Article at a glance:

Intensive care for Medicaid

Medicaid presents one of the most difficult budget challenges facing the United States today. A new analysis by McKinsey suggests that the costs of the program are becoming unsustainable: even after economic growth returns to a steady pace, Medicaid will consume more than 75 percent of new state revenue in ten states by 2009. As the risks of inaction start to exceed the risks of action, state and federal leaders must create a new consensus for reform to put the program on a more stable footing.

The take-away

Medicaid's current state provides ample opportunity for savings, but capturing them will call for careful analysis, difficult decisions, and creative political leadership.