In Bid For Federal Healthcare Dollars, Tennessee Governor Eyes Outcome-Based Pay For Doctors

Asked when Haslam might finish a deal with Washington, the governor said, "We’re talking now. We talk all the time. In terms of a final conclusion I don’t have a sense on that. We’re literally in a back-and-forth, and it’s a process." Credit: TN Photo Services

Asked when Haslam might finish a deal with Washington, the governor said, “We’re talking now. We talk all the time. In terms of a final conclusion I don’t have a sense on that. We’re literally in a back-and-forth, and it’s a process.” Credit: TN Photo Services

Governor Bill Haslam says meetings and calls are ongoing as he tries to wrangle a deal channeling new federal healthcare dollars to Tennessee.

Haslam wants the money to buy private insurance for thousands of the state’s working poor.  A major hurdle to win Washington over will be showing a private plan can cover people as cost-effectively as expanding Medicaid would.  Haslam says it’s doable – and it may mean reworking how doctors are paid.

Haslam argues if Tennessee can use extra federal money for private insurance instead of a Medicaid expansion, more doctors might be willing to accept poor patients.

“One of the issues you have with Medicaid coverage right now is a lot of doctors don’t accept it because they don’t get reimbursed at their rate.  What we’re trying to do is go back to the providers and say ‘if folks had this coverage, would you then work with us on outcome-based healthcare.’”

The federal Affordable Care Act already nudges the industry to focus on the quality of treatment, rather than quantity.  But this pay-for-performance approach is still in its infancy.  It’s far from certain it could scale up to a statewide plan within the next few years – or yield the kind of savings Haslam would need to make it work.

Click below to hear raw audio from Haslam discussing the expansion, or downoad it here.

Backed By Hospital Association

Calling the idea “out of the box,” Tennessee Hospital Association President Craig Becker says “if we’re ever going to break the back of healthcare cost, we’re going to have to look at everything we can.”

Asked whether it’s possible paying for quality instead of quantity can yield enough savings, Becker answered:

“I think early on it won’t be, but in the long term it certainly will be.  In the experience of most of these pilot programs that have gone on out there, you start out trying to learn and figure your way to get there.  But by the time two or three years go by you get pretty good at it, and you figure out ways to make it work.  You have to make sure that it doesn’t go like the early TennCare program did, which was the hospitals and other providers were getting 40 cents on the dollar of their cost.  There’s just no way you can do that.  But if it’s somewhere even close to (the cost), it’s doable.”

Becker acknowledged it will take some wrangling to get insurers on board, but says many recognize the current system is unsustainable, leading to a give-and-take.   “That’s where it’ll probably get very interesting,” he says.

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