Down on Medicaid? Consider the lift for the Texas economy:editorial / comment on and Pitts

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Down on Medicaid? Consider the lift for the Texas economy

Posted Friday, Nov. 19, 2010,  Star-Telegram

By Schnurman

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The idea of Texas dropping Medicaid makes a good sound bite, if you're selling a book or burnishing your conservative credentials. But as a public policy proposal, it's a nonstarter. No state, not even Texas, would walk away from $15 billion in federal funds to treat its most needy residents, three-quarters of whom are children. Texas' budget problems would explode -- or be shifted to local governments and their taxpayers. So if the Medicaid threat is just political posturing, what's the harm? It takes our eye off the prize, the economic opportunity that's emerging now and set to explode in the second half of the decade. As the law stands, billions of healthcare dollars are coming this way, by far the most of any state. Even if the law is revised before its full implementation in 2014, it's hard to imagine an alternative that would not expand coverage significantly. One way or another, Texas' healthcare sector is on the cusp of a phenomenal growth spurt. Our leaders should be developing a strategy to leverage that bounty and snare even more federal dollars. With Austin's coordination, the state could convene task forces to make sure we get the most from the money; bring together hospitals, doctors and universities to develop the necessary work force; and promote our best practices at home and in Washington. Leaders in economic development, information systems and marketing could make a difference in attracting funds and delivering better outcomes. Do we prefer to outsource that work to other states or the federal government? Gov. Rick and Republicans may not like the changes coming with healthcare and Medicaid, but Texas stands to gain much more than it loses. An estimated 2 million uninsured residents, including 600,000 kids, will be covered by the expansion of Medicaid alone, and the federal government will pay for most of it. In this decade, Texas will put up an additional $5.8 billion for its share of a larger Medicaid program, according to estimates from the Texas Health and Human Services Commission. But over the same time, the state will receive $76.3 billion in new federal funds. That's a federal match of 13 to 1. If this were an economic development project -- a defense contract, a corporate relocation, a central city plan to move a river -- it would be a slam dunk for Texas. And unlike the usual corporate payola, such as the governor's enterprise fund, the state's contribution doesn't underwrite shareholders or CEO bonuses. It pays hospitals, doctors, nurses and labs -- Texas health providers, serving Texans. " It's the deal of the century, " said Enrique ez-Vidal, director of the State Coverage Initiatives, which advises states on improving healthcare. " Texas is going to get a net windfall from this bill, and it's a huge opportunity to address the uninsured and cost of care. We encourage states to look at this as a chance to further their own policy goals. " The healthcare law is not a jobs bill. It's primarily aimed at extending coverage to more people and finding ways to curb medical costs and improve quality. But the state will have to add doctors, nurses and facilities to handle the larger caseload. It will need marketing pros to boost enrollment and computer systems to process more claims. And 3.2 million more uninsured Texans are expected to get private insurance by 2014, which will also drive demand for jobs. Again, federal funds will offset much of the cost; state residents will get $43.5 billion in premium subsidies later this decade, according to a report by the Texas comptroller. That's a ton of federal money slated to flow into Texas to pay for additional healthcare services. The dollar projections vary, depending on how many people are expected to enroll. The Kaiser Commission on Medicaid and the Uninsured offers two scenarios for Texas, ranging from $53 billion to $62 billion in federal funds by 2019. The Texas Health and Human Services Commission puts the number at $76 billion, assuming that more than 90 percent of eligible people will sign up for Medicaid. Texas will easily lead the nation in collecting new federal Medicaid funds, because it has so many uninsured and has such strict limits on eligibility. California, next on the list, is projected to get $7 billion less than Texas, according to Kaiser. But it will pay $2 billion more, which is 44 percent more than Texas. That's why healthcare reform is such a bargain for this state. People can criticize an expansive federal government, but as the law is currently designed, Texas wins big. And the beneficiaries are its residents and medical providers. hasn't recognized this opportunity publicly. He hasn't talked about how to get the biggest bang in public health and job creation. Instead, he's floating the notion of states opting out of Medicaid. On a recent tour to promote his anti-Washington book, Fed Up, he said Texas could do better with private insurance. But the state has a dismal record of ensuring healthcare for the poor and uninsured. Then Texas Rep. Warren Chisum, R-Pampa, who's campaigning for House speaker, declared Medicaid was bankrupting the state. " We need to get out of it, " he told The Texas Tribune. " And with the budget shortfall we're anticipating, we may have to act this year. " Medicaid costs are rising in Texas, primarily because the number of enrollees increased almost 21 percent in the two years, a result of the weak economy. Healthcare reform has not added to that expense so far, although federal stimulus funds helped the states close the gap. In a 2003 study, economist Ray man estimated that federal funding of Medicaid accounted for 284,000 permanent jobs in Texas. Since then, the annual federal outlay has more than doubled in Texas, and it's going to soar with the 2014 expansion. As millions of Texans get health coverage, demand will spike for providers and facilities. Because Medicaid pays low reimbursements, Texas may have to recruit more doctors and offer incentives so more patients can get treatment. Fort Worth gives tax breaks to developers for using local workers and committing a share of their apartments to low-income families. Why not use economic development approaches in healthcare, the one sector destined to grow? The JPS Health Network and Cook Children's Medical Center are finding innovative ways to reach more low-income patients, establish medical homes and reduce emergency room visits. JPS also operates 18 health centers in schools, treating 47,000 walk-in students last year. Texas should build on such programs, for the benefit of its residents and economy. Washington is offering $11 billion for pilot projects in community health and billions more to promote school-based health centers, preventive care, home visits, primary care medicine and more. At the moment, politicians may be more interested in scoring publicity points, but Texas needs to get into this game soon. No state has more to gain. Schnurman's column appears Sundays and Wednesdays.

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