Thursday, August 12, 2010

Hard health-care decisions await next governor

The Tennessee governor's race is down to two candidates. The Republican is Bill Haslam, the moderate mayor of Knoxville. The Democrat is Mike McWherter, the son of the governor who created TennCare.
The public eye is keenly focused on health-care issues. Big health-care questions will face the next governor. Let's explore three particularly prickly questions.

The first major decision will be the expansion of Medicaid. At its apex, TennCare was consuming 35 cents of each dollar in Tennessee tax revenue, including all new tax revenue.

Under national health reform, a state must continue the program at its current level and expand the program to receive new federal funds. If the program is expanded to the full breadth intended by federal law, the federal government will pay 95 percent of the expansion cost.

This expansion will bring badly needed federal money to Tennessee health-care providers. However, the new governor must decide if the voters will view Medicaid expansion as an endorsement of the highly controversial federal health reform.

The pragmatic mayor from Knoxville would appear hard-pressed to turn down this amount of federal funds for Tennessee health care. For candidate McWherter, TennCare II is family legacy. Medicaid expansion should be automatic.

Second, the new Tennessee governor must decide if Tennessee will run its own health insurance exchange or cede such to the federal government. Recently, Tennessee was one of 21 states that decided to let the federal government run its high-risk pool.

Gov. Phil Bredesen said there were too many uncertainties and preferred to let the feds own the high-risk pool issues and control.

But the health insurance exchanges offer much broader authority and responsibility. It will be difficult not to accept the state responsibility for the health insurance marketplace. However, with this responsibility comes the political reality of very unpopular subjects.

Finally, the new governor must address the highly partisan issue of tort reform. As the former governor of Vermont Howard Dean once said, "But for the trial lawyers, tort reform would be included in a national health reform package."

Tennessee is one of the few Southern states that have not passed comprehensive tort reform.

Health-care tort reform, particularly in the hard hit area of long-term care, is sure to be a major question.

Haslam has indicated a willingness to consider it. McWherter is unlikely to do so.

The new governor also will have to face the fact that health care is a major cost for Tennessee state government.

Medicaid amounts to approximately 25 percent of the state budget, and state employees' health benefits cost another 5 percent.

Gov. Bredesen came into office from a career in health-care management.

Neither Haslam nor McWherter has this background. With nearly 30 percent of state tax revenues being absorbed in health care, the next governor will need to quickly balance intense political emotions with enormous financial consequences.

Dick Cowart is chairman of the Health Law and Public Policy departments of the Baker Donelson law firm, and he is a past president of the American Health Lawyers Association. He can be reached at

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