Hence, government spending does not consider the disparity in the needs of poor people in various states, thus a challenge in the provision of health care services by Medicaid and health care system. The study also hypothesizes that, there is a poor provision of health care and medical services by health care system despite the fact that Medicaid spends billions of dollars yearly.

Thus, overall, the study assumes that there are inefficiencies in Medicaid programs that need evaluation and assessment to obtain recommendations, which will form the basis of comprehensive reforms essential in enhancing efficiency and effectiveness of Medicaid and delivery health care services to the beneficiaries.

Limitations of the Study

The study will have a general assessment of policies and legislation of Medicaid to establish the extent of their implementation in Medicaid program; thus, the findings will be more of generalization rather than specific.
Concerning the eligibility criteria, the study examines the eligibility of the poor and low-income earners, and this factor limits the application of the findings because it does not consider eligibility of disabled people, pregnant women, and people living with HIV.
The study also assess and evaluate Medicaid from both federal and state-level without examining specified state; thus, the findings may not reflect specified disparities that exist in various states.
Since study will collect data from one state, the findings will have limited application within the state, for they have low external validity that makes extrapolation of the findings impossible.
Ultimately, the findings have limitation because the study will only assess effectiveness and efficiency of Medicaid based on data from beneficiaries, Medicaid records, and health care system.

Delimitations

The study will not examine specified policies and legislations that different states employ when implementing Medicaid program.
Given that there are different groups of Medicaid beneficiaries, the study will not assess people living with HIV, pregnant women and people with severe disability because they do not forma significant part of beneficiaries relative to the poor people.
The study will not also evaluate effectiveness and efficiency of Medicaid in different states but rather examines one state as a model of other states.
Moreover, the study will seek to assess quality of health care services that Medicaid beneficiaries receive, but will not examine disparities that exist from one state to another.

Importance of the Study

Due to the increasing Medicaid cost, assessment and evaluation of Medicaid program, in terms of its efficiency and effectiveness, in delivery of health care services to the poor, is crucial in the formulation and implementation of policies and legislation in a cost-effective manner.

Given that increasing cost of Medicaid depicts that Medicaid program is unsustainable with its current policies and legislations, program evaluation is going to give appropriate recommendations that are essential in conducting comprehensive reforms that enhance sustainability of the program.

The formulation and implementation of comprehensive reforms are critical because, unsustainable Medicare spells doom to the over 60 million beneficiaries most of which are poor people relying on Medicaid to access and afford health care services.

Thus, it is imperative to conduct a study to assess efficiency, effectiveness and accountability of Medicaid program with a view of giving robust recommendations that will reverse or slow trends of increasing cost of Medicaid and improve the quality of health care services that the poor obtain from health care system.

Literature Review

The Congress established Medicaid in 1965 as a health program to enable the poor people access and afford quality health care services that they require. Given that significant number of the poor did not have the capacity to access and afford quality health care services, Congress established Medicaid as a social and health program that promotes health of the poor and elderly.

From 1965, Medicaid has been expanding gradually because criteria for eligibility has expanded and included distinctive groups such as people living with HIV, pregnant women and people with disabilities amongst other exceptional groups. Expansion of eligibility criteria has caused tremendous increase in the number of Medicaid beneficiaries, which consequently resulted into increasing cost of Medicaid.

Increasing cost of Medicaid is detrimental to state and federal budgets because it constitutes about 7% and 21% of their respective budgets. Egert (2003) asserts that, Medicaid cost has increased exponentially in the past five years and severely strain state budget, making every state experience fiscal crisis (4).

Thus, reforms are essential to provide means of alleviating the impact of the increasing number of Medicaid beneficiaries on state and federal budget.

Medicaid started as a health program with noble objectives of helping the poor to afford and access quality health care services, and has currently expanded and included other notable groups, which are also unprivileged in society.

Although the expansion of Medicaid has helped many people to afford and access quality health care services by creating equality in health care system, it has cost the state and federal government a fantastic deal of resources since Medicaid cost is increasing faster than the rate of economic growth of the United States.

According to Dorn (2004), conservative policymakers are against expansion of Medicaid because it will not only increase pressure on state and federal budget but also increases share of the federal government on health care system that has increased from 9% to 33 % within a period of four decades (2).

