Highlight on Louisiana: Treasurer Kennedy Gives the Lowdown on Health Care Spending in the Bayou

Louisiana Treasurer John Kennedy recently discussed the state employee health insurance program, state budgetary practices, state healthcare costs and what some consider “the lack of a healthcare funding plan and the state’s dependency upon the Obama administration to approve hospital privatization funding.” The entire  interview was conducted in a Google Hangout session. According to Kennedy, healthcare spending is the number one issue, and Louisiana needs to do some “wholesale reform in our healthcare delivery system.” Although the state has adjusted its spending, Kennedy believes those adjustments haven’t really solved the problem.

Louisiana has been using taxpayer money in the state savings accounts to fund the state’s health insurance program. It’s self-insured for health insurance, with retirees and employees paying in, with a state match. Approximately a year ago, the fund had five hundred million in it, but Kennedy predicts that if spending continues the way it is now, “in short order, it will be down to zero.” The state has spent” more than its taking in and trying to fill the hole by cutting higher education and spending all of the money.”

Currently, Louisiana is waiting for CMS to approve the state’s Medicaid plan, and its that plan or no plan. Kennedy indicated that negotiations between Louisiana’s Department of Health and Hospitals and the federal government over the plan. A recent Associated Press article reports that the Medicaid proposal, which analyzed the current performance of private managed-care networks handling Medicaid services, may have included “mathematical errors and inconsistencies” and used primarily self-reported data from the managed-care organizations that “the department didn’t appear to verify.” According to the auditors, “The report included global assertions about Bayou Health cost savings and improved outcomes … but support was not provided for these assertions.”

Louisiana Governor Bobby Jindal privatized much of the state Medicaid program in 2012, by shifting two-thirds of its patients to the insurance model. CMS wanted “details of whether the privatization delivered the improved health outcomes and cost savings that the Jindal administration promised for the multibillion-dollar Medicaid program.”

Louisiana’s other plan to save money on health care was to privatize charity hospitals. Kennedy believes that the quality of care is better now, but that Louisiana hasn’t yet realized the savings it had hoped for. So far, Kennedy said, “we haven’t saved any money, in fact, we’ve spend more than we were spending.”