Stateline Story

Report: Six States Changing the Way Health Care is Governed

With Medicaid costs expected to double by the end of the decade, nearly every state has taken all allowable measures to cut costs, including greater use of managed care, changes in the way doctors and hospitals are paid and limits on drugs and services.

But at the same time, some states are taking a broader approach to improving health care while still keeping a lid on costs. Kansas, Maryland, Ohio, South Dakota, Vermont and Washington are revamping the way they administer health care policy, according to a new report from the National Governors Association, " Redesigning State Government ."

Maryland's Democratic governor Martin O'Malley this year created a public-private council to coordinate quality and cost initiatives among medical groups, insurers, health insurance exchanges, state and local entities, advocacy groups and other stakeholders in the state, according to the report. Among its tasks, the Maryland Health Quality and Cost Council will research ways to improve chronic illness care and promote evidence-based practices, such as coordinating medical, rehabilitative and long-term care services for people who suffer strokes and heart attacks.

Ohio's governor, John Kasich, a Republican, created a temporary Office of Health Transformation (OHT) to oversee implementation of the national health law and create a more efficient health care policy structure. The new group also will form partnerships with the private sector to improve health care delivery and financing.

Lawmakers in Vermont created a Healthcare Authority with tall orders: Examine options for moving from fee-for-service to a system of flat payments to medical providers. It also will oversee the state's move to a so-called "single-payer" health care finance system in which all available federal and state funding will be used by the state to provide health coverage for every resident.

The other three states' changes were aimed primarily at better government coordination.  GOP Governor Sam Brownback eliminated the Kansas Health Policy Authority and merged its functions into the Kansas Department of Health.

Democratic Governor Chris Gregoire of Washington consolidated the state's two largest health care purchasers — Medicaid and the Health Care Authority , which manages state employee and retiree benefits, as well as a state-funded program for low-income people who do not qualify for Medicaid.  

South Dakota Governor Dennis Daugaard, a Republican, has plans to move three behavioral health programs — mental health, alcohol and drug abuse and human services-that are funded heavily by Medicaid into the South Dakota Department of Social Services , which administers Medicaid.