Medicaid is a prime target for state budget savings.  Twenty-six states have cut Medicaid this fiscal year by reducing provider payments, benefits, eligibility or by increasing co-payments.

But Medicaid should be strengthened, not weakened, during difficult economic times.  Medicaid is an important source of federal revenue for states and helps stimulate the economy.  Also, Medicaid is a safety net that keeps many families insured when they lose employment-based health insurance.  The current crisis provides an opportunity to strengthen Medicaid by improving quality while containing costs.

Saving Money by Improving Medicaid provides short term and longer term cost containment options for states.

Chronically ill patients account for the largest portion of Medicaid spending, and care management programs can save money and improve the quality of patient care.

Tying treatment decisions more closely to evidence of effectiveness can save money and improve care. Longer-term cost containment strategies also have great potential to improve quality.

Read the report here.