PRACTICE AND POLICY LECTURE SERIES JAN 2011 – THE ECONOMICS OF HEALTH CARE REFORM

Connie, thank you very much and welcome all of you brave souls to the ice and to Oklahoma for the out-of-staters.  I usually have, you know, a number of one-liners to get things warmed up.  For some reason, the one that jumped off of the page today when I first discovered it, it was kind of funny.  I am not sure it is as funny anymore, and it was on a list of things of benefits that go along with being gray-haired and up in years, and the one item that jumped off of the page was it is great to be at this point in life when all of those health insurance premiums I paid all of these years are starting to pay off.

(audience laughs) 

Now, I will let you decide whether that is still a funny line, given the topic of today's conversation.  I would add that several months ago, Connie, when I agreed to do this, who would have thought that health reform would be such a controversial topic.  I usually maintain a very low profile, but having committed to being here, and it is a serious topic, and I am delighted to have a chance to visit with you about the economics of healthcare and healthcare reform. 

 The first thing, just to kind of set some baseline, I think it is important to put healthcare in the context of the larger economy and to first look at that to recognize what is not just significant but what a major player healthcare is in both our nation and our state's economy.  It is big in terms of both public budgets in both of those worlds.  It is also very large in terms of its relative situation within the gross economic production.  In fact, healthcare today makes up 17.3% of the nation's Gross Domestic Product with total expenditures of $2.5 trillion at the national level.  To bring that
closer to home, it is estimated that in Oklahoma, total health expenditures are now running about
$25 billion, so you just turn the "T" to a "B".  It is a typical 1% rule.  If you haven't discovered that, it is a way to really to a quick analysis of almost every statistic you can think of, population included, and that is Oklahoma typically constitutes almost exactly 1% of whatever that statistic is nationally.  

In our nation, the healthcare industry employs 11.5 million people.  Again, to bring that home, 140,000 people in the state of Oklahoma, that is 9% of the total workforce in the state of Oklahoma are directly employed in the healthcare industry.  At 800+ billion dollars at the federal level for public expenditures, it is about 22% of our nation's total budget, and to bring it even closer to home for us at the Healthcare Authority in Oklahoma, the appropriated dollars supporting just the Oklahoma Healthcare Authority constitute about 14% of the total state funded budget.  

Well, so the point is, we are not tinkering around the edges of the economy here when we are talking about healthcare.  That is number 1.  Number 2 is that the position of healthcare in these economies is not a static position.  It will not remain static, even if we preserve the public policy status quo.  If we preserve the public policy, status quo, the history that we know in terms of the escalating cost, both past and present, will predictably continue in the future.  So it will continue to consume larger portions of the total economy, and those increases are dramatic and are absolutely predictable.  

The healthcare rate of increased cost is measured in multiples of the standard rate of inflation in both the state and nation's economy.  A few specific numbers close to home: The average health insurance premium in Oklahoma more than doubled in 10 years between 1998 and 2008. So it grew in excess of 100%.  The average employee only premium paid in Oklahoma increased 25% in the most recent 3 years, from 7 to 10.  It increased 25%.  Again, numbers that are multiples of anything else in the economy, and when I saw that when I wrote it down, I thought maybe except for gasoline.  Gasoline may have gone up something like that.  With that exception, I think it is safe to say it is about the only thing.  Well, the question obviously is, why?  What is going on in healthcare that drives that kind of increase?  

And of course, we don't have the rest of the afternoon to identify all of them, but there are many.  Some of them are good things.  Some reflect the higher cost of advanced technology, advanced sciences that produce new medications, new forms of treatment.  None of us would want to see that go away.  Some, perhaps, are not so positive.  But the scariest and the one we want to focus on today that has relevance to the topic of healthcare reform is the number and cost of the uninsured and the impact that has directly on the cost of healthcare.  

The fact of the matter is in Oklahoma 30%, nearly one-third of that cost increase that I just talked about, is directly attributable to the cost shift of uncompensated care that is rendered to the uninsured in our state.  It is a scary proposition, because it is that element of the cost of healthcare that is spiraling in such a way that it fuels itself, and logic is pretty easy to get to.  As those prices go up, obviously more people either decline or withdraw from insurance coverage.  As more people decline or withdraw, the number of uninsured goes up.  As the number of uninsured goes up, the cost that is incurred when those folks show up at the emergency room at the hospital and in other settings where they are not denied service, that cost has to be met in our system of healthcare delivery, and the only way that cost is met is to shift it to those who are still paying, and so the cost goes up more, and it is a self-feeding spiral.  

