NASHVILLE — Given the collapse of Republican efforts to repeal the Affordable Care Act, Tennessee Gov. Bill Haslam hopes Washington will turn its attention to a longer- term health policy issue he says has been largely ignored in the past.
That is making health care actually more affordable by finding ways to rein in perennially soaring costs in an industry that accounts for one sixth of the national economy and even has its own special rate of inflation.
"I have a really strong opinion there," the Republican governor told reporters earlier this week. "I think it's time to look at the piece of the Affordable Care Act that got left out to begin with. The ACA was always supposed to do two things: Increase the number of people who have coverage. No. 2, make health care more affordable."
But, Haslam said, the second piece of that never happened.
"If you look at what we're spending, the federal budget 20 years ago for health care was 20 percent," the governor said. "Well, today it's 30 percent — are we going to let that keep going? In Tennessee, you all have seen what happened to TennCare. We're going to let that keep going?"
Haslam's comments came after last week's U.S. Senate meltdown in which GOP leaders and Republican President Donald Trump saw their effort to repeal the Affordable Care Act, widely known as Obamacare, fail in a 49-51 procedural vote, despite the GOP's 52-member majority.
An angry Trump has since railed over the failure, saying he wants to "let Obamacare implode" and last weekend threatened to stop paying cost-sharing subsidies to insurance companies that help lower the out-of-pocket expenses for low-income policyholders.
Senate Health Committee Chairman Lamar Alexander, R-Tenn., on Tuesday urged Trump to avoid that. Alexander also announced his panel will hold bipartisan health care hearings in September to determine how to keep the individual market from collapsing, affecting millions of lower-income people across Tennessee and the rest of the U.S.
And on Wednesday, the National Governors Association's Health and Human Services Committee, led by Virginia Gov. Terry McAuliffe, a Democrat, and Massachusetts Gov. Charlie Baker, a Republican, urged both Trump and Congress not to engage in the cost- sharing reductions within individual health insurance marketplaces.
Haslam Press Secretary Jennifer Donnals said her boss agrees.
"Insurers in the individual market in Tennessee have exited at alarming rates because of the fragility of the market," Donnals said. "Without cost- sharing reduction funding, the market will struggle to stabilize and we will see higher premiums and additional insurers exiting the individual marketplace."
Speaking with reporters here earlier in the week about his long-term health care cost concerns, Haslam said, "Republicans, Democrats, everybody should agree, health care costs can't keep going like this. And let's attack that side of the problem."
Asked whether that might include steps toward government cost controls, Haslam dismissed the notion that American health care is a market-driven area in any real sense.
"We live in this weird world where people say we need to have a market-driven health care system. We don't have a market-driven health care system. It's the one thing that not that many people pay for themselves."
Because employers or government wind up stepping in with financial support to a large extent for most Americans' health coverage, Haslam said, "you don't have a true market-driven system. So I think you're going to have to think about what are the things we are comfortable doing in terms of controlling health care costs."
Asked for examples, Haslam pointed to his administration's move to pay providers in TennCare, the state's version of Medicaid, based on procedures and outcomes of a medical issue and creating alternative payment mechanisms aimed at helping contain costs.
TennCare officials describe it as an "episodes of care" approach in which the state and major health insurers are moving away from "paying for volume" to "paying for value," with providers rewarded for positive health outcomes. It also contains financial penalties when standards aren't up to expectations.
"We're going to have to do a lot of things like that to take a very different approach," Haslam said.
Last fall, the state's TennCare Bureau reported cost savings with the new alternative payment system to contain costs. But the program has generated concerns from providers over measurements.
Earlier this year, the Tennessee Medical Association, which represents physicians, helped persuade the administration to delay expanding the penalty provisions in the value-based healthcare payment model from TennCare into commercial health insurance plans that provide coverage for public employees.
Haslam, meanwhile, also pointed to pharmaceutical costs as a major cost factor, noting that if "you look at what drives TennCare, a lot of it is pharmacy increases." That often derives from innovation, but there's a "good news, bad news" component there, the governor said.
"They come up with a new drug to treat Hepatitis C; that's great news," the governor noted. "The bad news is it's $85,000 per regimen. So we're going to have to decide how we're going to address situations like that."
Contact Andy Sher at firstname.lastname@example.org or 615-255-0550. Follow him on Twitter @AndySher1.