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Jindal needs to do what it takes to reform health care

The most important thing that Louisiana can do as it stares down a large budget deficit is to reform its provision of indigent health care. While some prepare to address that, others want a continuance of the old ways that threaten the state’s very fiscal health.

Let’s review representative spokesmen in this policy struggle. Department of Health and Hospitals Secretary Alan Levine has argued that in 2009 the Legislature needs to clarify the legislation passed under Democrat dominance in the Legislature and pushed by Democrat former Gov. Kathleen Blanco that tinkered with the existing system. That basically put the state on the hook to pay whatever it was billed that appeared to conform to law, with no real effort to induce efficiency into the system, but, because the state is so involved in health care by direct provision of it through its outmoded charity hospital system, it didn’t really care since the federal government would pay for so much.

The problem is, to a lesser extent the state must match these payments and as Levine as made clear current rates of consumption are unsustainable. The 2007 legislation created a “medical home” concept that would assign the indigent to facilities (many state-run) but that would continue a fee-for-service billing. Levine and his boss Republican Gov. Bobby Jindal did an end run around that introducing a coordinated care regime that would allow only indirect billing by providers by routing everything through administrators of insurance-like plans, who because they must report to shareholders of some kind would have far more incentives to hold down costs, thus potential revenues to the providers. House Speaker Jim Tucker appears sympathetic with his desire to have his members meet with the apparent agenda of selling this idea.

Carrying the water for the current vested interests in the existing system is Democrat state Sen. Joe McPherson, who has interests in nursing homes which make the vast majority of their money off of government. Under the planned regime it would force more efficiency onto institutional providers meaning they must improve their performances and probably would steer business away from them to more community-based solutions. This they do not want because it means more work and fewer revenues. McPherson and his gang want less specificity in the law because then it gives them more freedom to reject what Jindal wants to do and to force their own, static “solution” onto the problem which would not be close to what is needed to improve care and control costs.

But Jindal, if he has resolve, has the upper hand in this contest precisely because of the looming budget shortfall. With a Republican House he probably can expect approval there of legislation steering the state onto the coordinated care track. The Senate, where McPherson plants himself, with 24 of 39 senators being Democrats is another matter. In normal times, it might be tough to move enough Democrats onto Jindal’s side. However, the huge deficit permits Jindal the chance to identify and make severe cuts to programs favored by potential opponents of the overhaul, with the perfectly legitimate rationale of the big deficit, with the ultimate weapon of a line item veto. Enough of those threats, and the nattering nabobs of negativity like McPherson will be cornered into submission.

Today was announced a minor victory for the state, the rebuilding of the Medical Center of Louisiana – New Orleans hospital (“Big Charity”) in tandem with a Veterans Administration hospital that will bring significant cost savings to the state (the proposed structure still might be a little grandiose for state needs and taxpayers’ sufferance, but it seems better than the original Blanco plan that favored the continued inefficient institutional focus of the state’s health care). Hopefully, Jindal will continue on this tack and do what is necessary to get the single most important reform to state policy into law as quickly as possible.

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