The single biggest reason given by the 50+ million people who are uninsured in the nation, some 600,000 in Oklahoma, for why they are not insured is increased cost.  So it contributes as the single largest reason why people are uninsured.  They simply cannot afford it, and that brings us into what is now referred to commonly as the economic death spiral that feeds itself.  

Well, could it be worse?  Could it be a worse situation than having an economic death spiral that is fueling its own path to ultimate demise?  And, unfortunately the answer is, yes it is actually worse than that.  The reason it is worse than that is that the now well-established $950 million in Oklahoma that represents the cost of that uncompensated care is $950 million that is spent in not smart ways.  

In friendly audiences, I call that dumb money.  It is not smart money.  It is money that supports a system that delivers care in ways that are not timely.  It delivers care in ways that is not efficient.  Fortunately, we have laws in this country that we are not going to just watch people die in the parking lot of the hospital so that when they arrive at that emergency room, we are compelled by law, and frankly by what is right, to meet that emergency need.  

That is probably the least efficient delivery system that we could conjure up.  There are not many screenings for high blood pressure going on in that setting.  There are not many mammographies going on in that setting.  There are not many interventions by way of either pharmacy products or surgery, frankly that are going on in that setting.  Preventive measures are not going on in that setting, and preventable conditions worsen as a result.  

As a consequence of that, the uninsured are 30-50% more likely to be hospitalized for avoidable conditions than those that are insured.   That is a staggering number, 30-50% more likely to be hospitalized for conditions that are avoidable, and on top of that, their hospitalization has a 12% higher cost per stay.  That seems to me to describe applying lots of dumb money to a system to try to care, deliver, and have access for people without insurance.  

And I mention that we do not let people die in the parking lot.  That is just too obvious and it is too in your face, and we do not let that happen.  However, the mortality rate of uninsured is 10-15% higher than those of us with insurance, so it is not literally true that people don't die as a result of lack of access, because they certainly do.  

Well, there are other factors, since we are talking about economic factors, I want to mention because I think they are obvious, and they need to be acknowledge, and that is the economics of the unhealthy.  The fact is unhealthy people miss work.  They have lower productivity.  Research over a 10-year period establish that people who are unhealthy and in the workforce are producing 12% lower earnings than their healthy counterparts. 

 That is even more staggering among minorities.  African-Americans, their earnings are 28% unhealthy employees, producing 28% less earnings than their healthy counterparts, and obviously sick children.  Sick children are not in the classroom.  Sick children have a harder time learning.  Every year when we do this unfortunate, ridiculous debate about “shall we protect education or shall we protect healthcare”, I just want to see the billboard up across the street that says, “Healthy kids learn more.”  It is just a fact.  It is just a reality, and unhealthy kids do not, and they pay for it for their entire life.  

Well, who are these uninsured? If we have 600,000 in the state of Oklahoma, and if that is at the crux of our problem, because we are spending a lot of dump money on those people, who are they?  What is this population that we need to be concerned about?  Well, 86% of the uninsured in Oklahoma are adults.  They are typically under age 35.  That sometimes surprises people.  Sixty-two percent of them are white, 12% are African-American, 12% are American-Indian.  Fifty-two percent, over half, are employed full time.  Another 12% are employed part time.  

Okay, so now if we know what is contributing to, at least in a major way, the bad economics, and we know who the folks are that we need to be dealing with, what in the world do we do about it?  Well, some have suggested that we reform it, that we fix it.  Do nothing seems to not be the appropriate response.  Now the good new is, and we can all be proud as Oklahomans, that literally Oklahoma led the way, when some 6 years ago in 2005, the legislature enacted and the Healthcare Authority carried out the development of what is now known commonly as Insure Oklahoma.  It was a program specifically targeted to the population I've just described.  It created a program that encouraged employers and made it affordable for employers to offer employer-sponsored healthcare to their modest-wage employees, and by modest-wage, we are talking about 250% of the federal poverty level.

For those of you who do not study that everyday, for a family of three, that is about $46,000.00 a year.  For a single person, that is about $27,000.00, $13.00 per hour job.  The object was to make it affordable in an employer-sponsored setting, and in addition to that, to make a product available that is administered at the Healthcare Authority for an individual plan that is available to those who do not have the opportunity to participate in an employer- sponsored plan.  If, based on current law, current law would cover all Oklahomans, working Oklahomans of 250% of federal poverty or less.

