My personal experience with HMO’s is that at first they did an excellent job in providing preventive care they were truly interested in your health and ran tests just make sure you had no underlying health problems. Within five years I had signed up with a new HMO who wouldn’t run any tests. I was told that even if my father had prostrate cancer it wasn’t hereditary (a ball faced lie) and denied my request for a PSA test. Clearly this HMO was the pits and only in business for the money it was getting from my employer while providing the least healthcare services they could get away with. For some states HMOs may be a backdoor way to shift the blame for lack of adequate healthcare from the state to the HMO. In the late 1990’s the cost of healthcare premiums went through the roof. In just a few years my annual premiums went from $5,000 to $13,000.

The biggest mistake being made by states is in not finding out where the money is really going. Is it going to new facilities, new equipment, salaries (doctors, nurses, specialists), special services (sports medicine, nursing home services, etc.) or increased medicine costs. You must know where a disproportionate amount of the funds are going and the best way to this is through state auditing. Simply increasing funding clearly has not and will not solve the problem as costs explode. The crisis is real hospitals have increasingly taken to illegally adding false services and unnecessary items to patients bills.

Once we find where the funds are going we can pick those items that the state legislature can deal with and bring under control. For example doctor’s salaries driven by high liability insurance premiums. The legislature can cap proceeds from medical malpractice law suits and form a state insurance pool for doctors to pull premium costs down.

Auditors can survey hospital room costs and salaries to determine if they are out of line with national averages. A survey of facilities funding will determine if funds are spent on giant atriums instead of hospital rooms. Do area hospitals have reciprocal agreements to share the latest technological equipment or does each try to get all the new technologies which are then under utilized?

A state doesn’t need auditors to know that Medicaid costs are out of control and linked directly to the increasing costs of prescription drugs. My solution which I have stated elsewhere is to form a national consortium of states to negotiate directly with drug manufacturers to obtain pricing at least as low as that found in Canada. As long as the states are divided and have no negotiating power the sky seems to be the limit on prescription drug prices.