Thus, conservative policymakers want Medicaid to benefit only the poor because expansion will create many complications in terms of policy formulation and implementation as well as funding.

Moreover, after the expansion of Medicaid criteria for eligibility, it caused unprecedented increase in the number of beneficiaries and concomitantly increased the cost of Medicaid. Expansion of the eligibility criterion to include people living with HIV has helped about 44% of their population in that; about 90% of children and 55% of adults are Medicaid beneficiaries.

Therefore, it means that children form a significant part of beneficiaries who are living with HIV. Moreover, the eligibility criterion has expanded and included people with disability. Sheldon (2005) argues that, people with a disability are eligible to become Medicaid beneficiaries in spite of their levels of income because Medicaid is their primary health care insurance (5).

Thus, a significant population of people with disabilities is eligible for Medicaid. Overall, expansion of eligibility criteria has impacted negatively on efficiency and effectiveness of Medicaid programs in delivering quality health care services to its beneficiaries, particularly to the poor as anticipated early during the inception of the program.

Therefore, Medicaid program is experiencing challenges in terms of formulation and implementation of policies and legislations to keep in tandem with increasing number of beneficiaries as well as cost of Medicaid.

Since the cost of Medicaid seems to be unsustainable, comprehensive reforms are essential to streamline policies and legislations regarding eligibility criteria, management of funds and delivery of quality health care services to the increasing number of beneficiaries.

Currently, it is predictable that Medicaid cost is going to overtake the growth of the United States’ economy unless appropriate reforms are in place to reverse or slow the ever-increasing cost of Medicaid (Levy 2008: 7). Thus, evaluation of Medicaid program is timely to provide robust recommendations that are essential in averting predictable health care crisis that may affect Medicaid beneficiaries.

Methodology

Scope and Purpose

The purpose of the study is to evaluate Medicaid program by determining its efficiency, effectiveness, and accountability in delivering health care and medical services to the poor. To achieve its purpose, the study will examine the extent to which Medicaid has implemented its policies and legislations towards achieving its objective of helping the poor to afford and access quality health care and medical services.

Thus, to evaluate the effectiveness and efficiency of Medicaid programs, the study will explore and collect primary data from Medicaid officials with a view of assessing the extent to which they have implemented relevant policies and legislations relative to expectations of the program.

Moreover, the study will assess whether program activities are still in the program theory by evaluating process indicators of Medicaid program.

Given that, Medicaid program is experiencing a challenge of increasing cost that seems to threaten its sustainability; the study will assess cost-effectiveness of its activities in delivering quality health care to the poor. To ascertain the impact of the program, the study will assess outcome indicators by collecting primary data from the poor, who are Medicaid beneficiaries.

Evaluation Questions

The study will conduct a survey, which targets two kinds of participants: Medicaid officials and beneficiaries. Medicaid officials will give information that is necessary in evaluating the extent to which Medicaid has implemented its policies and legislations.

Moreover, they will also provide information that will enable researchers to examine process indicators and evaluate their effectiveness and efficiency in delivery of quality health care and medical services to the poor.

Medicaid officials will also provide data regarding cost-effectiveness of Medicaid given that its cost is increasing gradually while threatening sustainability of the program. Hence, the following questions target Medicaid officials:

Has Medicaid program implemented its policies and legislations according to its objectives?
Is Medicaid program keeping in tandem with the program’s theory of helping the poor to access and afford health care and medical services?
What are the recent reforms that Medicaid has done to improve delivery of health care and medical services to the poor?
Since Medicaid cost is increasing gradually and is threatening the sustainability of the program, what are the cost-effective measures that are in place to reverse or slow increasing trends of cost?
Is an eligibility criterion reliable in selecting beneficiaries who are low-income earners?
Does Medicaid has contingency measures of coping with unprecedented increase in beneficiaries and subsequent Medicaid cost?
What reforms are essential to enhance sustainability, effectiveness, and efficiency of Medicaid program?
Additionally, the study will target Medicaid beneficiaries to collect formation that is necessary to assess outcomes or impact of Medicaid program on the poor. Thus, the study seeks to answer the following questions.
Do you obtain quality health care and medical services through Medicaid Program?
Does heath care system gives you quality health care and medical services as the rich people who have other insurance covers.
Are you happy being a beneficiary of Medicaid?
Has Medicaid effectively relieved your financial expenditure on medical bills?
Since you became a beneficiary, has Medicaid improved or degraded quality of services that it offered with time?
Since Medicaid expanded its eligibility criteria, has quality of health care and medical services changed for better or for worse?
If you were in a position of influence, what are the recommendations that you would give to improve the delivery of quality health care and medical services?