It is approved as a Medicaid expenditure, so it receives full federal participation, and those employees are employees of businesses of 250 employees or fewer.  That started out very small and has grown over time.  We would enroll in Oklahoma, if all of the people qualified took advantage of that, between 350 and 400 thousand people.  Now, that makes quite a dent in a 600,000-person problem, and that is current law in the State of Oklahoma.  It is targeted as I say for both employer-sponsored plans which are offered through commercial brokers, and it includes an individual plan which is administered by the Healthcare Authority.  

Those plans are reported on, by the way, every month, and you can find those on our website in a group of statistics we call FastFacks.  It will be interesting to track that.  We are currently at about 33,000 lives enrolled in that program, and you will recall it was funded by a dedicated tax on cigarettes, and we are about at the cap of what this cigarette tax will support.  So, we are clearly not in the position to fund those 350 to 400 thousand people at this time.  But, as a matter of public policy, that is well established in law.  We know what affordable means in Oklahoma, just because we can look at those who do choose to be insured as opposed to those who don't, and if affordability is the single largest reason why they don't, you can look at income levels and see where that falls.

When we first looked at this several years ago, it was at 250% of the federal poverty, that is why the law reflects that number.  As prices go up, of course, that means that percentage goes up, and today it is at about 300% of federal poverty.  So, we are busily spending a few dollars in Oklahoma in a way that directly responds to the problem at hand, and that is the number and growing number of uninsured.  A billion dollars is being spent on behalf of those, and we have a choice of whether to use that same billion dollars in ways that might be characterized as spending smart money in ways that make it possible for people to be covered, therefore having access to all of those screenings that we mentioned, all of the prevention, the early intervention, that saves the system dramatic money as well as offering much higher quality of life to those who are able to afford access to care. 

Well, we understand this economic impact by looking at today's program.  There is a study that is currently being completed and will be published within a few days by the economists at Oklahoma State University, and it is based on the system as it exists today in Oklahoma.  To just look at if you want to predict what the economic impact is going to be on covering additional people who are currently uninsured, one way to do that obviously is to look at what is the economic impact of the fact that we now have in Oklahoma in state fiscal year 2010 about 825,000 people covered in Sooner Care and Insure Oklahoma and what is the economic impact of that reality.  
What we know is that in order to support that program, the Healthcare Authority's budget is about $4.5 billion.  We know that 32% of that is state funds, and the balance 68% is federal.  We know that that program generated total expenditures in the Oklahoma economy beyond the expenditures of the agency itself of $11.2 billion, and the economists tell us that that created 114,808 jobs, that it generated $4.3 billion in personal income that resulted in the payment of $351.3 million in tax revenue.  Now that is a pretty aggressive economic engine.  

If Oklahoma redirected a substantial part of the 950 million dumb dollars and reinvested it in making coverage affordable for a large percentage of those uninsured, the economic impact would no doubt be similar to the economic impact of what is being covered today.  Well, that is the story in Oklahoma, and I think it is an encouraging one, and I am very proud of it.  

That legislation, by the way, was passed overwhelmingly with great bipartisan support.  This was not a partisan effort; this was something that the legislature and members on both sides of the isle said this is smart money; this is the way to do this, and the fact that it did not hurt anything, that it was a tax on tobacco, so I always, of course, have to encourage everybody to buy lots of cigarettes

(audience laughs) 

and then throw them away, because smoking them is not smart.  But, as long as people are going to smoke, then let’s turn it into a revenue.  

Well, finally and probably why most of you came here is that we have got to recognize the question, what is up with the feds?  They are playing catch up frankly.  As I mentioned, Oklahoma was out in front.  There are other states that were as well.  In many respects, what we now see as the national health reform initiative is very similar to the public policy underlying the development of the Insure Oklahoma Program.  It replaces a direct subsidy that we make.  We actually write a check to the small business owner to subsidize the cost of them making employer-sponsored insurance available.  The federal government does that through tax credits.  We write a check to subsidize the cost of the modest-wage employees in those businesses or to offer a discounted premium for those who participate in the individual plan we administer.  

The federal government chooses to do that subsidy through a refundable tax credit to the individuals that would qualify.  As a matter of direct impact on Sooner Care, the federal proposition would take about 200,000 of those 400,000 that I mentioned that Insure Oklahoma covers as a matter of policy, and it would mandate that the state do that.  Oklahoma chose voluntarily to take on Insure Oklahoma and to take on this issue.  Part of the federal government’s approach is to say to states, if you are going to have a Medicaid program, you have got to offer it to people who meet the income qualification, which by the way is significantly lower than the Insure Oklahoma, it is 133% of federal poverty, not 250% of federal poverty, so it is about a $24,000.00 annual income for a family of three, while Oklahoma, as you recall, is up at about $46,000.00.  

