Tuesday, April 22, 2008

Did This Cost-Cutting Save Any Money?

I'm told that part of why Idaho Health & Welfare, about five years ago, adopted a much stricter interpretation of their current standards for Medicaid reimbursement of mental health services, was to get spending under control. You might criticize this as a skinflint approach--except that it seems not to have worked. From Budget: Mental Health and Substance Abuse in Idaho (2006), p. 3, we can see that the Medicaid portion of the mental health services budget rose from $59,388,281 in FY 2003 (actual) to $115,447,200 in FY 2005 (estimated). That means Medicaid budget for mental health services almost doubled in a period of limited inflation and at most, a few percent growth in the state population. Huh?

My guess is that the problem may be that by effectively cutting off mental health services in rural Idaho, this strict interpretation meant that a lot of people with mild mental health problems received no services--and by the time their problems became acute, requiring hospitalization, the costs were much higher.

I'm a tightwad on government spending, but there are times that a short-term view of the problems is not only inhumane, it's more expensive.

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