Good use for health care dollars

May 21, 1993

It doesn't take a financial wizard to understand that one force driving the country's out-of-control health care costs is the tendency to favor intensive, high-tech, expensive methods of care over preventive and maintenance care. A prime example is that elderly people who are poor or disabled and need some assistance, but not full-time care, can only get the help they need by entering a costly nursing home.

fTC L Why? Because that's the only way Medicaid will pay the bill.

State officials announced this week that a new federal waiver will allow Maryland to use Medicaid dollars to keep people out of nursing homes by paying for them to live in group homes at half the cost. Minnesota already has a similar program and Texas will began one later this year.

The waiver will save taxpayers about $4.5 dollars over three years by expanding a state program that subsidizes group homes for elderly people who are poor and frail. That amount represents only a fraction of the $2 billion spent annually on Medicaid in Maryland, and only a small savings in the state's $450 million Medicaid budget for nursing home care.

But in human terms, the waiver will make a huge difference. Life in one of the group homes subsidized by the program is a far cry from confinement in nursing homes, however well they are run. ** These places are not antiseptic institutions, but rather houses that look and feel and smell like homes. Maryland has about 150 of them, each housing anywhere from four to 15 people.

News of the waiver came more swiftly than state officials expected, less than three months after the request was made. Apparently, President Clinton's call in early February to streamline the procedures for Medicaid waivers has gotten results. It is through these waivers that states are experimenting with small-scale health care reforms, finding ways to improve treatment, offer preventive care and stretch scarce dollars to cover more people. Maryland's waiver helps on each of these fronts.

It also addresses an issue often raised by state Health Secretary Nelson J. Sabatini -- a system which ends up spending big dollars on full-scale health care simply because it doesn't have in place the less expensive social programs that would prevent the need for that expense in the first place.

The federal waiver helps reverse that trend. By allowing the state to use health care dollars for what is essentially a social program, it helps shift costs to less expensive, more appropriate -- and more humane -- settings.

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