So the mandate is effective the first of January in the year 2014.  People react to the mandate word.  I get that part.  You know, if it is an optional program, there is a balance to strike, and here is the way that the federal government approaches this balance.  They say, “we think this is good policy, and we want everybody in every state to have access that meet this qualification,” and that supports a policy that says the states are mandated to cover this population.  

But, since funding that in the Medicaid program means in Oklahoma, you heard those numbers, it means 32% of that cost is going to be Oklahoma's cost.  The way we make that palatable for states is they enhance the federal funding of it.  In fact, in this instance, the federal government pays 100% of the cost for the first 3 years, so for those 200,000 people which are already qualified under Oklahoma's program, by the way, but now that they are mandated under the federal system, the federal government pays 100% of the cost for the first 3 years, 2014, 15, and 16.  For the next 3 years, they phase down the participation 95%, 94%, and 93%, and then finally in 2020 and beyond, it drops to the minimum of 90%.  So instead of the normal 68% in Oklahoma, it is 90% in Oklahoma.  

Well, as you can imagine, those numbers are fairly attractive.  It makes you hear many times, part of the economic impact that you've heard me describe about the current program takes into account that Oklahoma only has to put up 32% of the total.  Well in this program, in the growth of the program, under reform, the federal government assumes a much higher total.  Well, and that is not an untypical trade-off for the federal government.  Now, whether that is going to become reality, obviously we don't know.  

Is the state policy going to become reality?  Yes, it is already in the books, and it is a matter of when Oklahoma is in a position to continue to fund and grow that program.  It essentially is covering the same individuals.  I had at the door, and I just want to mention it, because we are not going to go over it, a couple of things that I touched on today are who these uninsured folks are.  There is a little single page, front and back.  I think some of you might have picked it up.  You are welcome to get it on the way out.  It goes into much greater detail on one side about who these uninsured folks are in the State of Oklahoma, and on the other is an interesting economic analysis of the impact of that mandated coverage to begin in 2014.  It shows the total state cost, the total federal cost, and the tax return on the number of jobs created, so I think you will find it interesting.  

And, I wanted to make sure we left plenty of time to just have a conversation, and I don't know.  How much time do we have? I don't have a clock?  How much is it?  Oh good!  Well,
you are either going to leave early

(audience laughter), 

or you are going to take advantage of the fact that somebody is walking around here with a microphone, and please…  You know what I would love to hear are your suggestions on where we might go from here and how we might make sense out of all of this, but I am also willing to try to answer questions.  I know we have got one right down here, and I know somebody said they were going to have a microphone.  So I will repeat
the question if you… 

(Audience member question) “I just want to see if I got it right what you said that you were talking about the 600,000 people in Oklahoma that are basically uninsured now, and you used a term, a figure of $1 billion, is that what it would take, $1 billion dollars is what it would take to cover the 600,000 who are currently uninsured?” 

(Guest speaker answer) Actually, that would cover nearly all.  It would cover probably 80-90% of them, and a billion, I use a billion dollars twice, I’ve got this habit of rounding up.  I mentioned about 950 million is the cost of the cost shift that occurs now for uncompensated care for the uninsured, and it just happens that the estimated cost of covering the vast majority of those people is also about 930 or 940 million dollars.  I round both of those up to a billion because it is easy for me to remember.

(Audience laughter)

But yes, it is both.  It is the cost of the uninsured.  It is also the cost of covering those people and providing some ability to make the insurance affordable for them.  Yes sir.  

(Audience member question) “Is benefit fraud a very prevalent issue?” 

(Guest speaker answer) You know, I appreciate you asking that question.  Any occasion of benefit fraud gets our attention, and that is why we have an enormous investment in making sure that doesn’t happen.  One nice thing about being the payer of claims, we processed last month 4.5 million claims, and it is in a system that is sophisticated enough that anything that looks wrong, you now if there is a procedure that is coming out of a certain provider, or if there is an individual consumer that’s getting paid for services in a way that doesn’t fit what the expectation is, that shows up very quickly.  

