A Pennsylvania study of how health-maintenance organizations handle Medicaid clients provides new evidence that the U.S. isn't close to solving the health-care issue. Until someone - the government, industry - begins looking at the whole picture instead of at separate pieces of it, solutions will remain elusive.
Pennsylvania began its two-year Medicaid experiment, called HealthChoices, on Feb. 1, requiring all Philadelphia-area Medicaid patients to enroll in one of four HMOs. But now that first-quarter financial reports are in, all are reporting losses under the program, in part, they say, because the state underestimated the huge costs involved in treating AIDS patients.
State welfare officials say the profit picture will turn around in July, when the state hikes the rates it pays these providers. Barbara J. Plager told the Philadelphia Inquirer the state needs to provide HMOs with financial incentive to take on AIDS patients.
Perhaps the state can provide the HMOs with additional incentives, but here's the problem. If everyone at every level concentrates on cutting costs in isolation, long-term solutions go begging.