Word: arizona
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...computer turned out to be an expensive but ultimately efficient secret to the program's success--but one that other states will be hard put to duplicate with fewer federal dollars. Although ahcccs' administrative costs are higher than those in states that operate under a traditional Medicaid system, Arizona is still saving money. According to a report by the General Accounting Office (gao), Arizona is saving 7% a year on acute care and 16% on long-term care, compared with a similar program in neighboring New Mexico, a state with comparable demographics...
...Arizona's computer system also helps keep the bidding for its contracts competitive. With comprehensive records on the cost of every procedure, administrators know what kind of bid to expect from would-be providers--and what is too low to be realistic. Still, the competition to win contracts is so keen that the system's capitation rate--the cost per patient, which averages $1,824 a year--dropped 11% last year. In the last bidding go-around, in 1994, 21 health-care groups, including such national giants as Blue Cross and Cigna, sent in 95 proposals for only 42 contracts...
Letting market forces rule satisfies the cost cutters in the state, but it also helps the patients. The Arizona program does not permit would-be providers to select only the healthiest patients, a practice called cherry picking in the health-care business. If providers want a contract, they must be prepared to take on the care of the disabled, the elderly, and women and children...
Charlene and Todd Weber, for instance, could never have handled caring for their daughter at home without the safety net provided by the Arizona system's long-term-care program, which guarantees aid to severely disabled children. In 1992 Charlene had twin girls, one of whom, Ariel, was born seriously disabled, with no genital body openings and many of her internal organs in the wrong place. Charlene, a part-time flight attendant for America West, and Todd, a supervisor in a waste-disposal company, have a combined income of about $45,000. Todd's employee health insurance, Intergroup, paid...
...Arizona's big surprise is the effect the program has had on the state's doctors. The reimbursement rates are kept high enough so that they actually want to join. And health-care groups are raking in so much money--they took in $54 million in net profits last year, a 25% increase from 1993--that experts suggest that members of Arizona's "notch" population--the uninsured working poor--be added to the plan as well. But that is an unlikely outcome now. Even states like Arizona, which have created a lean Medicaid machine with very tight eligibility requirements...