And, we have a very good way, the short answer is, we don't have a problem with consumer or member abuse of the program.  One of the things that we track obviously is, for example, pharmacies.  You can imagine.  There are segments of our population that abuse pharmacy products.  That shows up very quickly in our system.  And one of the ways we have to deal with that is called the lock-in, so we will go to that individual and say, “Okay, you can no longer go to any pharmacy and any prescriber and get a prescription and get it filled, and we pay for it.  You are limited to a certain prescriber, and you are limited to a certain pharmacy.”  So that those professionals at those sites are aware of what is going on.  So those are very effective tools, very effective tools.  Other questions or comments or suggestions.  Yes sir.  

(Audience member question) “I am very concerned about the mind set in this country that is causing us to have bad healthcare and a bad way of thinking.  When people have a fire or see a fire, either a car catches on fire or their house catches on fire or their neighbors house catches on fire, how many people in this room or in Oklahoma think twice about should I call? 

(Speaker laughs) 

(Audience member continues) How am I going to pay for the responder, to cure that illness which is a fine we funded and take care of paying for fire, that is in with police protection.  Many other things in this country.  Now I have to qualify that.  There are some parts of the country that still have a colonial method of paying for fires with insurance and things like that.  I am not talking about insurance repair. 

(Guest speaker) Sure.

(Audience member) But it is tragic that we are putting up with what is happening.  What happened is that yesterday I guess it was in Washington DC with the House of Representatives knowing that it did not change the law immediately but changed the healthcare law that was passed.  People in Oklahoma are talking about introducing legislation if they have not already done that in the new legislative session to make it a crime for somebody in Oklahoma a felony to follow federal law when it comes to healthcare. 

 (Speaker laughs)

(Audience member continues) Now, we need to do something about changing the mindset and educating the people to do what is right and not what they perceive as they are getting the right to do nothing. 

(Guest speaker) Well I appreciate those comments.  Let me just respond in this way.  Number 1, in a complex system, in a system as complex as healthcare delivery and how we are going to use public funds to pay for it, there is lots of room for reasonable minds to differ, and I don't have a problem with that, and I am sure you don't have a problem with that.  I've got to say for this many people to show up to talk about this topic on this icy day tells me that there are a lot of folks out here with the right attitude.  You know, and that does not mean that we are all going to sign up for the same solution to the problem, but it does mean we are focused, I think, on solving the problem.  I really don't hear very many people say, we don't have a problem, and we should not fix it.  What I hear is, well I don't like that fix.  Let's do something different.  

And in fairness, I just think there is lots of room, and I love your analogy with the fireman.  I go one step further, I think one of the really critical elements of responding to this situation is not just being able to incentivise people to call the fire department when they see a fire, and I think the fire departments have showed us that the real investment is in the smoke and fire detector that we put in the house before it ever catches on fire or if it does catch on fire so that we catch it soon, and we are not putting water on smoldering ruins, we are putting a fire out that saves the house.  I mean, that it's a great analogy.  I will use it the next time I make this talk.  

(Audience member question) You just brought up that prevention is a big thing, and I am thinking dollars seem to be so well limited or willingness to spend the dollars.  Could, I keep on hearing the stories about the high smoking rates and other bad outcomes in Oklahoma, and could efforts be spent, maybe with not a lot of money, to try to educate more and more on some of those health outcomes?  

(Guest speaker) Absolutely.  And my friend, Terry Cline, would be yelling amen as the Commissioner of Health.  The one thing that we have come to, and this has occurred in the last 5 or 10 years, is that there were times that we had great debates about whether we ought to spend money on public health education and changing the way people eat and changing the way people act and behave or whether we should spend money on making sure they have access to healthcare through some insurance plan.  We don't do that debate anymore, because we all recognize you got to do both.  It just makes sense to do both.  

There are a lot of things going on right now with the tobacco trust.  I mean you see the ads on TV, I wish we could double them, that are intended to be ways we change that public behavior.  You know.  I've got a state agency now that has a big workout room full of workout equipment, and I see employees in there during the day doing that.  I have even been in there myself.  

(Audience laughs) See?  (Audience laughs louder). 

But, the answer is absolutely.  Gotta happen.  Gotta happen.  And, that is part of the smart money. Did I mention, we ought to do it smart instead of dumb?  That is smart money.  That is smart money.  Let me, okay let's do a question back here, and then I got something else I want to mention if I can.  

(Audience member question) One of the concerns that we run into is access by people of Sooner Care, providers and concerns about the later community about reimbursement rates.  How are you addressing that? 

