Governor Jindal plans to steer working-poor Medicaid recipients out of the current “fee for service” program, where the state pays a set rate for all health-care charges (some 54 million this year). Instead, they’d choose among private managed-care plans, with Louisiana paying a fixed per-patient amount, adjusted for health risks. Essentially, Mr. Jindal wants to use Medicaid dollars to fund something like private insurance. That way, physicians and hospitals will be compensated for outcomes — rather than volume of visits and procedures — and get incentive payments for good performance.
Such a “defined contribution” plan is one way to wrestle run-amok health costs back under control and spend more responsibly. It isn’t a new idea, but it is a good one. Congressional Republicans passed a similar reform in 1995 for Medicare, which Bill Clinton vetoed — only to have his own bipartisan commission endorse it in 1999.
Bobby Jindal has been in the Louisiana governor’s seat for just a year now — but what a difference from the typically corrupt politics of that state. His popularity polling was running 77% after his first six months in office. There’s a bit of a Jindal profile at The Nation.