Target Populations

The study will target Medicaid officials who are at the state level, who have vast experience regarding the formulation and implementation of policies and legislations that critical in enhancing Medicaid program to achieve its objectives. Medicaid officials are appropriate participants of the study because they can provide critical information concerning formulation and implementation of policies and legislations.

Moreover, Medicaid officials know challenges that Medicaid is experiencing, for instance, expansion of eligibility criteria, increasing number of beneficiaries and the rising cost that threatens the sustainability of the program among other related challenges.

Fundamentally, Medicaid officials are appropriate participants because they can offer firsthand information to study that is critical in assessing and evaluating the efficiency and effectiveness of Medicaid program in providing quality health care and medical services that are not only accessible but also affordable to the poor. Thus, the study will target Medicaid officials who manage Medicaid programs at state levels.

To assess outcome or impact of Medicaid program, the study will target Medicaid beneficiaries who obtain health care and medical services from local health centers. Medicaid beneficiaries will provide relevant information concerning quality of health care and medical services, which health care system offers to them as beneficiaries of Medicaid.

The quality of health care and medical services is a parameter that measures whether Medicaid program is delivering services to the poor as envisaged by its objectives. Since the Medicaid objective and program theory is to help the poor access and afford quality health care and medical services, Medicaid beneficiaries have relevant feedback, for they are consumers of services that Medicaid program offers.

Therefore, Medicaid beneficiaries are appropriate participants of the study because they know quality of health care and medical services that Medicaid provides to the poor, and thus provide reliable information that is robust in assessment of Medicaid outcomes.

Sampling Frames

The study will sample 50 participants from Medicaid officials who are managing Medicaid program at the state level. A criterion of sampling is that the participants must be in managerial positions with experiences of more than 10 years when serving under Medicaid.

Since Medicaid officials are remarkably few compared to Medicaid beneficiaries, 50 participants will give sufficient information that is critical in assessing the extent of implementing policies and legislations, program theory and other process indicators. Since there are various Medicaid offices within a state, the study will ensure that at least every office gets a chance to participate in the study.

Sampling of participants from every Medicaid office within the state will enhance representation of Medicaid officials and improve external validity of the findings.

The 50 participants are significant for the study to collect primary data, which is reliable and can give robust recommendations that are applicable to other states through extrapolation. Thus, the study will rely on primary data from the sample of 50 participants who represent Medicaid officials.

Since the study also targets Medicaid beneficiaries, it will sample 150 participants. The study will sample 150 participants to enhance external validity of the study as well as considering the availability of resources to conduct an extensive survey. The study will sample participants based on the number of years that they have benefitted from Medicaid as eligible beneficiaries.

The study will sample beneficiaries who have more than five years in utilizing Medicaid services in various health care centers. Medicaid beneficiaries, who have been relying on Medicaid services for over a period of five years, are appropriate because they understand long-term variation in quality of health care and medical services.

Moreover, the study will also sample Medicaid beneficiaries who are married so that they can give essential information regarding how their family members have been receiving health care and medical services. Hence, 150 participants must be having over five years as Medicaid beneficiaries and must be married.

Program Design

To assess process indicators of Medicaid program, the study will conduct a qualitative study by administering open-ended questionnaires to 50 participants, who are Medicaid officials. The questionnaires will contain evaluation questions that seek to assess the effectiveness and efficiency of Medicaid programs in delivering quality health care and medical services to the poor.

Researcher will visit various Medicaid offices within the state and administer questionnaires to participants. The study will continue for a period of one week to ensure that all participants answer their questionnaires effectively. The questionnaires have evaluation questions that will enable researchers to collect robust data for assessing the efficiency and effectiveness of Medicaid program through process indicators.

The study will also conduct a qualitative study to assess outcome indicators of Medicaid program by administering open-ended questionnaires to 150 participants derived from Medicaid beneficiaries.

