Who Needs Medicaid?

Faced by a worsening economy and a powerful public mandate to decrease taxes and non-defense government expenditures, many are calling for additional cuts in spending for Medicaid-a large, not very popular program that pays for the medical care of many of the nation's poor. Available evidence suggests that Medicaid has been far more valuable than is commonly realized: It serves a broad cross-section of the American people, its adoption coincides with major improvements in the health of Americans, and its costs per recipient are about the same as the costs of care per person for all Americans of similar age. Not widely recognized is the program's importance to the financial well-being (if not the very survival) of any major teaching hospitals and the majority of nursing homes in this country. Public and professional awareness of the accomplishments of this program may be a crucial factor in determining whether the cuts will spare many of the gains in access to medical care that have been made during the past two decades. If we do not wish to reduce needed medical services to the poor, health-care institutions and health professionals will have to cooperate with each other and with the government in developing less costly ways of delivering high-quality care.