Why Medicaid is U.S. Healthcare’s Biggest Opportunity
“Medicaid, then as now, was the understudy to Medicare. It was understandable: per capita costs for caring for seniors were three times those in Medicaid, and aging was the tsunami health officials saw. In the 60-years since, Medicare has become the arbiter for federal reimbursement in every setting where seniors received services. It has enabled hospitals and specialty care to expand and limited preventive and primary care to the bare minimum. And its version of managed care, Medicare Advantage plans, now enroll over half its 70 million enrollees. It’s ridden on the back of federal policy, while states have been left to fend for themselves in Medicaid. But that’s changing. …
Results from Medicare’s cost containment efforts—accountable care organizations, alternative-payment models, value-based purchasing, price transparency et al—have been mixed. By contrast, Medicaid initiatives in states ranging from payment integrity programs to changes in state directed payment policies have produced significant savings necessary to surviving the $1 trillion, 10-year cut to federal Medicaid funding in the Big Beautiful Bill.
Medicaid is the health system’s most important platform for applying evidence to care cost-effectively from cradle to grave.”
Paul Keckley, July 26, 2026