(Guest speaker) Well, and thank you, and again, I've got to give you just a smidgeon of history.  In 2002, the board of the Healthcare Authority was chaired by a gentleman named Jerry Brickner, a physician from Tulsa.  Jerry Brickner, Dr. Brickner, chaired a meeting in 2002 that is our annual planning meeting at which the agency was scrambling.  I mean at that time the legislature had passed laws to treat to cover more pregnant women, they had passed laws to cover more kids, thank goodness.  I mean it was a great thing.  

We had been expanding services.  At that meeting, however, when we crafted our plan, the Board of the Healthcare Authority established as the #1 priority addressing provider rates.  Before we encouraged the coverage of any additional people, before we encouraged the coverage any additional services, we had to deal with how to make Sooner Care what they called a responsible purchaser, and that happened.  

And, the Chairman of the State Medical Association, and the Chair of the Osteopathic Association, and the Nursing Home Association, and the Hospital Association, stood in front of that board and responded to the Chairman's question, what would it take for us to be a responsible purchaser.  The answer from the practitioner community was, if you can get our rates to 100% of Medicare, if you can pay us the same as Medicare does, you will have at least gotten to a point that we can afford to do business.  

We can afford to see patient's and not do it as a financial loss.  And, obviously hospital said, "you just have to meet our cost.  You know, if you can get us where we break even".  The nursing home same story.  The board at that meeting committed to do that, and that has been the #1 priority since that time.  It has not changed. Now, the great news is, about 4 or 5 years ago, we achieved those goals.  Physicians in this state were being paid 100% of Medicare.  Hospitals were being paid an amount that met their cost, etc, etc., and that was great news.  We saw our provider network growing.  

We have got well I don't want to say the number because I can't remember it, but we have even given a shortage of family practice or primary care physicians in this state.  We were, last year, at about 50% of our capacity.  That means we had that much room in our provider network.  Now, they were not all where we needed them.  We have (speaker laughs) a bunch of we have pockets.  So, we made great progress.  

