Tyler Cowen thinks that one way to reduce the fiscal burden on States is to move Medicaid to the Feds. Wisconsin may be taking a first step in that direction. Wisconsin Governor Jim Doyle, having to make $400 million in Medicaid cuts, left these cuts up to Federal Medicaid officials. Newsweek reports that “The fixes, most of which kicked in this summer, were a predictable mix of new contracts and procedures (incentives for natural birth will save $4 million in C-sections).”
Although the State/Federal funding arrangement is the same, Wisconsin’s shifting decisionmaking power to the Feds may augur for a more centralized Medicaid program. Governor Doyle believes that shifting these decision reduce the power of lobbyists. According to teve Barton, president of the hospital lobby Wisconsin Hospital Association believes that shifting decisions to the Feds means lobbyists lost influence, officials were insulated from blame, and lawmakers were shielded from “tough votes.”
This politics-free honeymoon, however, will likely be short-lived. If State Medicaid decisions are made at the Federal level, lobbyists will simply move from Madison to Washington. In fact, lobbying may increase since the cost of these political wrangling will be less expensive if all Medicaid decisions are centralized.
As long as some form of government–State or Federal–runs healthcare, believing that these decisions will be free of lobbying influence interests is naive.