Governor Phil Bredesen

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• SUSAN DENTZER:

  Governor, thanks very much for joining us. You just gave a speech where you called Medicaid a clear and present danger.

• GOVERNOR BREDESEN:

  Uh-huh.

• SUSAN DENTZER:

  Why is it a clear and present danger?

• GOVERNOR BREDESEN:

  If, if the states–we just can't afford Medicaid. The, the projections are that nearly half of the states are going to spend more than half of all the new money they have in the years ahead, over the next five years. In our state, it's almost 90 percent of it. It just means that we end up cheating education, we end up cheating public safety, we end up doing nothing for state employees, and, you know, so many places, Medicaid has just become the "gorilla" that comes to the table and it eats everything that it wants to and any crumbs that are left for education or anything else are, are all that's there, and it just doesn't make any sense anymore.

• SUSAN DENTZER:

  And which is why you said, back in November, that it's time to get rid of TennCare, and I think you used the language, "dissolve TennCare" and go back to a traditional Medicaid program.

• GOVERNOR BREDESEN:

  Well, I very much wanted and want to save TennCare. The notion, to me, of trying to preserve broad coverage, keep a lot of people on the program, and do that by maybe trimming back a little bit on the benefits, the, the bronze plan for a lot of people instead of the platinum plan for a few, that's something I deeply believe we should do.

  We had a program that would, I think, reasonably have allowed us to do that, got stopped in courts, and with a bunch of sort of politics of national health ideology and those, those kinds of things.

  So we're really left with the only other alternative at this point, which is to cut back on the number of people, but it is not the optimum solution and not, not a place that I wanted to be at all, I'll be honest.

• SUSAN DENTZER:

  Let's just run down some of the financial parameters of this program, the size, the rate of growth and so forth.

• GOVERNOR BREDESEN:

  Well, the program today in Tennessee is about an $8.5 billion program, it's growing at around 15 percent a year, which is way in excess of even the national Medicaid growth rates. Our pharmacy benefit grew by 24 percent last year.

  I mean, there's no way to tax or revenue your way out of that. You have to tackle a growth rate at that level in some underlying, underlying fashion.

  The projections for us, for Tennessee, for this next year, were that TennCare would take about 650 million new state dollars.

  Our total growth in our revenues is going to be around 325 million. So we're not even close. I mean, it's not even a matter of making allocations or decisions. We just don't have the money to continue TennCare in its current form.

• SUSAN DENTZER:

  I sat here back in 1994 interviewing then-Governor McWhorter on the eve of the birth of TennCare, and there was obviously a lot of anxiety and angst [over] how, where we're going to find all these managed care organizations.

  And at the same time, there was a lot of excitement about the state striking out to cover all of these people who did not have access to health insurance.

  It was really an exciting model, was it not?

• GOVERNOR BREDESEN:

  It was a great dream, it really was, and, and I'm somebody who, who believes very deeply, that it's important for government to, to play a role in extending health insurance to people who don't, who don't have it, and the idea of bringing working poor in some way into the system, people who couldn't get health insurance because of preexisting conditions, I think it's a wonderful dream.

  I just think what we did here is we reached a little far, we didn't manage things very well over the, that period of time, we let ourselves get caught up in a host of agreements certified by courts, that we never should a signed and, and I feel a little bit today like the fellow that just happens to be living in the house when the credit card bill comes in for ten years of, of really not paying attention to the fundamentals here, and we're having to deal with it. It's very, very painful.

• SUSAN DENTZER:

  A number of analysts have observed that when you came into office, you were in effect forced to contend with a lot of serious mistakes. In some instances, it's been charged, there was mismanagement – and there was also a new deal struck with the Federal Government around the financing in 2002 that cost the state a lot of money.

• GOVERNOR BREDESEN:

  Right.

• SUSAN DENTZER:

  As well as a period of not having the managed care organizations at risk, not keeping an eye on the ball, pharmaceutical utilization, et cetera. That you really got saddled with a mess. Do you believe that?

• GOVERNOR BREDESEN:

  There were a lot of issues when I came in to government in regard to the basic budget itself. We'd had a disastrous previous, probably three years, in terms of our budgets, and with TennCare as well.

  I think we've gotten most of them sorted out. The budget of the state is now on an even keel. This, this year is the third honestly-balanced budget. Our reserves are, actually our "rainy day" fund will be this next year at the highest level in Tennessee's history, and those are things I'm proud of.

  I want to do the same thing with TennCare. It has been frustrating because we are in so many ways chained by exterior, exterior things. Federal rules about what you can do and what you can't do in the program. A host of consent decrees for them that were entered into by the state.

  So it's a little harder to–it's a little harder to move on making these things, these things happen.

  What we're doing right now is to do what we have to do to get through the next year or two on the budget, and simultaneously to, you know, go back and try to get some relief in the courts from some of these decrees. I've certainly been talking to other groups about things we might do nationally to try to make the program more workable, and to make it really take into account and use what we've learned about how to make public programs work, since the 1960's, when these things were, were originally, originally invented, and that's something I think we can do and, frankly, I think the, the political will and energy is there right now.

