Tennessee is in the midst of a health care crisis.
TennCare covers approximately 20 percent of residents — or roughly 1.4 million Tennesseans — and those Tennesseans should be bracing themselves for a radical change to the coverage we provide to our Medicaid-eligible residents. Gov. Bill Lee’s plans to make Tennessee the first state on the block-grant bandwagon will drive significant adjustments to how medical care is administered and paid for.
The governor’s block-grant plans for TennCare seem grounded in financial practicality. If we are to believe the numbers the administration touts, it appears that the state has routinely provided medical care at a lower cost than what was projected. Under the block-grant proposal, any funds not spent at the end of the year would then be split 50-50 between the state and the federal government.
The state estimates that Tennessee would have gotten $1 billion in additional funding last year if we had been operating under a Medicaid block grant. A $1 billion “dividend” is nothing to sneeze at in a state budget of $37.5 billion in FY 2018-19 and a TennCare annual budget of $12 billion.
But we should be cautious with the concept of a block grant. Primarily, will the allure of a substantial financial dividend have significant adverse outcomes in the quality, and quantity, of care?
It reminds me of the lowest-bid proposals prevalent in the construction industry. If a company is willing to gamble that it can reduce costs and improve efficiency to the point that it can recoup half of the allotted money that goes unused, it may incentivize contractors to cut costs by whatever means possible (subpar materials, cheapest labor they can find). We hear about it every day.
Without strong quality oversight in the form of inspections and building codes enforced by municipal and state laws, construction practices would certainly see more sub-standard work. We work hard to make sure that doesn’t happen in the road-building, residential and commercial construction industries. We certainly don’t want to see it happen in the medical industry, where lives are at stake.
Major industry groups are split on whether they approve or oppose the plan, but none have said it is without risk. The Tennessee Justice Center recently likened it to using Tennessee children as “guinea pigs” in a risky experiment. Others caution that the risks are high and that the federal government may very well not settle for such a high split of the profits.
We are also missing the point of the larger debate on health care. A block grant, if it works as it is proposed, could very well bring savings to Tennessee. That’s good news. But the state has already said that the savings will not be applied to widen the eligibility requirements for health care coverage. If it does so in the future, it would be years down the road, if ever. That’s the bad news.
According to U.S. Census data, Tennessee is consistently one of the poorest-performing states when it comes to the number of residents with health care coverage. So it seems we are conducting an experiment already: How many Tennesseans can we have without any health insurance coverage before we see major declines in overall health and life-expectancy rates?
Medical treatment for just one major illness or accident can easily bankrupt a family without health insurance. And that can be any family — not just the ones with lower income levels. We have way too many uninsured Tennesseans who are one heart attack, one hospital-acquired staph infection or one cancer diagnosis away from disaster. Their financial security is at risk. Their health is at risk. Their lives are at risk.
The governor’s desire to be the first state with a Medicaid block grant does do one thing we should mind carefully — it highlights the fact that we need affordable health care coverage for everyone, from the neediest to the wealthiest of Tennesseans. That is the true crisis.
Bill Freeman
Bill Freeman is the owner of FW Publishing, the publishing company that produces the Nashville Scene, Nfocus, the Nashville Post and Home Page Media Group in Williamson County.
