The Commonwealth Foundation released a report by Michael Bond on reforming Medicaid in the Keystone state in May (I am tardy in blogging on the subject).  Bond writes:

Over the last 25 years, Pennsylvania’s Medicaid spending increased approximately 8% annually, versus approximately 6% for overall medical spending.  In 1980, Medicaid represented around 12% of the state budget. As of 2007, that total had increased to almost 26%. At this rate of growth, Medicaid will consume 94% of the Pennsylvania budget in the year 2075.
 
Unfortunately, the enormous fiscal problems facing Medicaid often overshadow its other major flaw: a well deserved reputation as a low-quality provider of health care. The program delivers episodic treatment, provides poor preventive care, and offers low-quality services to many beneficiaries. The plan produces some tragic health outcomes for America’s most vulnerable populations. It is routinely abused by both providers and beneficiaries. This ranges from Medicaid “mills” to outright theft. There have been estimates that as much of 40% (over $100 billion) of Medicaid spending involves abuse and fraud.
 
States should create insurance and provider exchanges for the provision of services to beneficiaries. Unlike the current price control system, those eligible for Medicaid will receive risk-adjusted credits to purchase services from competing plans. This would turn Medicaid into a real market in which buyers act in their own interest and providers compete to enroll beneficiaries and would also produce gains in efficiency that would make Medicaid sustainable in federal and state budgets and, just as importantly, improve the quality of health care that beneficiaries receive.

Click here for the full report (PDF file).