A year and a half ago in the last half of fiscal year 2009, this state suffered a revenue failure.  You know, different that we are looking at now where we have a shortage of funds, and we are going to adopt budgets that reflect that.  This was a revenue failure.  The last thing on the agencies list to respond to that revenue failure was to mess with rates, to reduce rates.  And, after we had eliminated every optional service that could be justified, after we had squeezed every nickel out of every corner of the program we could find, we still had to reduce rates 3-1/4%, and those cuts are still in place today, because there wasn't money to restore them last year or this year, and I, you know, am not optimistic there is not going to be money to restore them.  The great news is, having made the progress we made, we remain today one of the highest-paying Medicaid programs in the United States in position.  I mean, we were at the time probably paying 65-68% of Medicare.  That is not untypical.  The tradition of Medicaid is this mindset that we are buying on the margin.  Do you understand?  I mean the covered lives were such a small portion of the business that we could ask providers to cover our enrollees and do it on the marginal cost instead of on the actual cost, and they were willing to do that.  But that all changed when more and more people enrolled in the program, and frankly we reached out so that you know 25% in 1997 25% of the children in this state had no insurance.  That number is now down to closer to 10%.  And that sounds great, until somebody says, do you realize that two-thirds, 65.5% of all the preschool aged children in the State of Oklahoma are enrolled in Sooner Care, two- thirds.”  Now, some of us celebrate that, because it means that they've got coverage, you know.  And, it is a little scary to others because they go man you mean we've got two-thirds of the kids on Medicaid?  Same with pregnant women.  So, we are challenged regularly to make sure we have got sufficient provider network to support the program, and it goes without saying, you know. For somebody to have a card in their pockets that says they've got coverage is not the same
thing as being able to get an appointment and
see somebody.  Access is not necessarily
automatic just because you've got a card.  I think
we have got good access, but I think we have got
challenges, and those challenges are not going to
get smaller, they are going to get bigger.  Our
#1 priority every year since we reduced those rates
was to restore that cut.  Every year that was the
first thing on our list of appropriation priorities is
that we cannot dig that we can't get back in
that hole.  So, I look forward to your help on that.
That is a matter of education.  Martin? (Audience
member question) Am I reading your impact
analysis correctly that looks like in the years
2014 through 2016 that the tax revenue
generated will more than pay for the state dollars
it takes to implement this program? (Guest
speaker) That is right.  With 100% federal
funding of the mandatory group and then as you
see on there we also factored in what we call the
woodwork affect, that means just because of all
of the noise, we are going to get people enrolled
that are currently qualified that are not enrolled,
and that means we are going to pay 32% of the
cost.  That is why that first year does have costs
in it, but the total state money required to cover
that population for those first 5 years, no more
than that.  Results in the economic impact that
will produce more tax revenue in the state than it
costs to do the program.  Not a bad deal.
(Audience member comment) Right.  Sounds like
a no brainer.  (Guest speaker) Yah.  If you don't
have that little handout, pick it up on the way
out.  You will see that.  Just a second.  Let me
make sure.  Yah.  Right over here and then we will
get back to you, Steve.  (Audience member
question) Is there a way with all of your
computer programs and I don't know if you have
access to doctors and pharmacies, that if people
are on Medicaid that they could get the maximum
amount of prescriptions that are allowed.  Like, I
know they can't get Lortab or something for 100
days, but they can get blood pressure medication
for a 100 days.  I see so many clients getting
month to month to month, and then they short
themselves on something else the next month
because they had an antibiotic they needed. Isn't
there an automatic way they could give them
those maximums? (Guest speaker) Well, there
are ways to try to manage that, and we do have
staff that will help with that.  And what she is
raising is the issue, one of the ways that you
manage a pharmacy benefit is you just set a
number of scripts per month that can be filled.  I
am happy to tell you that for many, many years
that number was 3, and that number is now 6,
and that's progress.  But, for those people who,
and not every prescription, we actually have a
policy unlike my commercial plan and yours, we
have a policy that says we'll fill a script and pay
for a script that is 30 days or 100 units,
whichever is greater.  Now, I bet yours and mine
say whichever is less, because that way you pay
the co-pay more often.  That is just part of the
deal.  So, we do have some people that can help
manage that, and I appreciate the question.
(Audience member comment) Who is it?  Who
do I call? (Guest speaker) Just call the help line.
If you have got a card, then you've got a help line
number on the back, then you call that, and we
will connect you with the pharmacy advisors, and
they will help you manage that.  (Audience
member comment) So the number on the back
of the card the clients can call (Guest speaker)
Yep.  That's right.  Yes sir, and then we will come
back up here.  Sorry.  (Audience member
question) Mike, a quick question.  The Wall
Street Journal just the other day had a big article
nationwide about a looming shortage of doctors.
I would love to hear your thoughts on the things
Oklahoma can do to help the program. (Guest
speaker) We have got to have resources to train
more doctors, and I got to tell you more
importantly than that, we have got to figure out
ways to keep them.  If you did the math, we
probably train enough, we just don't keep
enough, and keeping enough means you got to
have reasons for them to stay.  You got to have
programs that effectively help them pay off their
school debt.  You got to have ways to challenge
them professionally here.  You got to have
opportunities for them practice in settings that
they want to practice in.  So, there are a number
of ways to do that.  I got to tell you, one of the
things that we developed in Oklahoma's Medicaid
Program is a system that supports medical
education.  We convinced the federal government
a number of years ago that in order for us to
have an effective program in Oklahoma, we had
to address the sufficiency of the supply site of
providers, particularly physician providers.  And
