While it seeming not as controversial as things like public worker compensation reform and right to work, Medicaid is a hugely important issue. To put Medicaid’s cost into quick perspective, it now accounts for somewhere around 30 percent of the state budget.

We have previously blogged on some of the strategies that the Kasich Administration was looking to employ to get a grip on what former Governor Voinovich called the “Pac-Man” of the state budget.

You can check some of those out here and here.

Now, some of the plans we talked about before are getting closer to being made operational. This includes:

* new managed care contracts that will focus on compensating them based on health outcomes;
* reaching out to the private sector to combine public and private health care purchasing power;
* zeroing in on patient centered “medical homes” to facilitate coordination of care;
* a shift towards more home and community based care vs. institutional nursing home care.

The goals of all of this is to better coordinate care and make positive health outcomes the criteria for provider reimbursements while shifting patients to settings more appropriate for their actual needed level of care. Cumulatively, these actions are expected to reduce the long-term costs of healthcare.

We are still very early in this process, so it is premature to pass any sort of judgment, either positive or negative.

However, as the Buckeye Institute’s Crushing Weight report from 2010 makes clear, these efforts can’t come too soon in order to limit what is shaping up to be a major cost explosion due to the advent of ObamaCare.

Essentially, ObamaCare will open the floodgates for entry into Medicaid for what is likely to be hundreds of thousands of new program enrollees. Some of this will be the result of those newly eligible for Medicaid entering the program, while many will be from those who have been eligible but did not sign up previously, but now presumably would due to the individual mandate component of ObamaCare. From our report,

“Utilizing the national estimates released by the Office of the Actuary at the Center for Medicare and Medicaid Services, it is estimated that nearly 565,000 additional Ohioans will be enrolled in Medicaid at a seven-year (2014–2020) additional cost to the state of nearly $1 billion because of the Patient Protection and Affordable Care Act (“ObamaCare”).”

The need to tackle Medicaid is absolutely essential if Ohio is to be able to keep its checkbook balanced without resorting to increased taxes (for more on why, also check out this recent George Will column). It should also be pointed out that even should the U.S. Supreme Court strike down ObamaCare in its entirety (far from a foregone conclusion) after hearing oral arguments at the end of March, Medicaid will still be on an unsustainable path without major change.

All of these reforms bear close monitoring, something the Buckeye Institute plans to do.