Tennessee Republicans Unveil Health Care Plan Focusing On ‘Free-Market Concepts’

Republicans in the General Assembly say they want to increase competition between hospitals and make prices more transparent. As part of a new health care plan outlined Thursday, they’re also proposing restrictions on pharmacy middlemen.

GOP lawmakers characterize these as “free-market concepts” intended to reshape health care.

“This is a Republican plan that goes to the philosophy of what Republicans are, which is less government, more empowerment to the people, to the patients. And a way to try to lower prices,” Rep. Cameron Sexton of Crossville said.

Targeting Certificates Of Need

Republicans propose using
insurance claims data that Tennessee has been
collecting for a decade to create a price-comparison tool like
New Hampshire and
Arkansas have.

GOP lawmakers also want to overhaul regulations for hospital construction and expansion, known as Certificate of Need. Some states, like Texas, have no CON law, and the Trump Administration has
advocated for repeal of such regulations. They’re often
accused of stifling competition.

It’s meant to make sure hospitals don’t only build in wealthy suburbs or flood one area with more services than the population can support.

The
bills range from ending CON altogether to simply exempting home care agencies and satellite emergency rooms. But Sexton says the legislation,
including his, will likely be amended throughout the session.

Pharmacy Roles Under Scrutiny

Legislators also are inspecting pharmacy-benefits managers, a role that negotiates between pharmacies and health plans. PBMs have been
blamed for much of the run-up in drug prices. Lawmakers want the state to at least audit their processes, which involve a complicated system of rebates.

One proposal from Sen. Shane Reeves of Murfreesboro, a pharmacist himself, would end all state-funded PBMs.

Hospitals and parts of the pharmaceutical industry will likely resist some of the proposals. The Tennessee Hospital Association opposes an outright repeal of CON laws, and CEO Craig Becker dismisses claims that deregulating the industry would be good for competition, especially in rural areas where hospitals are closing.

“To think that we need more rural hospitals right now, what we need to do is buttress up the ones that are so financially strapped they’re at risk of closing,” he says.

But, he says, “we’re willing to look at anything and talk.”

Democrats, however, say most of the bills associated with the so-called CARE plan — “Consumerism, increasing Access, improving Rural health systems and Empowering patients” — are recycled concepts with broad support.

“It’s really just an acronym, some buzz words, a few non-controversial policy ideas and a fig leaf to hide the failure to expand Medicaid in the state,” Sen. Jeff Yarbro of Nashville said.

Republicans are working to convert Tennessee’s Medicaid program into a “block grant,” which would give the state more flexibility and potentially allow more people to be covered. But there’s been no appetite among legislative leaders or Gov. Bill Lee’s administration to accept federal money under Obamacare to expand Medicaid to cover the working poor.