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Medicare and Medicaid: Conflicting Incentives for Long‐Term Care
Author(s) -
GRABOWSKI DAVID C.
Publication year - 2007
Publication title -
the milbank quarterly
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.563
H-Index - 101
eISSN - 1468-0009
pISSN - 0887-378X
DOI - 10.1111/j.1468-0009.2007.00502.x
Subject(s) - medicaid , incentive , capitation , incentive program , business , government (linguistics) , long term care , public economics , health care , population , cost sharing , baby boom , managed care , actuarial science , nursing , medicine , economic growth , finance , payment , economics , environmental health , microeconomics , linguistics , philosophy
The structure of Medicare and Medicaid creates conflicting incentives regarding dually eligible beneficiaries without coordinating their care. Both Medicare and Medicaid have an interest in limiting their costs, and neither has an incentive to take responsibility for the management or quality of care. Examples of misaligned incentives are Medicare's cost‐sharing rules, cost shifting within home health care and nursing homes, and cost shifting across chronic and acute care settings. Several policy initiatives—capitation, pay‐for‐performance, and the shift of the dually eligible population's Medicaid costs to the federal government—may address these conflicting incentives, but all have strengths and weaknesses. With the aging baby boom generation and projected federal and state budget shortfalls, this issue will be a continuing focus of policymakers in the coming decades.