McWherter was moved to action by a common enough dilemma: the cost of providing health care for the poor was growing at a rate of 15 percent per-year. It threatened to bankrupt the state, and it seemed there was nothing he could do about it – Medicaid, the health-care program for the poor, is federally mandated. States have to contribute. Tennessee contributed $3 billion in 1993, six times as much as it did in 1987. The insanity of this situation was compounded by a single, glaring statistic: the cost of providing health care for the state’s 250,000 public employees actually declined last year by 1.2 percent. And so Finance Commissioner David Manning proposed an elegant solution: why not treat the poor the same as state employees?
Because this is America, and the politics of health insurance can get very weird very quickly. Tennessee state employees, since 1988, have gotten their coverage through a “managed care” plan. This limits their choice of doctors a bit and rewards preventive care – the kind of system Hillary Clinton, Jim Cooper . . . and even most Republicans expect will be the way of the future. Medicaid, by contrast, is the way of the past: those eligible people on welfare, mostly – can, theoretically, go to any doctor they want. The trouble is most doctors don’t want to take them. What’s more, many poor people don’t know when or how to see a doctor (and live self-destructive lives besides). They wind up in hospital emergency rooms, which is inefficient, unhealthy and fabulously expensive. They don’t get much preventive care. Their children aren’t immunized. Poor pregnant women don’t get prenatal care or advice – and give birth to significantly more unhealthy babies than the rest of the public. A “managed care” system, where every poor person would be assigned a family doctor (who’d make sure the kids got their shots, and their moms learned some rudiments of nutrition and hygiene) could save money, clear out emergency rooms and provide better care. In Tennessee, David Manning estimated that so much money would be saved that the state would be able to extend coverage to the working poor – 500,000 people who don’t have health insurance now.
But to do that he had to get permission from the federal government: a “waiver” from Medicaid rules. It was near impossible to get such a waiver until Bill Clinton became president. No one is quite sure why, but most experts think it had something to do with the nature of the beast – federal bureaucrats aren’t big on relinquishing control – and also with Henry Waxman, the congressman from West Los Angeles and, until recently, America’s unofficial Medicaid czar. Henry Waxman doesn’t like “managed care.” “Waxman reflects the traditional view of the advocacy community,” says Gordon Bonnyman of Tennessee Legal Services. Advocates think “managed care” segregates the poor and denies them choices (as opposed to Medicaid, which segregates the poor, denies them choices, provides lousy care and is ruinously expensive).
“Most of the national advocacy community wonder what I’ve been smoking,” says Bonnyman, who decided to support McWherter’s plan (it’s called TennCare). “But the governor built in real protections for the poor. There are “withhold’ provisions, which mean the doctors don’t get paid in full if they don’t do things like immunize all the kids on their lists. And they’re not segregating people my clients get their care from the same plan as the governor.”
Which means that doctors are now the only people up in arms over TennCare: their options have been reduced. If they want to treat state employees, they now have to treat poor people too. Also, they say, the per capita rate of reimbursement is insufficient. “Yeah, well, [the doctors] give you unshirted hell one week and sign up with the plan the next,” says McWherter. “I don’t care if they call me a few names.”
TennCare was introduced on Jan. 1. It is too early to say how it’s working. The state has been deluged with phone calls – 8,000 calls in one hour to a hot line – from confused people. McWherter worked the phones himself for the first eight days. “It’s amazing how many people don’t know the difference between Medicare [which covers the elderly and is unaffected by this plan] and Medicaid,” the governor says. More troubling, a baby died in Jackson, Tenn., when its mother was, allegedly, denied care by a local hospital. That case is being investigated by the Feds; indeed, TennCare is under intense federal scrutiny. Many other states are now interested in getting waivers and moving to managed care. There are rumors – denied by administration sources – that the Clintons are not pleased by this development and may shut the waiver process down. “To the extent that the states forge ahead” and deal successfully with the most explosive aspect of health-care costs, says Alicia Pelrine, who helps states with the Medicaid waiver process, “it does tend to look like less of a crisis now, doesn’t it?”
