Thursday, March 28, 2013

Gov Haslam: A Tennessee Plan for Health Reform

Remarks to the General Assembly March 27, 2013

I appreciate the opportunity to speak this morning.

I’m well aware this is an extremely busytime, and I’m grateful for the opportunity to come before you today. It is the first time I’ve asked to do this outside of the State of the State, but I asked for this opportunity because…

There is no more important issue, or more complex issue facing our country and our state today than healthcare, and I wanted to update you about where we are regarding Medicaid expansion.This may look like a simple decision. On one side, people think how could we not accept federal money to expand Medicaid to cover more Tennesseans and on the other, why in the world would we accept funds tied to ObamaCare knowing the federal government can’t pay for it? But it isn’t that easy.

Let me start by saying there are two basic reasons I don’t like ObamaCare.

The first is cost. Regardless of whether we decide to cover any additional people through the Act, Obamacare will cost the state of Tennessee almost two billion dollars over the next eight years.I want to be clear –That is our additional cost regardless of whether or not we cover any new enrollees.

Secondly, and maybe even more important than not addressing cost, it doesn’t address the real issues of health reform - users and payers not being aligned and providers and payers not being in alignment.

When you go to the grocery store, there is a shopper, a product and the store. The shopper knows what the store charges for each item and pays for those items.With health care, shoppers go to the store, pick out whatever they like - sometimes with a representative of the store suggesting additional items - and then going to check out knowing tha tsomeone else will pay the bill. Governor Bredesen made this comparison in his book, Fresh Medicine.

The shopper also rarely knows what the store is charging. Only in health care do we buy something without first knowing the cost. On the provider side, providers are paid based on a fee for each service or product, not on the outcome of care. Market tension is what controls cost and promotes quality. There is no market tension when you buy or sell health care goods and services.

To me, the scandal of the Affordable Care Act is that it doesn’t significantly address cost or alignment reform.

Earlier this year, I committed to providing some clarity around our Medicaid expansion decision prior to the end of March. And just a few minutes ago, I had the opportunity to address a joint session of the General Assembly to share where we are regarding this significant decision.

 I think we all can agree that there is no more important or complex issue facing our country and our state than health care. Health care costs and the entitlement programs that cost our federal and state government so much money are on an unsustainable path. For example, regardless of whether we decide to cover any additional people through Obamacare, the Act will cost Tennesseans almost $2 billion over the next eight years. I shared with the General Assembly this morning that Tennessee will not expand TennCare rolls under the Affordable Care Act, but will instead work to leverage the available federal dollars to pursue real health care reform.

Tennessee has shown the nation how to produce true reform in education, based on students’ results and educational outcome. We’re beginning to do the same thing with reforming government service – again by measuring outcome and results rather than just years of service as a state employee. I believe Tennessee can also be a model for what true health care reform looks like, so we've been working toward a different plan: A Tennessee Plan for Health Reform.

The "Tennessee Plan" would take on the critical issue of aligning incentives among users, payers and providers of health care. Specifically, the plan would:

  • Leverage available federal dollars to purchase private health insurance for Tennesseans up to 138 percent of the federal poverty level who don’t have access to health insurance, which would translate to 175,000 more insured Tennesseans;

  • Allow co-pays for those who can afford to pay something;

  • Include a definitive circuit-breaker or sunset that could only be renewed with the General Assembly’s approval;

  • And reform the payment structure for providers so they are compensated for health outcomes, not just based on services performed. 

  • To succeed, we need cooperation and assurances from the Department of Health and Human Services. At this point, we cannot get those assurances so I cannot recommend to the General Assembly that we move forward on this plan until we have more clarity and cooperation. Our upcoming budget amendment will not include language to accept these federal funds.

    I’ll continue to pursue a vision for a healthier Tennessee with access to health care but at a lower cost for our state and our country. It is my hope that we can provide quality health care for more Tennesseans while transforming the relationship among health care users, providers and payers. If Tennessee can do that, we all win.

    I appreciate your support and look forward to hearing your thoughts on this important issue.

    – Bill

    My Comment: Some are already denouncing Gov. Haslam as turning his back on his constituents and sneaking in Obamacare through the back door. As far as I can tell, this is a good plan.  We are all going to pay higher taxes and higher insurance premiums to finance Obamacare. Why should we refuse the federal dollars that could return to Tennessee if it will not burden the state?  I think the governor was right in rejecting an expansion and medicaid which could financially hard the state, but a voucher plan is different. A healthcare voucher could work much the same way that food stamps or education vouchers or Section 8 housing voucher's work.  There would be much less bureaucracy  and overhead in a voucher system than in medicaid.  Government would not fix prices that could be charged for services with a voucher system.  If we can get a waiver from the federal government to approve the Tennessee Plan, then I think we will have achieved a victory.  I commend Governor Haslam for proposing a market-friendly alternative to Medicaid expansion.

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