The effort focuses on creating networks of primary care physicians or hospitals that would have financial incentives to keep Medicaid costs below set levels but would also share in cost overruns. The so-called “accountable care organizations” are predicted to create most of the cost savings in the proposal for Medicaid, the combined federal-state health coverage program for 1.8 million North Carolina residents, who are mostly poor children, older adults and the disabled.
Overall, the reform effort would begin in July 2015 and slowly create savings that reach $329 million annually by mid-2020, one-third of which would be earmarked for the state. The total accumulated savings over five years could reach close to $1 billion. For a program that spends $13.5 billion annually in federal and state funds, the predicted savings would be 2 to 3 percent, Wos said.
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