TennCare Savings from Reforms that the Governor refuses to implement

We must demand that these reforms are more important than his political career

Lives of people are more important than the Governor's position.

See Briefing Paper, Lack of Health Insurance

  1. Drug Utilization Review - $50 MILLION:
    Control drug overuse and abuse using academic institutions already capable of identifying overuse and bad prescribing patterns of doctors. (1,2,3,4,6)
  2. Home Health Care support - $45 MILLION:
    There are a minimum of 2,000 people in nursing homes that could be receiving care at home providing a savings over $22,000 per person per year. (6)
  3. Generics When Equally Effective - $100 MILLION:
    Requiring the use of the least costly drugs that will effectively treat patients, not the cheapest and not only what is adequate. (2,6)
  4. Accountability of Managed Care Organizations - $90 MILLION:
    Hold Managed Care Organizations accountable and return them to reasonable financial risk, and stop the overpayments. (5,7)
  5. Disease Management - $45 MILLION:
    Managing the diseases of the 51,000 TennCare enrollees (4%) who use 47% of TennCare resources so that their health care is effective and less costly. (8,9)
  6. Re-Bid Preferred Drug List - $35 MILLION:
    Re-bidding the preferred drug list (PDL) to include behavioral health drugs, requiring supplemental rebates. (4)
  7. “SIN” Taxes - $200 MILLION:
    Introduce higher "sin" taxes to discourage the use of alcohol and tobacco. (10)
  8. Call for Federal Aid - $$$$$ MILLION:
    Call on Senators Frist and Alexander and members of the Tennessee congressional delegation to obtain federal aid. Aid is appropriate to correct the wrongfull withdrawal of federal funding that occurred in 2002 negotiations between Washington and Governor Sundquist. Such help is also needed to help TennCare through this crisis that harms the most vulnerable Tennesseans. In the past year, the following state Medicaid programs have received additional federal aid" Louisiana $774 million, Alabama $1 billion, New York 1.5 billion. (11,12,13)
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    1. See Center for Health Care Strategies, Clinical Pharmacy Management Initiative: Integrating Quality into Medicaid Cost Containment (April 2003), posted at http://www.chcs.org/usr_doc/quality_cost.pdf. By contrast, arbitrary limits and co-payments leave overuse by some patients (e.g., those using less than 6 Rx/month) untouched, while denying care to the sickest patients for whom the denied treatment is necessary and cost-effective. Such limits raise concerns about the affect on both patient safety and program costs. See S. Soumerai, ?Benefits and Risks of Increasing Restrictions on Access to High Cost Drugs in Medicaid?, Health Affairs 23: 135-146 (Jan./Feb. 2004); Centers for Medicaid and Medicare Services, The Use of Quantity Limitations in State Medicaid Prescription Drug Programs, (Jan. 2002), posted at http://www.chcs.org/publications3960/publications_show.htm?doc_id=214935 Goldman, et al., ?Pharmacy Benefits and the Use of Drugs by the Chronically Ill?, JAMA 2004;291; 2344-2350.
    2. See Tennessee Comptroller of the Treasury, TennCare Prescription Drug Costs, pp. 18-19 (Dec. 2002) (available at http://www.comptroller.state.tn.us/orea/reports/tenncaredrug1202.pdf )
    3. See BlueCross BlueShield of Tennessee, White Paper: Rx for Pharmacy Costs in Tennessee (August 2003), http://www.bcbst.com/about/affordability/docs/papers/TN_drug_cost.pdf and Tennessee Comptroller of the Treasury, Prescription Drug Costs in Tennessee (November 2002). (available at http://www.comptroller.state.tn.us/orea/reports/tcdrugfinal.pdf)
    4. The new TennCare reform proposals would deal with behavioral health drugs far more aggressively with far greater risk for beneficiaries than simply adding them to the PDL. The state would simply cover whichever drug is the cheapest, without the careful balancing of medical efficacy versus cost that goes into selection of drugs for inclusion in the PDL. The proposed approach is too narrow, because the cheapest behavioral health drug is not necessarily as effective as newer, more expensive drugs for the same condition. Taking short cuts on effectiveness of medication can cost more in terms of psychiatric hospitalization. See H. Huskamp, Managing Psychotropic Drug Costs: Will Formularies Work?, Health Affairs 22: 84-96 (Sept./Oct. 2003).There are currently no controls on what behavioral health drugs can be prescribed, and costs have risen 35% since 2000. TennCare will spend $520 million, of which $180 million is state funds, on behavioral drugs in 2004. Adding behavioral health drugs to the PDL (also recommended by McKinsey and Company in February), and using the same careful selection process that was used last year for medical drugs would yield savings conservatively estimated in the range of $35 million in state funds.[
    5. See McKinsey & Company, Achieving a Critical Mission in Difficult Times- Illustrative Strategic Options for TennCare, Part 2, p. 44
    6. Centers for Medicare and Medicaid Services, Safe and Effective Approaches to Lowering State Prescription Drug Costs: Best Practices Among State Medicaid Drug Programs (September 9, 2004).
    7. Testimony of J.D. Hickey in Rosen. v. Goetz, March 2005.
    8. See McKinsey & Company, Achieving a Critical Mission in Difficult Times – Illustrative Strategic Options for TennCare, Part 2, p. 29 (Feb. 2004) These subgroups are generally chronically ill, with the same patients accounting for most of TennCare’s costs from one year to the next. This subgroup includes about 150,000 patients who have five or more chronic illnesses.
    9. See McKinsey & Company, Achieving a Critical Mission in Difficult Times – Illustrative Strategic Options for TennCare, Part 2, p. 32-35
    10. See Senator Steve Cohen’s Bill for Cigarette Tax increase. (Roughly increasing per pack of cigarettes by .40 cents)
    11. See Times-Picayune, “$774 million in Medicaid approved: Decision averts ‘catastrophe,’ Breaux says”, April 21, 2004.
    12. See Birmingham News, “Medicaid chief says huge increase needed”, December 28, 2004.
    13. See Kaiser Daily Health Policy Report, “HHS Agrees to Give New York More Medicaid Funds if it Implements Changes to Program”, March 17, 2005.