Given that the 150 participants have more than five years in utilizing Medicaid services, their vast knowledge regarding variation in quality of health care and medical services is an asset to assessment of Medicaid outcome or impact on the poor.

Hence, open-ended questionnaires are appropriate in assessing quality of health care and medical services that Medicaid delivers to the poor. Hence, feedback from 150 participants is reliable in assessing quality of Medicaid services and their impact on the lives of the poor, who entirely rely on it as the only medical insurance available to them.

Data Collection and Processing

The study will collect qualitative data using open-ended questionnaires by administering them to 50 participants. The 50 participants are Medicaid officials sampled from various Medicaid offices. These participants have extensive experience of over 10 years serving under Medicaid, and currently, they hold managerial positions where they influence formulation and implementation of policies.

To collect appropriate data, researchers will visit numerous Medicaid offices to administer open-ended questionnaires to the 50 participants.

The researchers will have a period of one week to administer the questionnaires to participants and ensure that they complete their questionnaires appropriately. After administering questionnaires and collecting relevant data, the researchers will then analyze the data and provide it in summary form.

Likewise, the study will collect qualitative data from 150 participants, who are Medicaid beneficiaries. To collect qualitative data, the study will employ open-ended questionnaires, which seek to answer evaluation questions that are critical in assessing quality of health care and medical services, which Medicaid offers to the poor.

To access 150 participants who are married and who have been relying on Medicaid for more than five years, the researchers will visit various health care centers where participants usually obtain health care and medical services.

As in the case of Medicaid officials, the researchers will administer the questionnaires for a period of one week to ensure that all participants complete their questionnaires and eventually summarize the data for further analysis.

Data Analysis

The study will analyze data in terms of process indicators and outcome indicators. To assess the effectiveness and efficiency of Medicaid policies and legislations in delivery of quality health care and medical services, the study will analyze qualitative data by examining whether Medicaid has achieved significant progress through process indicators.

The study will assess whether Medicaid policies and legislations are in tandem with program theory, and logic model of helping the poor to access and afford quality health care and medical services in the health care system.

Additionally, to assess whether Medicaid is delivering quality services to the poor, the study will analyze and summarize questionnaires to derive relevant information regarding Medicaid impact using outcome indicators.

Outcome indicators will show if Medicaid beneficiaries are receiving quality health care and medical services as per the program theory. Thus, comprehensive analysis of the data will give robust recommendations that are critical in reforming Medicaid to achieve its noble objectives in providing quality health care to the poor.

Conclusion

Medicaid is a health program established by the Congress in 1965 to enhance accessibility and affordability of health care services to the poor and unprivileged in the society. It has gradually grown with time due to expansion of eligibility criterion of selecting beneficiaries.

The eligibility criterion has included pregnant women, people living with HIV and disabled people among other distinct groups who need medical services. Due to increase in beneficiaries, Medicaid cost has been increasing faster than growth of GDP, hence threatening the sustainability of the program.

Thus, to enhance sustainability, the study proposes to evaluate Medicaid program by assessing effectiveness and efficiency of implementing policies and legislations. Moreover, the study proposes to assess the quality of health care and medical services that Medicaid offers to the poor.

Reference List

DeParle, Nancy-Ann. 2000. A Profile of Medicaid. U.S. Department of Health and Human Services, 1-87.

Dorn, Stan. 2004. Medicaid Coverage for Poor Adults: A potential Building Block for Bipartisan Health Reform. Economic and Social Reform Institute, 1-25.

Egert, Beau. 2003. Medicaid Issues and Challenges. Texas Public Policy Foundation, 4-11.

Levy, Elliot. 2008. Gifted and Medicaid. Journal of Finance and Accountancy, 1-8.

Sheldon, James. 2005. Medicaid and Persons with Disabilities: A Focus on Eligibility, Covered Services and Program Structure. School of Industrial and Labor Relations Employment and Disability Institute, 1-24.

Truffer, Christopher, John Klemm, Christian Wolfe, and Kathryn Rennie. 2010. Actuarial Report on the Financial Outlook for Medicaid. Centers for Medicare & Medicaid Services, 1-39.

Zommorrodian, Asghar, and Lucica Matei. 2010. Program Evaluation: Its Significance and Priority for Shaping and Modification of Public Policies: A comparative Analysis. American Society of Business and Social Sciences 17, no.1 (February): 979-996.

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