OPTIONS FOR REDUCING THE DEFICIT

Options for Reducing the Deficit

Saneeka Hunter
MHA/516
March 12, 2018

Thom Sloan


Options for Reducing the Deficit
Medicaid is a program that pays for care for groups of low-income; which are mostly women and children, the elderly, and people with disabilities including low-income families. Because the government covers the health care costs of many people who cannot afford private health care coverage, we would want to impose caps on federal spending because if a state spends more because of the amount if people enrolled that may increase or the costs per person will rise, there will be a more substantial federal payment that is automatically generated ("Options for Reducing the Deficit: 2017 To 2026", n.d.). Hospitals would be able to generate budgetary savings in greater or lesser amounts, and this would be great for the organization. Going this route for changes within a hospital setting would curb an adverse effect.

Imposing Caps on Federal Spending for Medicaid in a Hospital Setting That Can Help Curb Negative Effects

Imposing caps on federal spending for Medicaid would have a considerable incentive by budgeting better because the federal government matches states’ Medicaid spending they would add an additional dollar spent on how much Medicaid is worth to a state then an additional state dollar spent outside of the program (Adler, Fiedler, & Gronniger, 2017). This would help the organization by being able to keep the extra funding and use it wisely for equipment and supplies that they hospital make be lacking. Imposing this cap is also a way to curb negative effects because the federal government would even know which group of people to have the most funds for. They would be able to pay the maximum preset amount for each Medicaid enrollee regardless of the actual spending for that year; payments would be different for each Medicaid eligibility group (Layton, Montz, & McGuire, 2017). One thing that may be an issue would be that the hospital would get this payment one time in a year they spend more than the total cap.

United States hospitals will have a loss of Medicaid funding as the years go on, but with this cap, they can start to come up with a process that can help them budget their finances better. Although they can have some disadvantages with imposing caps on federal spending if they have an efficient system they can not overspend and gain extra funding from the government as a reward. Hospitals have a lot of waste issues, so keeping track of waste and supplies being wasted would help to keep their budget on track.

Conclusion

In conclusion, there are many advantages and disadvantages that could take place while imposing a cap on federal spending on Medicaid in a hospital setting. It will all depend on how well budgeted the hospital is, and how well they manage their finances. Because Medicaid is so vital to low-income families, the elderly, people with disabilities, and women and children, it is essential for hospitals to come up with ways to keep them covered with the Medicaid program because the hospital is where people who cannot afford private healthcare insurance go to.



References

Adler, L., Fiedler, M., & Gronniger, T. (2017, May). Effects of the Medicaid per capita cap included in the House-passed American Health Care Act. Brookings, (),. Retrieved from https://www.brookings.edu/research/effects-of-the-medicaid-per-capita-cap-included-in-the-house-passed-american-health-care-act/

Haught, R., Dobson, A., & DaVanzo, J., & M. K., Abrams., (2017, June). How the American Health Care Act’s Changes to Medicaid Will Affect Hospital Finances in Every State. The Commonwealth Fund, (),. Retrieved from http://www.commonwealthfund.org/publications/blog/2017/jun/how-changes-to-medicaid-will-affect-hospital-finances-in-every-state

Layton, T., Montz, E., & McGuire, T. (2017, June). The Downstream Consequences Of Per Capita Spending Caps in Medicaid. Health Affairs, (),. Retrieved from https://www.healthaffairs.org/do/10.1377/hblog20170626.060813/full/

OPTIONS FOR REDUCING THE DEFICIT: 2017 TO 2026. (n.d. ). Retrieved from https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/52142-budgetoptions2.pdf