Gov. Warner: IT needed to cut Medicaid costs

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Washington, D.C. –- Spiraling Medicaid costs will bankrupt every state in the country by 2020 as the federal government shifts more of the health care burden to the states, said Virginia Gov. Mark Warner. He urged a significant increase in health care information technology to help cut costs.

Speaking here at an eHealth Initiative conference, Warner said the added financial burden, coupled with longer life spans, is eating into state education budgets and will soon put the “needs of grandma over the grandkids.”

Virginia’s annual Medicaid bill is $5 billion a year and growing, but Warner said he hopes health IT systems can help shave 8 percent to 15 percent off Medicaid costs. Virginia has formed a public/private partnership with Carillion Health System to test an electronic health record system in the southern part of the state, but Warner urged a significant increase in federal spending on health IT.

President Bush requested $125 million for health IT in his fiscal 2006 budget, and Warner said that in the future such finding should be in the billions of dollars. He added that health care providers and insurers should be financially rewarded for installing and using health IT systems.

They should also be penalized for not embracing money-saving technologies such as electronic health records, and Warner said he foresees a day when the use of such records will be mandatory.