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DHH Secretary on Healthcare Cuts: It's All About Efficiency

Dept. of Health and Hospitals

Almost $83 million in cuts to healthcare programs and services went into effect Friday to shore up a mid-year deficit in the state budget. These are separate from a previous round of cuts made in July.

The latest round of reductions includes cuts to services for at-risk children and low-income moms, as well as a one percent drop in the rate paid to hospitals and physicians for non-primary Medicaid services. 


WESTERMAN: So in this fiscal situation, after the cuts Friday, would any further cuts have to fall on actual services again?

SECRETARY OF HEALTH AND HOSPITALS BRUCE GREENSTEIN: We don’t foresee any additionally reductions this fiscal year.

WESTERMAN: Can I just get some clarification because I think there was a little bit of confusion on the cuts to Hospice. I know they were staved off but is this a permanent thing or have the cuts just been kicked down the road?

GREENSTEIN: We’re refocusing the program to deliver, with more flexibility, services in the community which is where many people associate Hospice in their mind. My grandmother passed away last year, Hospice in the home and it worked very well and I was very happy that we had that. But when we are putting Hospice in institutions we’re duplicating many of the same services, and we don’t have the money to pay twice for anything in healthcare as you know. So, we’re reforming that program. It’s going to come back stronger than it is today and we’re continuing services for everyone that’s on it right now.

WESTERMAN: Let’s go a little further into the actual decision-making process when it comes to deciding which programs to cut. Can you go a little more into that?

GREENSTEIN: As a department we work closely with all the heads of the agencies, with analysts, with budget analysts, with service and program managers. And we look at where our programs have changed over time, where we don’t see effectiveness or efficiency and where we’re doing duplicative services. And the idea is to, first of all, eliminate all the duplication. It’s to eliminate services that aren’t yielding value or outcomes. But most importantly, we brought programs offline where we’re delivering services in a more efficient way in another program and that’s really what lead most of our thinking.

WESTERMAN: Finally, Governor Bobby Jindal wrote an op-ed for the Washington Post, as you very well may know. And in it he said he says when it comes to Medicaid, states should have the flexibility to set eligibility standards, he promotes individual ownership in healthcare decisions and he want to lower overall costs. Since Louisiana has opted not to expand Medicaid under the Affordable Care Act, what would Jindal’s plan look like if implemented here in Louisiana?

GREENSTEIN: So we think about Medicaid with three essential ingredients. That first one is around simplified eligibility, and by that we talk about instead of having 26 eligibility categories, we would pin it on income and we would have people pay a reasonable amount for a premium and cost-sharing. The second is around products. There doesn’t need to be a whole Medicaid market. People should have the ability to use what we would otherwise spend and let individuals and families shop for another product on the market, rather than tying their hands to something that’s Medicaid-ized. The third piece is around the way the state gets reimbursed from the federal government. Just like individuals with no co-pay, states don’t have as much of an incentive to create savings over and above, to take risks in terms of launching programs that yield benefits that those benefits can then be reinvested into the program.

That’s something that we'd like to see. We'd like to see something that manages the program overtime and that returns back to states a share of those savings so the state can reinvest in the future. Despite a very long bill, the Affordable Care Act, there’s nothing that’s meaningful in terms of reforming the Medicaid program in that bill.