As more people obtain health insurance through the Affordable Care Act’s exchanges and its expansion of Medicaid -- the federal-state program for low-income individuals -- policymakers should focus on ensuring that the health care system can meet the increased demand for services.
As people gain insurance, they tend to increase their utilization of health care. (See, for example, this report from the Medicare and Medicaid actuaries.)
Thus federal and state policymakers need to work together to make the health care system more efficient so that expenditures on health care don’t crowd out other important government programs. Possible solutions to this challenge can be found in Oregon, which has experimented with payment and delivery reforms in Medicaid in ways that could serve as a model for the rest of the country.
Reforming the delivery of care for Medicaid patients is not an easy task. An analysis of a landmark...