TennCare’s Collapse and Its Lessons for Labs

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HOW MANY OF YOU HAVE HEARD ABOUT THE IMPENDING COLLAPSE of TennCare, the radical Medicaid experiment launched by Tennessee in 1994? It now consumes one-third of the Tennessee state budget and Governor Phil Bredesen announced that the program will probably be ended. It is likely that Tennessee will reinstate a standard Medicaid program.

I believe TennCare is a major healthcare story. It frames the upcoming Congressional battles on Social Security and Medicare reform proposals. On one hand, employers who pay health benefits and consumers now aggressively question the quality of healthcare and the inability of hospitals and physicians to control costs. On the other hand, a group of intellectuals want healthcare to be a “public good.” They want to create a healthcare system which offers equal access and equal quality to all.

That’s why I believe the collapse of TennCare as a Medicaid managed care experiment is relevant. As I understand it, it was crafted to conform with most of the now infamous Hillarycare proposals of the first Clinton administration. That would be logical, since then-Vice President Al Gore has close connections with Tennessee and its political establishment.

If it is true that TennCare was structured to conform with the fundamental elements of the Hillarycare proposals, then its failure is of even greater significance. Tennessee’s experiment with this healthcare delivery system model is a real-world test. It can educate us about the downstream consequences of this philosophical and operational model for healthcare.

Laboratories and pathology group practices will be greatly impacted by any type of deep reforms to the existing healthcare system. That is why the debate on how to reform healthcare in general, and government-funded healthcare programs specifically, should get wide play in the laboratory press. I, for one, would like to see a detailed and objective analysis of why the TennCare health scheme failed in such a spectacular manner.

However, because it was born of political decisions ten years ago, I don’t think comprehensive coverage of TennCare’s failings will be widely reported by print or broadcast media. For my part, I consider TennCare’s impending collapse as a first-round event. Both the Medicare and Medicaid programs face intractable problems which will inevitably force lawmakers to soon enact extensive reforms.


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