* It’s easy to just say “Cut people off All Kids coverage if they make too much money.” But, as always, there is a very strong human dimension to any budget cut. WBEZ has an article about one of the 4,000 children who will lose All Kids coverage on July 1st, because her family makes more than $60,000 a year…

The Wright household is wrapping up dinner this weekday night. Vinita Wright cooked fried rice and husband Jim rinses bowls as he loads the dishwasher.

The couple has guardianship over Sara Opsenica, the daughter of a family friend. Sara’s a high school freshman diagnosed with cancer, specifically, non-Hodgkin’s lymphoma. Vinita shows me a bag of liquid Sara gets hooked up to overnight.

VINITA WRIGHT: This is nutrition. We call it TPN. I don’t know what that means. But it’s basically nutrition. There are lipids in it, that’s why it’s white. it’s a fatty substance.

Sara’s prescriptions, hospital visits, chemotherapy have all been paid for underAll Kids. Sara was diagnosed last fall but had been on All Kids for several years. Sara’s father had been unemployed but he’s now a shuttle bus airport driver, and his health insurance coverage is haphazard; he’ll be off it a while, then he’ll have coverage, only to be off again. The family says All Kids has been a relief.

SARA OPSENICA: My dad doesn’t make a lot of money. We just have Social Security because my mom passed away. The All Kids have paid for everything. I don’t think - we have a small co-pay of my prescriptions but I don’t think my dad has gotten any hospital bills. […]

Back in Chicago’s West Chesterfield neighborhood, Vinita Wright is considering what will happen to Sara Opsenica, the girl in her care. Vinita says Sara’s chemo treatment should last another 16 months, but All Kids runs out in less than three.

VINITA WRIGHT: There’s so much stress connected to this cancer business…to not have to deal with a whole other several layers of stress having to do with which bill do we attempt to pay first.

Cutting Medicaid will be without a doubt the toughest vote some legislators will ever take in their careers.

* Meanwhile, the Tribune recently looked at the Medicaid numbers…

• Stop services for people who simply don’t qualify. Some recipients don’t even live in the state. Some make too much money to get health care designated for the poor. An estimated 100,000 to 300,000 people can be removed, saving $100 million to $700 million a year. Julie Hamos, director of the Department of Healthcare and Family Services, is moving to scrub the rolls.

• Speed the switch to managed care to save money and improve quality of care. Managed care generally means patients are assigned a “medical home” — a doctor (it could be an HMO-style clinic) who oversees their care. Doctor and hospital fees are geared to delivering better health care, not just more of it. So far, only a fraction of those patients have been switched to managed care. The state now says it can dramatically pick up the pace, moving some 85 percent of Medicaid recipients into managed care by the end of fiscal 2013.. Savings: $200 million to $500 million a year. We’ve heard these promises before, though. Time to deliver. […]

Prescription drug coverage costs Medicaid $814 million a year. Eliminating that wouldn’t be wise because many drugs help control chronic conditions and prevent expensive hospital stays. But drug coverage can be prudently trimmed. If Medicaid recipients were limited to five prescriptions a month (there are virtually no limits now), the program would save a whopping $136 million. Several states have done this. The hope is that a limit would force doctors to better coordinate recipients’ prescription drug care. Possibly on the block: Illinois Cares Rx, a supplemental drug program for seniors that doesn’t draw federal reimbursement. It costs $72 million a year.

There’s lots more on the table, such as hospice care (about $89 million); adult dental care ($51 million); durable medical services and supplies such as wheelchairs and ventilators ($150 million); adult speech, hearing and language therapy ($411,000); podiatric services ($5.8 million); bariatric surgery ($8.4 million); group psychotherapy for nursing home residents ($14 million); even therapy for refugees who were torture victims in their native countries ($133,000).

All of that still doesn’t come close to $2.7 billion. That’s why there’s a 6 percent cut for hospitals and nursing homes in play. Savings: $550 million. Hospitals argue that the state should exhaust other options before trimming providers, who are already reimbursed at low rates. But providers likely will feel some pain. “Everybody,” the governor says, “will take a haircut.”

* And Alex Brill of the American Enterprise Institute has a couple of smallish proposals…

Recent research suggests that instead of arbitrarily reducing access to prescriptions, policies focused on improving adherence — that is, ensuring that patients take their prescriptions as prescribed without missing doses — hold more promise for cost savings. A study conducted by economist William Encinosa and colleagues has demonstrated how increasing adherence among diabetes patients can reduce hospitalization rates and save on health-care costs. Another study, by Dr. Michael Sokol and colleagues, examined adherence among high cholesterol and hypertension patients, in addition to those with diabetes and found similar results. New techniques and technologies have been shown to effectively improve prescription drug adherence. Private insurers have particularly strong incentives to coordinate care in this way, as is the case for Medicaid managed care organizations that include pharmacy services.

In addition to saving money by reducing hospitalizations, another option the state could consider is ensuring that Medicaid patients receive the lowest-cost version of a given prescription drug. Research I have conducted on wasteful spending in the Medicaid drug program found that all too often states reimburse for a version of a drug that is more costly than another product with the exact same active ingredient, dose, form and bottle size. I estimate that the Medicaid drug program wasted $329 million nationwide in 2009. In Illinois, taxpayers could have saved about $11 million if the cheapest version of a given pharmaceutical had been consistently dispensed.