By Greg R. Lawson

Thank you Chairman Huffman and members of the Committee for the opportunity to testify today. My name is Greg R. Lawson and I am the Statehouse Liaison and Policy Analyst with The Buckeye Institute for Public Policy Solutions. The Buckeye Institute is a think tank that promotes a low-tax, low-regulation environment, and free-market public policy solutions for Ohio.

The Buckeye Institute opposed Governor Kasich’s decision to expand Medicaid under the Affordable Care Act. Although serious concerns remain about this decision, it is important to give credit where credit is due and acknowledge that some aspects of the state’s Medicaid program have been improved and are being run exceptionally well. Shifting long-term care dollars from institutional care towards home- and community-based care, for example, was long overdue. Likewise, the Administration’s efforts with respect to Medicaid’s managed care program also shows signs of successfully coordinating care while still controlling costs. We commend Mr. Kasich’s Administration for taking these necessary steps.

As these early success stories suggest, Medicaid reforms are possible and can be effective. Thus, we encourage Ohio policymakers to build on these accomplishments in several ways.

First, the General Assembly’s biennial budget rightly includes the Healthy Ohio Program based on health savings accounts or “HSAs.” This program could provide consumers and the state with significant savings. Research demonstrates that consumer-directed healthcare, such as HSAs, tend to reduce healthcare spending. Exact savings may vary.[1] but reasonable estimates show savings on healthcare in the range of 5-10 percent.[2] This should not be terribly surprising inasmuch as health savings accounts make consumers more cost-conscious by ensuring that they have some of their own proverbial “skin in the game.” Fully implementing this program, of course, will require federal approval, but more consumer-directed care—especially for the expanded Medicaid population—will save money in the long run while helping recipients become more responsible for their own healthcare decisions. As federal funding for the state’s Medicaid expansion continues to wind down, Ohio will soon be on the hook for some expenses that have been obscured by overestimates elsewhere in the program. Accordingly, policymakers should not abandon a cost-effective HSA strategy no matter how the current federal waiver process plays out.

Second, the “telemedicine” initiative for Ohio Medicaid sponsored by Representative Gonzales, and former Representative Wachtmann is an excellent first step in expanding access to healthcare providers and potentially lowering healthcare costs.[3] Access to healthcare is a statewide concern, but remains especially important in rural areas and for those patients with limited mobility. Telemedicine can be a particularly cost-effective way for these patients and their physicians to manage a range of chronic health conditions, including diabetes and obesity.

Unfortunately, telemedicine in the Buckeye State is not what it could be. For example, only allows for medical doctors, doctors of osteopathic medicine, and licensed psychologists to provide telemedicine and receive reimbursement for a limited menu of eligible services.[4] By contrast, Medicare allows many other types of healthcare professionals, including nurse practitioners and physician assistants, to offer a wider array of telemedicine services. Expanding the pool of eligible telemedicine care providers and services will give patients greater access to needed healthcare and lower costs for consumers and care providers.[5] Those potential benefits certainly merit further study and consideration.

Third, Ohio may also want to consider joining an interstate medical licensure compact. Such a compact would allow physicians to practice in multiple states and would expand the scope of telemedicine. Eleven states have already passed legislation to create these compacts, and another eight states have introduced the relevant bills.[6] A legislative effort to create an interstate medical licensure compact would not only improve telemedicine services, but it could also initiate a deeper conversation within the General Assembly regarding scope of practice, licensure issues, and the increasing likelihood of primary care provider shortages. Looming shortages of primary care doctors impact Medicaid as much as, if not more than, the broader healthcare system. Doctor shortages will become an increasingly pressing concern considering the larger-than expected number of Ohioans enrolling in Medicaid after its expansion. A robust conversation about extending telemedicine eligibility, interstate licensure compacts, and other scope-of practice issues seems necessary and prudent considering the state’s healthcare horizon.

Finally, under current state law, if a Medicaid applicant fails to select a managed care plan, such an applicant is automatically enrolled in a default plan that will pay the managed care provider regardless of whether the enrollee actually uses the plan’s services. This is a recipe for fiscal waste as the state too often spends dollars for unused services. The General Assembly’s budget recently authorized the state to examine whether delaying Medicaid enrollment until an applicant has selected a managed care plan could save Medicaid money. That line of inquiry looks promising to us.

The General Assembly should continue to explore ways to assure quality healthcare for Ohio’s Medicaid recipients without allowing the costs of that care program to break the state’s budget. Positive steps have already been taken and early successes already achieved, but there is more work to be done on behalf of Ohio and her taxpayers.

Thank you again for the opportunity to discuss these important issues. I will be glad to answer any questions that the Committee might have at this time.

1. Anthony T. Lo Sasso, Mona Shah, and Bianca K. Frogner, “Health Savings Accounts and Health Spending,” Health Services Research, August 2010, http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2910568/

2. Kathryn Nix and Alyene Senger, “The Promise of Consumer-Directed Health Plans: Studies Show Success at Reducing Costs and Maintaining Quality,” The Heritage Foundation, July 9, 2010, http://www.heritage.org/research/reports/2012/07/promise-of-consumer-directed-health-plans-studies-show-successreducing-costs-maintaining-quality/

3. The Ohio House of Representatives, “Reps. Gonzales and Wachtmann Applaud Telehealth Bill,” June 26, 2013, http://www.ohiohouse.gov/anne-gonzales/press/reps-gonzales-and-wachtmann-applaud-telehealth-bill

4. Ohio Admin. Code, §5160-1-18 Telemedicine (Lawriter), http://codes.ohio.gov/oac/5160-1-18

5. American Telemedicine Association, “Telemedicine and Telehealth Services,” January 2013, http://www.americantelemed.org/docs/default-source/policy/medicare-payment-of-telemedicine-and-telehealthservices.pdf

6. Federation of State Medical Boards, “Legislative Status,” accessed September 4, 2015, http://www.licenseportability.org/