TennCare: What Happened
Part of the story those who favor some sort of government run health care repeat is that private health care is very costly. They point to the costs incurred by the U.S. compared to other countries such as Canada, the U.K., etc. They note that the U.S. pays much more per person but supposedly gets lower health care outcomes (measured rather dubiously via things like life expectancy).
The problem I have with this narrative, aside from the rather dubious reliance simply on published cost figures from these governments and the reliance on statistics like life expectancy, is the idea that government is suddenly going to be more efficient than the private sector. Government’s primary job is the creation of “red tape”. The idea that we can actually switch to the government and get less costs strains credulity past the breaking point.
Case in point: TennCare. TennCare is Tennessee’s attempt to expand health care to people who did not have health care. According to Wikipedia, TennCare moved 1.3 million people into its system including 500,000 people with pre-existing conditions. TennCare was to utilize managed care organizations to keep costs low while at the same time providing quality care. And for a few years it seemed to work. Costs declined, and more people were covered. Then costs started rising…and rising quickly. Governor Bredesen brought in an outside consulting firm to look at TennCare and its ballooning budget. They pronounced TennCare unsustainable and pointed out that unless something was done the program would consume up to 90% of the State’s budget. (Hmmmm, gee sounds like I’ve heard something like this before…) And keep in mind that a big part of the costs would be picked up by the Federal government.
The solution to this was to…limit access. Gee, where ever have I heard this before? Limits were put on the number of doctor’s visits, the number of prescriptions, and 160,000 people were moved out of TennCare (what happened to them, beats me).
So what happened? Government stepped in and costs spiraled out of control so much that it threatened to consume nearly the entire budget for the State. Benefits had to be rationed and/or reduced and no new enrollment. Where are the cost savings that were supposed to have materialized and made everything, if not wonderful, at least better?