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Finance committee looks at health care costs

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Posted: Thursday, January 31, 2013 10:00 am | Updated: 2:43 pm, Mon Feb 4, 2013.

AUSTIN – The Senate Finance Committee held its first public hearing of the session about Article II of the budget, health and human services funding. With the costs of healthcare rising every year, this article is making up more and more of the budget each session. This year, the Senate-introduced budget allocates $70 billion in health care spending, about as much as the state spends on public education, and that doesn't include caseload growth in Medicaid anticipated in 2014 and 2015. Finance Committee chairman Tommy Williams of The Woodlands told members that they have to get a handle on rising healthcare costs before it consumes the entire state budget.

"If we don't find a way to serve these populations at a price that we can afford, pretty soon all we're going to do is write the health and human services budget," he said. "We cannot continue to fund 14 percent annual growth in Article II."

Williams told his colleagues that it is vitally important that the state keep providing vital services for its most needy citizens, but he says current methods of funding aren't working. "This is the heart of the budget," he said. "This is what decides how we look to the rest of the world, it's also how we are going to deal with the other important parts of the budget." Williams said that there would be tough choices to make in the coming months, not about whether needy populations should be served, but how they should be served.

Finance Committee member and Senate Health and Human Services Committee chair Jane Nelson of Flower Mound agreed with the Finance chairman. "I really think all of us need to think about not continuing to fund programs in the same way and expecting different results," she said. "More money helps in some cases, but I think we need to look at what outcome we are trying to achieve." As chair of the Senate Health and Human Services committee, Nelson last session passed bills aimed at containing cost growth. The Legislative Budget Board testified before the Finance Committee Wednesday, Jan. 30, that the state had achieved $1.8 billion in savings, out of $2.9 billion in savings targeted by last session's legislation. This session, Nelson has filed two bills aimed at further controlling costs. One bill would move managed care to keep down the costs of long-term Medicaid care. The other seeks to reduce fraud and waste in Medicaid.

The Finance Committee is expected to hear from the public regarding health care services on Thursday, Jan. 31. That won't be the end of work on Article II for the committee, however. The committee will split into a number of subcommittees, one of which will be tasked with marking up the budget for health and human services. This subcommittee will submit its recommendations back to the full committee, and then, if approved, those will be written into the full budget. Williams told committee members at the first Finance hearing he wants a final budget up for a vote before the full Senate by mid-March.

The Senate will reconvene at 2 p.m. Monday, Feb. 4.

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