Three reforms for Oklahoma health care
April 1, 2019
Year after year, the issue of rising health care costs remains the top policy concern for most Americans, beating out crime, drug use, illegal immigration, and the federal debt in Gallup polls. To address these legitimate concerns in Oklahoma during the 2019 legislative session, some lawmakers have put forth proposals to expand Medicaid, but this would add hundreds of thousands of able-bodied, working-age adults onto the state’s already bloated Medicaid program. Putting aside the fact that these types of proposals have left other expansion states with financial messes (and higher taxes), expanding Medicaid does little to address the larger concern of growing health care costs for everyone.
Instead of looking to state government to control more of health care in Oklahoma, policymakers at the state capitol should pursue regulatory reforms so medical providers can innovate and provide new ways of delivering care.
There is no single policy solution to fix all the complex and compounding problems in health care. However, below are a few reforms Oklahoma lawmakers can enact to find efficiencies, remove regulatory red tape, and improve health care without further burdening taxpayers.
1. Strengthen Audit Processes
Oklahoma officials have a fiduciary duty to taxpayers to verify that Oklahoma’s Medicaid audit checks can identify potential fraud and waste in order to ensure state dollars are going towards truly needy individuals who are actually eligible for the program. Last year, Oklahoma lawmakers passed the HOPE Act to improve the Oklahoma Health Care Authority’s (OHCA) audit process by conducting quarterly reviews of Medicaid rolls with assistance from an outside contractor. Although the HOPE Act was signed into law last May, OHCA was still accepting proposals and bids from outside contractors as of March 2019, according to representatives at OHCA.
Gov. Kevin Stitt has also voiced the need for comprehensive audits for Oklahoma’s Medicaid agency. Earlier this month, Gov. Stitt requested a separate performance audit of the Oklahoma Health Care Authority to determine whether the agency is accurately determining eligibility and removing those who no longer meet eligibility requirements. In his announcement, Gov. Stitt stated, “It is important that we ensure our resources are supporting those in our state that need it the most. States across the nation have already completed Medicaid audits and found significant savings because of it.”
2. Repeal Certificate of Need Laws
Oklahoma should repeal unnecessary regulatory barriers, like Certificate of Need (CON) laws which artificially limit supply and competition in the health care industry. CON laws require government permission before new health care facilities may open, offer a new service, or purchase certain types of medical equipment in an area. An array of empirical evidence has shown CON laws have not slowed the rise in health care costs in states but rather increased per-unit health care costs. A policy analysis conducted by the Mercatus Center estimated that the number of hospitals in rural Oklahoma could increase from 80 to 115 if Oklahoma repealed its CON laws.
3. Utilize Tobacco Settlement Funds
Oklahoma lawmakers should dedicate all future annual payments from the 1998 Master Settlement Agreement with tobacco companies towards investing in rural health care infrastructure. Redirecting these funds could provide rural health care providers in Oklahoma with an additional $70 million in revenue annually without raising taxes on Oklahomans. These funds could be used to provide hospital stabilization grants for rural health care infrastructure to strategically cover actual dollar losses at rural hospitals. This would help hospitals that are actually in trouble but not commit more public funds to big, urban hospitals that are flush with cash.