Senate Finance Committee Workgroup on Healthcare Cost hears testimony from state agencies

Tags: health care, jean klewitz, 85th texas legislature, Tom Banning

By Jean Klewitz

Health care costs are back on the docket as lawmakers finish the third full week of the 85th Texas Legislature. Sen. Jane Nelson, R-Flower Mound, has convened a workgroup to come up with ways to control rising health care costs for state programs and that group met for the first time on Friday, Feb. 3, hearing testimony from state agencies and a variety of stakeholders for more than six hours.

Orthopedic surgeon and chair of the Senate Committee on Health and Human Services, Sen. Charles Schwertner, MD, R-Georgetown, presided over the seven-member panel. “Health care costs in all these programs and across all our state agencies continue to skyrocket and crowd out other priorities like education, transportation, and public safety,” he said as he opened the hearing.

With the state facing a budget shortfall of about $6 billion for the next two years, the workgroup will focus on health costs in Health and Human Services, which includes Medicaid, the Employees Retirement System, the Teachers Retirement System, and the Correctional Managed Care system. They intend to incentivize better quality of care, determine universal strategies that address quality and cost, and identify ways to use data more effectively to monitor costs and trends across all programs.

“Obviously, we have our work cut out for us, and it is important work,” Schwertner said.

The hearing came on the heels of the release of a report from the Texas Comptroller’s office, which says state health expenditures grew by nearly 20 percent from 2011 to 2015. “In fiscal 2015, Texas spent $42.9 billion on health care, representing 43.1 percent of all state appropriations,” according to a statement accompanying the report.

In their testimony at the hearing, representatives from state agencies expressed many factors driving health cost inflation, including prescription drug prices, the influence of state contractors, free-standing ERs, benefits provided for spouses of state employees, and the cost of employees who retire before they are eligible for Medicare. With each agency, the panel discussed addressing inflation through benefit design, narrow provider networks, and value-based incentives.

None of this will be new for family physicians across Texas who experience the strain of escalating health costs and the implementation of various strategies to contain those costs, but the prospect of a group of Senate Finance members dedicated to examining these problems early in the session holds some promise. “The task before this workgroup is perhaps one of the most critical long-term problems the state must address,” TAFP CEO/EVP Tom Banning says.

“We’re fortunate that the senators who have been selected to serve in the workgroup bring a wealth of knowledge and experience. The Academy looks forward to working with them to find cost effective ways to manage the state’s health care programs.”

The workgroup will now begin drafting their proposals and as they progress, we’ll keep you posted. Stay tuned for more.



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