Report: Medicaid to boost state health care outsourcing

State government spending on health care outsourcing will increase 17 percent over the next five years, as states struggle to adjust to rising Medicaid costs and competing budgetary costs for homeland security initiatives, according to a new study.

Market research firm Input Inc. of Reston, Va., reported this week that state spending on health care outsourcing will grow from about $500 million in 2003 to $1.1 billion in 2008.

"The new political environment and continuing budget crisis allows officials more freedom to review sensitive policies and management practices to address increasing Medicaid costs," said James Krouse, Input's manager of state and local market analysis.

Faced with an 8.7 percent annual increase in Medicaid costs over the next five years, states are considering measures that include outright Medicaid cuts, restricted program eligibility and, more significantly, outsourcing state Medicaid management information systems.

The gap between state operating costs and anticipated revenues is expected to widen to greater than $82 billion in fiscal 2004, according to the study. Because Medicaid cost increases are coming in conjunction with weaknesses in the economy and faltering tax collections, state governments will be forced to review cost containment measures against budget priorities, Krouse said.

"Events following Sept. 11, 2001, have dictated that tremendous resources are now required to ensure the safety of the country and the American people," he said. "In order to balance budgetary needs, public officials are forced to review priorities and weigh the expenditure of limited resources for programs such as Medicaid vs. new requirements for homeland security."

About the Author

William Welsh is a freelance writer covering IT and defense technology.

Reader Comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

What is your e-mail address?

My e-mail address is:

Do you have a password?

Forgot your password? Click here
close

Trending

  • POWER TRAINING: How to engage your customers

    Don't miss our Aug. 2 Washington Technology Power Training session on Mastering Stakeholder Engagement, where you'll learned the critical skills you need to more fully connect with your customers and win more business. Read More

  • PROJECT 38 PODCAST

    In our latest Project 38 Podcast, editor Nick Wakeman interviews Tom Romeo, the leader of Maximus Federal about how it has zoomed up the 2019 Top 100. Read More

contracts DB

Washington Technology Daily

Sign up for our newsletter.

Terms and Privacy Policy consent

I agree to this site's Privacy Policy.