A fiscal reality check

A fiscal reality check

A common refrain among state House leaders is that Gov. John Bel Edwards is not looking hard enough at spending when confronting the state’s fiscal problems. But that’s largely Washington D.C.-style rhetoric, says Stephanie Riegel with the Baton Rouge Business Report.

Number of the Day

62 - Percentage of Americans who believe government does not provide enough help to poor people, while 64 percent believe government provides too much help to wealthy people.  (Source: Pew Research Center)

A common refrain among state House leaders is that Gov. John Bel Edwards is not looking hard enough at spending when confronting the state’s fiscal problems. But that’s largely Washington D.C.-style rhetoric, says Stephanie Riegel with the Baton Rouge Business Report. In reality, House Republicans have had several years to identify and cut excess spending from the budget, and have yet to do so.

It’s a problem of spending, not revenue, they keep saying. In an era where Fox & Friends passes as a trusted source of daily news by an alarming percentage of the so-called educated public, it’s really not surprising that mantra would stick. The problem is it’s not true. … If there’s so much waste in the general fund, why haven’t lawmakers suggested cuts? The governor’s critics say it’s not their job. They’re just playing political games, betting Louisianans are either too ignorant, disinterested or blindly partisan to care.

The Advocate’s editorial board is similarly exasperated, and unimpressed with the “budget reforms” offered by House leaders that do nothing to address the cliff.

The House leaders have dawdled as temporary budget-balancing taxes passed in 2016 are set to expire, leaving state government in a world of hurt financially by July 1. Instead of specifics, matching the governor’s proposals in scope if not in detail, the GOP leadership’s letter to the governor offered various process-oriented ideas, not all of which are bad. But none of them give an honest and direct answer to the prevailing question: How will you fund government? Not in the long future, but today?

A new LBP blog by Jeanie Donovan offers a succinct overview of how the state arrived at its current fiscal reality and the potential costs of inaction by the Legislature.

 

Medicaid co-pays are useless

House Speaker Taylor Barras delivered a letter to Gov. John Bel Edwards on Tuesday that included a list of “budget control” measures. One of the proposals includes charging a copayment to Medicaid beneficiaries who go the emergency room, if their medical issue is deemed a non-emergency. This recycled idea was considered by the Legislature in 2016 and has been analyzed by public health experts at Johns Hopkins University; both groups concluded that Medicaid copays for emergency room visits are a good idea in concept but not in reality. LSU’s Ryan Noonan and Kaylee Poche in the Daily Advertiser:

The problem with copays is that you’re going to end up asking a hospital to chase down an $8 or $9 bill,” said Kirk Talbot, R-River Ridge. “You’re going to hurt the hospitals, and it’s not fair for them to have to take this hit. … A Johns Hopkins study published in 2015 suggested that requiring copays does not reduce the frequency of emergency room visits. The study compared eight states that impose copays for non-urgent emergency room visits and 10 states that do not from 2001 through 2010. It found that there was no significant difference in the usage of the emergency rooms by Medicaid participants in states with copays than in states without them.

Meanwhile, the District of Columbia is exploring ways to curb non-emergency use of the emergency room that actually work. NPR’s Selena Simmons-Duffin reports:

“It’s still early days for telemedicine, but there are lots of reasons to believe that establishing the kind of relationship between a patient and provider and having that continuity of care will ultimately reduce some of the non-emergent visits to the E.R.,” she says. …The managed care organizations get incentives from the city if they reduce ER overuse. And the D.C. council is considering legislation that would expand reimbursement for these types of visits. “We’re very supportive of the fact that our [managed care organization] partners are testing these innovations and looking at these pilots so we can have an understanding of what’s really going to work for district residents,” Holve says.

 

Big pharma in Louisiana

Despite President Donald Trump’s claim that reigning in drug prices is a major priority for his administration, the federal government seems unable to overcome the massive power and influence of the deep pocketed pharmaceutical lobby. Hearing the concerns of their constituents, state lawmakers in Louisiana and elsewhere have decided to take matters into their own hands. In the 2016 and 2017, Louisiana legislators brought bills to increase transparency in prescription drug prices, only to hit a wall created by “big pharma” money. Jay Hancock and Shefali Luthra with Kaiser Health News write:

Pharmaceutical Research and Manufacturers of America, the powerful trade group known as PhRMA, donated directly to more lawmakers in Louisiana than in any other state in 2016, a new IRS filing shows. When discussion of the measure reached its peak last year, the industry hired a lobbyist for every two legislators. PhRMA spent thousands entertaining lawmakers at Baton Rouge venues such as Mike Anderson’s Seafood, specializing in shrimp-and-crab gumbo, and the Mestizo Restaurant, home of the Daredevil Margarita, lobbying records show. “I’ve been in the legislature 10 years. I’ve never in my life seen that kind of effort,” said Kirk Talbot, a Republican who sponsored the bill in the Louisiana House.

 

Supporting women in work

Increasing labor force participation rates among women in the U.S. could close the “skills gap,” boost economic growth and reduce child poverty rates, according to a new piece by Eleanor Krause and Richard Reeves of The Brookings Institution.

Education levels among women who are not employed are higher than for men. Half of the women who are not in paid work have at least some higher education. … So employer complaints of skill shortages might be quelled if some of these well-educated women joined the workforce. Women may also have more of the so-called “soft skills” that employers say are in short supply, and fewer problems like drug addiction.

In order to get more women into the workforce, we must address their logistical barriers to work:

The lack of paid family leave and adequate childcare supports are unique to the U.S., and can explain a substantial portion of the decline in female participation rates compared to other advanced economies. Low wages might also play a role – over 90 percent of “homemakers” who are not working (the vast majority of whom are female) contend that they would be willing and able to work if it paid just 10 percent more than their previous job.

 

Number of the Day

62Percentage of Americans who believe government does not provide enough help to poor people, while 64 percent believe government provides too much help to wealthy people.  (Source: Pew Research Center)