By State Treasurer John Kennedy

The state’s health care delivery system costs taxpayers over $7 billion a year. This is expected to grow by $7.1 billion over the next 10 years because of new federal health care legislation. In order for the state to get control of these skyrocketing costs, we must start asking hard questions about health care in our state. Some things to consider include:

What is the future of the Charity Hospital System?

The current system cash flows only because of the $1 billion in disproportionate share payments we get to treat the uninsured. These payments will disappear under the new federal health care law.

What can we do about the annual 900,000 taxpayer-funded ER visits for non-emergencies? It costs five times more to treat a patient in the ER; the state must figure out how to reserve ER’s for emergency care only.

How can we reform the Medicaid Preferred Pharmaceutical Drug List? Eliminating less effective but more expensive drugs could save $100 million a year.

How can we cut $252 million in annual Medicaid administrative costs by 1/3? Louisiana hospitals are doing it; the state can as well.

Why isn’t Louisiana implementing the “Baby Bill” and LaHIPP? Through these programs, the state could save $100 million by paying for private insurance for eligible Medicaid recipients when it is cheaper than enrolling them in Medicaid.

Why isn’t the state reviewing Medicaid hospital admissions? The Legislative Auditor found that 80 percent of the 218,784 Medicaid inpatient admissions in 2009 were not reviewed to see if they were necessary. Taxpayers spent $900 million in 2009 for Medicaid hospitalizations.

These are just some questions that need answers as we work toward long-term health care solutions. Other things to consider include prioritizing services and cutting Medicaid transportation costs. There is no right answer that will provide the ultimate solution to all of Louisiana’s health care woes. But, we owe it to taxpayers to have a frank discussion about the health care delivery system in our state, especially knowing what’s ahead in terms of additional costs.

Sarah Mulhearn
(225) 342-0012