Monday, May 11, 2015

Monday, May 11, 2015

Health care on the chopping block; Spotlight on business tax breaks; Next up for House: Where to cut? and; An epidemic of unnecessary care

Health care on the chopping block

When the Louisiana House approved $664 million in new revenue last week, the news was greeted warmly by higher education leaders, as legislators said the money would be used to stave off deep cuts to public colleges and universities. But the news isn’t as good for health care services, which are still at least $200 million short of what’s needed for next year. As The Advocate’s Tyler Bridges reports:

 

That not only is putting at risk a health care system that already ranks among the worst in the country but also threatens the agreements Gov. Bobby Jindal made with private companies to manage Louisiana’s public hospitals. Rupturing those deals would cause havoc with health care for poor children and their mothers, the developmentally disabled, the working poor who don’t have health insurance and the elderly living in state nursing homes — and that would cause a ripple effect throughout the entire health care system.

 

Spotlight on business tax breaks

The Lafayette Advertiser wants to know if a $2 million tax break given by the state to energy services giant Halliburton Corp., – for creating 48 new jobs – is worth the cost given Louisiana’s chronic budget woes. As Claire Taylor reports, with some help from a plucky nonprofit watchdog group:

 

Tax incentives like these have come under scrutiny in Louisiana recently as state legislators struggle to overcome a $940 million shortfall in the 2016 budget and avoid devastating cuts to higher education and health care. “As a whole, it’s clear we’ve kind of gotten off the rails on the tax credit issue,” said Jan Moller, director of the Louisiana Budget Project. “We’ve been cutting essential services year after year after year, making students pay more to go to college, ignoring infrastructure and health care while tax incentives grow.” Louisiana offers about 462 exemptions, exclusions, rebates and tax credits, State Treasurer John Kennedy said Thursday. Some have been on the books for 50, even 75 years, such as a sales tax exemption for buying antique airplanes, he said.

 

Next up for House: Where to cut?

Now that the House has agreed to raise new revenue to help balance the budget comes the next task: deciding where and how to incorporate that money into the state budget, and where to make additional cuts since the dollars are not enough to fund the state’s needs. The AP’s Melinda Deslatte looks at the difficult task facing the House Appropriations Committee, which is amending the budget bill today.

 

For now, with $670 million to put toward next year’s shortfall, Appropriations Committee Chairman Jim Fannin, R-Jonesboro, said he’ll prioritize higher education above everything else, working to keep colleges from any cuts. After that, he said, he’ll seek to offset as many health care reductions as he can. Others think the cuts should be spread more evenly. “Health care should not take the total brunt of any shortfalls,” Alario said. “I’m concerned that the poor would be left out of the equation as it stands right now.” Rep. Walt Leger, D-New Orleans, the second-ranking House member, said he would prefer a “more balanced approach” with the money distributed across the list of needs.

 

An epidemic of unnecessary care

Most of the health-care focus in Louisiana recently has been on the need to extend coverage to low-income adults using federal dollars made available through the Affordable Care Act. Opponents have countered (falsely) that expanding Medicaid would cost too much money that the state can’t afford. But what if states like Louisiana could save billions of dollars by simply not paying for health care services that are unnecessary – and in many cases even harmful? The New Yorker’s invaluable Atul Gawande looks at the epidemic of unnecessary care in a lengthy, thought-provoking article that is worth the reader’s time.

 

In just a single year, the researchers reported, twenty-five to forty-two per cent of Medicare patients received at least one of the twenty-six useless tests and treatments. Could pointless medical care really be that widespread? Six years ago, I wrote an article for this magazine, titled “The Cost Conundrum,” which explored the problem of unnecessary care in McAllen, Texas, a community with some of the highest per-capita costs for Medicare in the nation. But was McAllen an anomaly or did it represent an emerging norm? In 2010, the Institute of Medicine issued a report stating that waste accounted for thirty per cent of health-care spending, or some seven hundred and fifty billion dollars a year, which was more than our nation’s entire budget for K-12 education. The report found that higher prices, administrative expenses, and fraud accounted for almost half of this waste. Bigger than any of those, however, was the amount spent on unnecessary health-care services. Now a far more detailed study confirmed that such waste was pervasive.

 

Number of the Day

$17,598,614 – Value of tax breaks given to companies in the Lafayette region to various companies that created a total of 884 new jobs (Source: Lafayette Advertiser)