TennCare proposals may not be enough to affect costs

Actual hospital stays, outpatient procedures and doctor’s visits were below the governor’s recommended annual limits, according to an analysis of how enrollees handled by BlueCross BlueShield of Tennessee used TennCare from November 2002 to October 2003.

Laboratory tests and X-rays ordered was the only category where enrollees exceeded the proposed limits, according to BlueCross. The planned restriction for those services is 10 a year, while enrollees averaged 11 in the BlueCross sample.

BlueCross is the largest insurer in the TennCare network. The company serves about 44 percent of TennCare’s 1.3 million enrollees.

Information for the entire TennCare system was not available to The Tennessean.

BlueCross data showed that 23,928 people spent at least one day in the hospital, with an average utilization rate of 5.17 days per person. Bredesen’s limit is 45 days a year.

Dave Goetz, the state finance commissioner who oversees TennCare, said the limits are necessary to control costs among small groups of enrollees who use the most services. People with heart disease, injuries, cancer, lung and other respiratory diseases, and other chronic diseases are among these groups.

“Those people entail a lot of the costs, and you want to construct a limit that’s reasonable for what most people need but (that) controls high utilization,” Goetz said.

Consultant McKinsey & Co. recently performed a complete analysis of TennCare for Bredesen and the state’s health care industry. Its report showed 15 percent of TennCare’s enrollees represent 75 percent of its cost.

Benefit limits on Bredesen’s targeted areas would apply to about a third of TennCare’s population, the group Bredesen calls “able-bodied adults.” Children, pregnant women and enrollees with disabilities were exempted from most limits.

In the BlueCross sample, about 43 percent were exempt and would not face limits. There are few limits currently in TennCare, and Bredesen must receive federal approval to implement any restrictions.

Bredesen likens TennCare’s spiraling costs to a grocery store trip.

“Everything on the shelves is available, as much of it as you want, nothing is off limits. At the checkout counter, the total is rung up, but you never see it,” he said. “The bill is just sent to someone else who pays it for you. You’d spend a lot more than you do right now. That’s the way TennCare works today.”

BlueCross is one of eight managed-care organizations in TennCare covering enrollees in Middle Tennessee. The data provide a good idea of what is happening in Tennessee, TennCare spokeswoman Marilyn Elam said.

The proposed annual limits would have little effect on the averages for enrollees in BlueCross who used TennCare services. For example:

— Proposed 45 hospital days; BlueCross average, 5.17.

— Proposed eight outpatient visits; BlueCross average, 2.76.

— Proposed 10 physician visits; BlueCross average, 7.61.

— Proposed 10 lab tests or X-rays; BlueCross average, 11.08.

Bredesen’s proposed limits are more generous in some cases compared to other states and more restrictive in others. Hospital stays in Mississippi are limited to 30 days a year and 16 days in Alabama, the McKinsey report showed.

Mississippi allows 12 doctor visits annually, while Alabama gives 14. Alabama allows 20 lab visits and four X-rays a year, and North Carolina allows 24 but includes them as physician visits.

TennCare patients need better managed care, Goetz said, which is why the governor’s plan includes initiatives for improved care and disease management. One of Bredesen’s highlights in this category is technology pioneered at Vanderbilt University that electronically maintains patient records and prompts doctors to use the best practices.

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On the Net:
TennCare Bureau: http://www.state.tn.us/tenncare