TMA Supports Senate Budget Plan

April 19, 2011

The Honorable Steve Ogden
Chair
Senate Finance Committee
PO Box 12068
Austin, TX 78711-2068

Dear Senator Ogden:

I am writing on behalf of the 45,000 physician and medical student members of the Texas Medical Association to express our strong support for the Senate Finance Committee’s proposed budget for the 2012-13 biennium.

Texas physicians understand that the state’s historic budget shortfall requires spending reductions, and that’s why we want to commend you and the members of the Finance Committee for the conscientious hard work that allowed you to avoid drafting a slash-and-burn budget.

When it comes to improving the health of all Texans, the Senate bill is far from perfect, but it’s a far sight better than what the House came up with. Here are some reasons why we support your plan.

The House bill eliminated more than $100 million in state and federal funds for community-based mental health and hospital services for adults and children. The Senate plan restores that money.

• Mental illness costs the state and local governments more than $1.5 billion per year. The state must pay for each person who is repeatedly jailed, hospitalized, or admitted to detoxification centers due to mental illness — and one year in jail alone will cost up to $50,000.

The House bill cut Medicaid and Children’s Health Insurance Program (CHIP) physicians’ fees by 10 percent. The Senate plan restores that money.

• Medicaid provides essential health services to the neediest Texans. Sixty percent of Texas’ Medicaid budget is paid for with federal dollars, thus bringing Texans’ tax dollars back home. When those dollars are cut, services are still provided, but local taxpayers must pay 100 percent of the cost.
• Physicians want to take care of Medicaid and CHIP patients. However, many physicians are forced to limit the number of patients we treat due to government red tape and low payments.
• Without access to a physician, Medicaid patients will rely on local emergency departments (EDs) for care. The average cost of a Medicaid physician office visit is about $37. In the ED, that same care is six times more expensive, not including prescription drugs, lab work, or x-rays.

The House bill cut almost all of the state’s $21 million tobacco cessation program. The Senate plan restores half of that money — and uses the rest to help children’s hospitals.

• Cutting tobacco-cessation programs is penny-wise but very, very pound-foolish. Nearly 25,000 deaths each year in Texas are linked to tobacco. The direct and indirect cost of smoking in Texas is $20 billion per year.
• Tobacco cessation programs save lives AND save money, returning up to $2.61 for every dollar spent.

The House bill provides absolutely no funding for either of our physician education loan repayment programs — that’s a cut of $58 million. The Senate plan provides $17.5 million for the biennium for the underserved-area loan repayment program.

• Texas currently ranks 42nd out of 50 states and the District of Columbia in physician-to-population ratio for patient care. The shortage is now evident in both rural and urban areas of the state. Since 2004, Texas has more than 21,000 new physicians. However, we still don’t have enough physicians to keep up with the state’s robust population growth.
• The average debt of a new physician is now more than $147,000. The amount of new physicians’ medical school debt affects where they set up practice and what specialty they choose.
• Rural and border communities have a better chance of recruiting a new physician when they can offer a unique benefit such as loan repayment.

The Senate plan invests $6 million in significant efforts to improve birth outcomes and reduce preventable hospitalizations and readmissions.

• By reducing the incidence of preterm births, these programs save lives and save taxpayers’ dollars.
• The cost of caring for a low birth-weight baby born prematurely is about $50,000. Since Medicaid pays for about half of all births in Texas, we estimate that every premature birth we can avoid will save Texas Medicaid $25,000.

Again, when it comes to vital health services for the people of Texas, the Senate plan is a vast improvement over the House bill. Given the state’s bleak fiscal outlook, we believe that your plan is likely about the best we can do.

Let me reiterate our strong support for the Senate budget plan and wish you Godspeed.

Sincerely,

Susan R. Bailey, MD
President

82nd Texas Legislature Testimonies