by Rob Roper
Governor Peter Shumlin has repeatedly noted that when it comes to health care reform, government has “gotten it wrong every single time.” One reason, he has said for this is that other plans, including our own Catamount failure, did not place a focus on cost control. And, this time, we’re going to put “really smart people” in charge. But, how is what we are proposing here in Vermont really all that different at heart than what other states have tried and failed to do? If the best way to learn is from other people’s mistakes, it is worth taking a look at the goals and realities of other state healthcare reform efforts and the… must we presume “dimwits”?… who ran them.
The Tennessee Health Care Reform Effort
The government has to do “something” about healthcare in Vermont because, as House Speaker Shap Smith (D-Morrisville) stated at the beginning of the legislative session, “The status quo is broken.” Dec 27 BFP. How often did we hear that line in its various forms over the ensuing five months?
But is “something” always better than nothing? Could we really make matters any worse than they are? Ask the folks in Tennessee about TennCare, for whom this logic also prevailed.
TennCare was a revolutionary (dare I use the word “historic”) healthcare reform effort launched in 1994. The intention behind the law was to “solve two components of one of [Tennessee’s] biggest problems: access to affordable health care and a Medicaid budget that was fast consuming the largest portion of the state budget (Wikipedia).”
The solution was a plan to replace the Medicaid fee-for-service payment method with a managed care model, and for this the state received the first ever Medicaid waiver from the federal government. The money saved as a result of the new efficiencies would be used to cover Tennesseans who were previously uninsured or could not get insurance due to preexisting conditions.
If this sounds familiar it’s because it’s awfully similar to The Hsiao Report’s, “The system management structure will need to identify how savings can best be reinvested to expand coverage for Vermonters…” It’s the age-old, politically effective, but mathematically impossible, promise: We can save money while covering more people by creating efficiencies in the system. It is the same promise Shumlin, Smith & Campbell are making with Green Mountain Care.
So, how did it work out for Tennessee?
According to two Tennessee members of congress, Marsha Blackburn and Phil Roe, “The result was a program that nearly bankrupted the state, reduced the quality of care, and collapsed under its own weight.” (RealClearPolitics)
Wikipedia tallies the numbers, “The total annual budget for TennCare increased from $2.64 billion in 1994 to more than $8.5 billion in fiscal year 2005, with essentially no change in the number of participants enrolled.” Ultimately, the program consumed a third of the entire state budget, while six percent of the population remained uncovered.
Comparatively speaking, the numbers look even worse, “While inflation-adjusted per capita Medicaid spending across the rest of the states increased an average of 71 percent between 1994 and 2004, the corresponding increase in spending on TennCare was 146 percent. (Heritage)
But, were the people in Tennessee better off health-wise for all of this? An analysis by the Heritage Foundation studied mortality rates in Tennessee before and after TennCare’s implementation and concluded, “Instead of improving health care quality, the mortality data indicates that TennCare may have resulted in a decline in the quality of care for Tennesseans. The evidence certainly suggests that health outcomes in Tennessee did not improve after TennCare.” (Heritage)
Finally, in 2005, a new governor elected with the specific mandate to fix the program and save the state from impending insolvency did what was necessary. Governor. Bredesen, declaring TennCare “a disaster,” immediately kicked 170,000 people off the program – a number that would increase to 350,000 in the ensuing years.
Even with this dramatic purge of enrollees, Governor Bredesen said, “The way I look at it, I basically bought the state a decade.” (The Tennessean) The problems initiated by a state that “had to do something” and did it – badly – are still a threat to Tennessee’s fiscal and physical health.