The Texas Hospital Association testified before the Senate Finance Committee’s Workgroup on Feb. 3 to discuss healthcare costs, specifically, the financing environment in which hospitals operate and initiatives they are investing in to reduce costs and improve healthcare quality.
John Hawkins, senior vice president of governmental relations at THA, represented the organization while presenting his case to to the SFC, chaired by Sen. Charles Schwerner (R-Georgetown).
“Texas hospitals understand the state’s challenge of stretching limited revenue to cover growing budget needs,” Hawkins said in a statement. “Every day, Texas hospitals face the need to serve more patients, invest in the workforce and grow services to meet a growing population. Yet, financing and reimbursement often is insufficient to cover these costs.”
Hawkins’ testimony emphasized Texas Medicaid’s cost growth. While Hawkins described it as “well managed and cost effective,” mostly because of the state’s 1115 waiver and use of managed care, Medicaid’s growth is estimated to be only 6 percent over the biennium, compared with double digit increases for other state-funded healthcare programs.
According to THA, more Texas hospitals are seeking increased Medicaid reimbursement rates that more closely approximate the costs of delivering care. Currently, Texas reimbursement rates cover about 58 percent of costs; meanwhile, the total cost of care that is not paid for at hospitals, including Medicaid, is more than $7 billion.
Hawkins emphasized federal funding cuts imposed on hospitals, including those in the Affordable Care Act and ongoing Medicare sequestration.
Hawkins said hospitals themselves are committed to reducing healthcare costs, using THA as an example. He described several initiatives started by THA to reduce costs and improve the Hospital Improvement Innovation Network.
D CEO Healthcare has reached out to THA and Hawkins for comment but has not heard back yet.