Governor Budgets for Health

The General Assembly is reportedly almost done with its own version of the state budget and this even before the first day of the legislative session tomorrow. With legislators having one foot out the back door before they've even managed to climb up the front stoop, looking for major change in today's release of Governor Easley's budget is a little like looking for Senator Elizabeth Dole to actually appear in public – in North Carolina that is. Actually, it's not quite that bad, as the Governor turns in a budget with some solid numbers for health despite a couple missteps and some problems that are really out of his control. My quick first reactions:

The Governor does budget for anticipated growth in NC Health Choice, finding an additional $10 million to help enroll another 10,000 or so kids. Do the math – that's the best $83 a month you could ever spend on a child. This is doubly important as tough economic times increase, causing many families to lose the insurance coverage they have through their jobs.

Smart savings come from delaying the start of the NC Kids Care deep-discount health insurance program. The Governor and General Assembly passed this sliding-scale premium health plan last year to help some families who don't qualify for NC Health Choice. Due to actions by President Bush, aided and abetted by Senators Dole and Burr, we don't have the federal money we thought we would have to start things up. Look for that to change next year with change in Washington.

Smart savings #2 – trying to get more savings from specialty drugs (Easley estimates $4 million in savings). It's a far cry from big pharma's bête noir of NC joining the Consumer Reports project www.crbestbuydrugs.org and saving millions in public dollars, but it does dig more at the underpinnings of a major health cost driver – drug prices.

Smart savings #3 – it's a quality of care increase too. Easley recommends expanding NC's award-winning Community Care of NC care management program to low-income folks who are older, blind, or disabled. Not only do we save money (Easley estimates $24 million in savings) but we also deliver higher quality healthcare. This is a win for everyone.

Major misstep – cutting provider fees in Medicaid. If you don't want to cut people off of Medicaid health coverage or drastically reduce major benefits – like hospitalization – there is only one other easy place to save money and that's reduce what you pay doctors and other providers. Easley anticipates $42 million in savings here and it just shouldn't be done. I'm not a shill for our out-of-control medical system, but to really save money in Medicaid, we have to save money in the entire health system and not just in the public part. Things are so tight in our health system that reducing money for public programs just means charges go up for private health plans and individuals – it's like squeezing a balloon.

Biggest misstep – increasing the cigarette tax by 20 cents. Give me a break. We've only known since dinosaurs roamed the land where the Legislative Office Building now sits that any rise in the price of a pack of smokes of less than 10% has no effect whatsoever on getting people to quit. Otherwise, it's just a tax on smokers, God bless them, and has no beneficial health effects. Here's a novel suggestion – raise the cigarette tax by $1. Then put the several hundred million you generate into first guaranteeing an affordable health plan with sliding scale premiums for every child in NC, eliminating the provider fee cut above, and a tax rebate targeted at people who've just lost their jobs. We stop thousands of kids from starting to smoke and we generate more money besides.

Despite those two major quibbles, overall this budget is a solid effort from the Governor in a year when major change is taking a backseat to political speed racers with heavy feet.


  1. Max

    May 12, 2008 at 3:52 pm

  2. Louie

    May 13, 2008 at 3:37 pm

    just read a new book “Overtreated: Why Too Much Medicine Is Making Us Sicker and Poorer” by Shannon Brownlee. Makes you wonder if “experts” and “providers” are giving us the most ‘health’ for the buck with our tax and premium dollars. Isnt the US still behind Costa Rica in life expectancy?

  3. […] Searing likes most of the Governor’s healthcare budget. (Should we be surprised?) Some of his comments on […]

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