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The Keckley Report

Healthcare is a Migraine for Governors

By July 17, 2017March 1st, 2023No Comments

As the suspense builds in DC about Republican efforts to Repeal and Replace the Affordable Care Act, it is inevitable that states will play a larger role in health reform. The Senate’s Better Care Reconciliation Act and House’ American Health Care both include significant cuts to Medicaid funding and a shifting of responsibility for the individual insurance market to states. The outcome of these bills is anyone’s guess, leaving Governors and their staffs in limbo.

But regardless of the outcome of this legislation, healthcare will be a huge headache for Governors going forward. It’s one third of their budgets and increasing faster than any other category except for transportation. It touches every citizen and provokes voters to the ballot box. And the scope of state responsibility for healthcare is daunting:

·       States oversee licensing and set scope of practice parameters for healthcare professionals—nurses, physicians, pharmacists et al. And this also includes determining who qualifies as a medical professional and who’s a quack!

·       States oversee public health programs including immunizations, disease detection and emergency preparedness. They administer budgets, define eligibility and facilitate accessibility for specific under-served, at risk and low-income populations. And they own substance abuse interdiction which including the opioid addiction epidemic that’s killing 91 daily. And to make matters worse, FY18 budget proposals cut the CDC’s funding by 12% adding more pressure on state disease surveillance efforts.

·       States determine whether medical negligence is pursued, prosecuted and reparations addressed in concert with federal guidelines and regulations i.e. the False Claims Act and others.

·       In addition to running the Medicaid program which consumes 29% of the average state’s expense, states manage workers compensation, Children’s Health Insurance, prisoners, state employees and retirees and many programs under authorization of federal authorities.

·       States decide how retail pharmacies operate, how much medical care they can provide and the limits of retail clinic interaction with patients.

·       And the responsibilities delegated to state control in the Affordable Care Act are voluminous– oversight of insurance premium increase requests, management of insurance marketplaces for individuals and small employers, assuring access to a well-trained healthcare workforce, development of expanded primary care services and management of Medicaid top the long list. The legislation currently pending in Congress does not repeal the significant expansion of state healthcare oversight set forth in the ACA.

I have a number of friends who are Governors and several who are considering or have announced their intent to run for their state’s highest office. Each believes they can make a difference. All believe the states are where the action is in the grand scheme of governing and public service. And a couple see it as a stepping stone to higher office.

I admire their ambition and share with them the view that all signs point to the states as the front line for the major social challenges we face, including healthcare.

Governors face voters every day. Classroom sizes and teacher pay, higher education and workforce development, fixing bridges and potholes, running state parks and managing roadways, homeland and cyber security and a laundry list of equally important issues clog their calendars. Knowing how the health system operates, how insurance works, how providers diagnose, treat and deliver services, how drugs and devices do what they promise, how health and human services programs intersect and how to pay for everything goes with the job description. Most Governors consider their appointments in health and human services, insurance and public health their most important.

Every stakeholder in healthcare thinks regulation is intrusive and funding inadequate: our special interests are prominent and effective in influence peddling. That pressure is strongly at the state level via PAC contributions and advocacy efforts they orchestrate. And most citizens don’t understand the system of the matrix of state and federal regulations that guide its functioning: they know how it impacts their pocketbooks and what they see in their communities. That’s why few would-be Governors run on a platform of fixing the health system—it’s risky business, regardless of the political bent of the state’s electorate. In the 36 contests for Governor in the 2018 cycle, it’s likely voters will want answers to complicated questions not easily answered in soundbites.

Looking ahead, it’s clear states aren’t waiting on the federal government to fix healthcare. They are developing novel solutions to opioid addiction, reducing drug costs, overseeing Medicaid managed care, standardizing quality and cost transparency data for consumers, improving access to primary care and integrating digital technologies into care coordination programs. They’re not waiting on Congress to act.

But none of the governors—Blue or Red—is declaring victory. All are concerned that a national health policy addresses the reality they see every day—uneven access, variable quality and unsustainable costs. All want more latitude to innovate. None wants federal mandates that are unreasonable. And all recognize funding cuts at the federal level mean the potential for red ink at the state level. That’s the clear message coming from last week’s meeting of the National Governors Association.

For Governors, healthcare is a headache. They know a strong healthcare system means jobs and economic stability. They also know it’s expensive: only 33 states are currently on track to hit their revenue forecast this year, so unexpected cost spikes for healthcare could de-stabilize state budgets that are still recovering from the 2007-2010 downturn.

It’s anyone’s guess what Congress will do in coming weeks. For Governors, it’s a migraine that won’t go away.


P.S. Senator McCain’s unexpected eye surgery (craniotomy) means the Senate is not expected to vote on the Better Care Reconciliation Act until next week or possibly later. And the CBO has delayed its score until later this week. Stay tuned. But promoters of the BCRA are pushing hard with interesting but somewhat suspect assertions. For example, on Fox’ Sunday Morning Futures yesterday, HHS Secretary Tom Price, a clinician, offered that “a third of the physicians in the country ought to be caring for these individuals (Medicaid enrollees) and they’re not…due to the (Obamacare) system” in defending cuts to Medicaid included in the Batter Care Coordination Act. It seems implausible to most that a 26% cut in Medicaid funding, a centerpiece in the BCRA, will translate to increased access to physicians by enrollees. Go figure.