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by Amy Beth Graves

Ohio needs Medicaid reform now to help control state spending and prevent deep cuts in the Medicaid program in the future, Ohio Farm Bureau Federation (OFBF) Executive Vice President Jack Fisher told the Senate Finance Committee recently.

Fisher testified last month about the need to reform Medicaid, which accounts for about 40 percent of the state’s biennial budget – nearly $10.5 billion. Fisher testified on behalf of a coalition of major business associations: National Federation of Independent Business-Ohio, Ohio Chamber of Commerce, Ohio Business Roundtable, Ohio Manufacturer’s Association and Ohio Council of Retail Merchants.

"This is the first time major business groups in Ohio are united together in Medicaid reform. That is very significant," said Rocky Black, director of OFBF’s legislative affairs.

The coalition has examined and supports many recommendations made by the Ohio Commission to Reform Medicaid, a bipartisan group created by Gov. Bob Taft and the state legislature. The group has concluded that Ohio’s Medicaid system is "fraught with structural, policy and programmatic complexities and inefficiencies that do not always serve well the needs of the 1.7 million low-income and disabled Ohioans it serves."

"Medicaid costs are dictating budget priorities and choking off discretionary spending on education, higher education and other vital programs," Fisher told Senate Finance committee members May 17. Ohio State University Extension, Ohio Agricultural Research and Development Center, Ohio Department of Agriculture and Soil and Water Conservation Districts are among the vital programs that often lose out, according to Fisher.

Ohio must have a new biennial budget in place by July 1, and a House/Senate conference committee is in charge of coming up with a final budget proposal.

Establishing fiscal responsibility on the state level has been the most important public policy goal for OFBF this year, and a key to that is reforming Medicaid, Black said. He said that if Medicaid and the state budget keep growing, legislators will start eyeing the agriculture industry for cuts.

Besides testifying before the Senate committee, Fisher met with Taft to discuss Medicaid reform and wrote a Medicaid opinion piece, which was printed in several newspapers.

"Medicaid spending is paralyzing the state budget and defeating every honest effort to bring state spending under control. That’s why what happens with the state budget bill is so vital," Fisher wrote.

Black said significant Medicaid reform can be accomplished without reducing services or eligibility.

Some of the Medicaid reform recommendations that OFBF and the business coalition support are:

• Competitive selective contracting – The Ohio Department of Job and Family Services, which administers Ohio’s Medicaid program, has authority from the federal government to selectively contract for items such as lab services and medical devices. However, the agency has only used this competitive tool to purchase eyeglasses. This practice should be expanded to increase the state’s buying power, which would control costs and improve quality.
• Pay for performance – Ohio’s current system lacks pay-for-performance or outcome-based goals. Incentives should be offered to improve outcomes in areas such as patient education, provider outreach and interaction with social service agencies.
• Managed care – Ohio needs managed care for its most expensive category of Medicaid recipients -- the aged, blind and disabled. They account for 24 percent of the caseload but use 74 percent of Medicaid’s resources.
• Pharmacy program – Consolidating the procurement and management of the state pharmacy program and requiring a shift to generic drugs will result in cost savings and promote efficiency. For every 1 percent switch to generic drugs, Ohio would save $20 million per year.
• Information technology – Ohio needs a modern data management system to more effectively track Medicaid expenditures.
• Medicaid oversight council – The legislature should have continuing oversight of Medicaid changes and operations to provide ongoing independent review and to track and ensure appropriate progress.

"Bringing Ohio’s Medicaid spending under control will not be easy," Fisher wrote. "But continuing in our current direction will bankrupt the state. Failure to act now only digs the hole deeper and will make the ultimate reckoning more painful."

Caption: Ohio Farm Bureau Federation Executive Vice President Jack Fisher testifies before the Senate Finance committee about Medicaid.