so, we are now spending a little over 100 million
dollars a year that the federal government
participates in to support medical education at
both OU on both sites, here and in Tulsa, and OSU
in Tulsa.  And, we have just got to keep at it, and
we've got to do more of it.  We've got to find
ways for people to pick up some of that slack.
There are, there are, we've got physician
assistants and nurse practitioners that are doing
incredible jobs for us in primary care, and I think
the physician community has come to the point
where they acknowledge that.  They recognize it.
Its, you know this whole scope of practice
debate can get pretty ugly, as I am sure you
know.  The fact is, there are a number of things
we need to do, but I think the most critical is to
figure out a way to get docs once trained to
practice here in Oklahoma.  Yes sir.  (Audience
member question) You mentioned that there are
825,000 people enrolled in Sooner Care now.
How does that compare with previous recent
years (Guest speaker) It is an all time high.  If
you look at our annual report.  You know,
statistics are such as dangerous game.  Our
annual report reports the unduplicated count over
the course of the year.  That number last year
was 885 million, oh thousand (speaker corrects)
(audience laughter).  It's the decimal points.  The
decimal points mess me up every time.  You know
when you're talking about dollars, you're talking
about trillions, 885 thousand Oklahomans, that's
24% of the states population were enrolled at
one point during last year.  Perhaps the more
meaningful number is what I call the any-given-
time.  We have monthly enrollment numbers, and
that number this month is around 730 thousand.
In both cases, 885 thousand is the highest that
there has ever been enrolled, unduplicated over
the course of a year, and the current monthly
enrollment is also the highest.  You know, it is an
income-based program, so it is what the
economists call counter cyclical.  It means when
the economy goes sour, our business picks up. I
mean, you hear Howard Henry talking about food-
stamp cases, and you know, every program that
we’ve got that is designed to qualify people
based on income responds when the economy
turns, and of course that introduces the horrible
dilemma for us as public policy makers, and that
is the more demand we have on our programs,
the less resources we've got to meet it because
the economy has gone south and so has the
revenue, but it is the highest it has ever been.  I
know we are getting real close to 1 o'clock.  I
don't have a watch, so somebody needs to ring a
bell. (Audience member) I have one more
question.  (Guest speaker) Somebody needs to
ring a bell.  One more question.  You win the
prize.  Oh man.  (Audience member) I have
one.  (Guest speaker) Oh good.  (Audience
laughs) (Guest speaker) Thank you Connie.  She is
going to ask a really tough question, I know.
(Audience member) This is an easy one, but
probably not a 2-minute question.  On the
national legislation, can you talk about what the
exchange is and what that means for
Oklahoma.  (Guest speaker) Oh, I can do that a
little bit.  Yeah.  In fact, I want to promote a
meeting next week that is a public meeting on
the exchange, and there is really two, but they
are. They are pretty much the same.  The
exchange is really a way of connecting the people
who need coverage with the products that are
available, and it is a one-stop shop so that it is
available for small businesses who are trying to
find products and compare products so that they
can go to the exchange and say this is, you
know I've got this many employees.  Here is what
they look like.  Here are the demographics.  Show
me the products. And it is a system that
accommodates small business looking for the
possibility of offering an employer-sponsored
plan.  It also is available to individuals.  I have
talked about Insure Oklahoma.  It means that
individuals can go to a hopefully it will be a
website, and they will be able to look at their
choices.  Right now, you can go to our website
and see all of the products.  We are kind of
getting into the insurance business.  See all of the
different products that are offered, and you
can the system is designed so that you can
basically describe yourself to the system, and it
will then route you to what product will best meet
your needs.  That is really what an exchange is
about.  It also introduces this free market notion
that people really are capable of understanding,
you know the price and the benefits, and it, it is
an exercise that those of us who are state
employees go though every year when we get our
pamphlet, and we look at all of the products that
are available.  We know what the premium is.  We
know what the benefits are.  We know the co-
insurance and the deductibles.  That is what the
exchange is about.  You know, in Massachusetts,
they would have called it a connector here,
except we have all heard it connecta so long
(audience laughs).  Connecta.  I wanna have a
connecta.  There is actually legislation on the
books in Oklahoma that anticipates that concept.
Before there was federal health reform, and in
that context it is called a hub.  So it is all, you
know, call it what you will.  That is what it is
about.  Now let me tell you about this meeting.
Next Wednesday, January 26th, 10:30 till noon at
the Department of Mental Health Training Center
which is above the AOL space at Shepherd Mall,
it's on the second floor, I call it the AOL space.
For some of us it is still the Dillard's store
(audience laughs).  The old Dillard's store.  That is
the, it is called the Oklahoma Healthcare
Exchange Stakeholder meeting, and it really is one
of the early meetings where we have
learned this lesson in the last few years, and I
know DHS has learned the same one.  The more
we get people like you in a room to help us
navigate these public policies, the better product
we end up with.  I mean those days of going into
a room and locking the door and designing the
system and then announcing it, they are gone.
They are history.  And so, this meeting is the
initial meeting.  And if you have got an interest in
that, I'd really encourage you to do that.  Where
can they learn more about that Cindy? (Cindy
replies) There's Nicole.  (Guest speaker) Oh
there is Nicole right there and Derek.  (Audience
laughs) (Derek replies) They can go to the
Oklahoma Healthcare Authority public site
(coughing) (Guest speaker) Okay.  (Derek
continues) And from there be able to navigate,
called the Oklahoma Healthcare Exchange, and
there you will get meeting information and the
invitation, and the agenda is also on the website
there.  If you wanted to direct link, its \ohx\,
Oklahoma Healthcare Exchange, ohx, and that will
get you directly there.  If not, visit Oklahoma
Healthcare Authority's public site.  (Guest
speaker) That'll do it.  Thank you so much for
braving the weather and coming out today.  I
really appreciate it.  (Audience clapping)  
Thank you Connie.