  If all we do is fool around with the federal-state formulas a little bit, or get five more points of discount on the drugs, I think we'll have lost a huge opportunity to really reinvent this program in a much more sustainable way.

• SUSAN DENTZER:

  For every dollar that the state puts into TennCare, the feds put in basically two–

• GOVERNOR BREDESEN:

  Right.

• SUSAN DENTZER:

  –two bucks and a quarter.

• GOVERNOR BREDESEN:

  Right.

• SUSAN DENTZER:

  Why did you not decide to go to CMS, to the Federal Government, and ask for more money for TennCare?

• GOVERNOR BREDESEN:

  Oh. I mean, first of all, I don't have any problem in going to the Federal Government and asking for money, and when, when I first came into office, I did go up and ask for some money back that had been given away in the previous negotiation and, and was successful in getting it, and without that, I couldn't have, couldn't have survived.

  I certainly explored the notions of whether we'd get, we could get additional money, and, you know, I hope manna from heaven comes down and, you know, sorts out all these problems.

  I just think it's highly unrealistic to be plotting a strategy around getting more money from the Federal Government when you can't find anybody at the federal level, any of our elected representatives, any of the people at CMS, you know, who'll give you any encouragement whatsoever in making that happen.

  That to me would just be driving the car toward a brick wall at a high speed and hoping somehow the wall falls down before you get there. I think that would be irresponsible.

  So I've approached it from the standpoint of saying look, there is a limit to what the Federal Government can do, is going to do with a half a trillion dollar deficit. It's a conservative Congress. I just don't think there's a lot of hope there to solve this problem with, simply with money over a long period of time.

  So let's try to get at underlying–what's going on? what's causing a 24 percent increase in our pharmaceutical costs? And, you know, maybe if we can get those under control we could have a little better argument to go back to Washington with and say, you know, help us through this period of time in this way.

  But I just think we'd be–you know, if I'm walking down the street and I see a $100 bill lying on the ground, I'll stop and pick it up, but trying to pay your bills by walking down the street looking for $100 bills is not a very good strategy and, and I just think it would not be responsible.

• SUSAN DENTZER:

  By the same token, because of the federal match and other federal assistance, if you take 650 million out of the program, you're going to give up 1.2 billion in federal assistance.

• GOVERNOR BREDESEN:

  No question; no question.

• SUSAN DENTZER:

  Which means 1.2 billion fewer dollars in the health care system of Tennessee.

• GOVERNOR BREDESEN:

  Right.

• SUSAN DENTZER:

  The Center for Budget and Policy Priorities has said that's going to lead to as many as 145,000 fewer jobs, a big economic "hit" on the state.

• GOVERNOR BREDESEN:

  Well, first of all, that kind of stuff is nonsense, those kinds of numbers. Remember, we have the most expansive program in the country today, and I don't think you can identify 145,000 jobs that we have, that other states don't have because of this, this program is, is in here in that way. I think that kind a stuff was just, just "scare tactics," and, you know, I hate to give up federal money but I don't think any sensible governor is going to get on a treadmill of just, if that money is held out there, you'll just sort a stop whatever else you're doing and go find the money to bring it down.

  The issue for me is one of balance. I've got serious issues in K through 12 education. I want to get a pre-K program going here in our state. We have some public safety issues. Methamphetamine, for example, is a huge issue in the, throughout the Southeast and here, in Tennessee, and I just, you know, I don't think it's responsible to, you know, to be chasing federal dollars over here on one side, taking money away from all these other things, that are also very important for the future, future of our state.

  That I'd argue that, you know, a good solid K through 12 educational system is every bit as important as health care is, is in our state.

  And the last thing I'd say is just e–e–even if I wanted to, O don't have the money. I have 325 million new dollars this year. Keeping TennCare as it is is 650. I do not have the money to do it with and even if I wanted to or thought it was the smart thing to do, it's just not there.

• SUSAN DENTZER:

  So what do you think the impact will be, then, of 1.2 billion of federal dollars exiting the state?

• GOVERNOR BREDESEN:

  You know, I think the impact will be–I think the impact will be that hospitals and, to a certain extent, doctors, are going to have to do more care, as they do in other states today, and that's just a way of picking up some of the slack.

  Certainy in the area of pharmaceutical costs, there's some impact on pharmacies, but that mostly goes out of state. That's mostly money that transitions through a pharmacy and goes off to, goes off to somewhere else. There's no question that it will have negative effects.

  I mean, you can't take that kind a money outta the economy and not have some negative effects.

  But, you know, as I, as I've, as I've tried to tell people, we have the number one program in the country in regard to the percentage of people covered, in regard to the percentage of the state budget which is allocated to it, and we just can't afford to be there anymore. Just–it's just not a place that we can, we can survive at.

  When we get done with these disenrollments, we will still have the seventh most comprehensive program in the country. It's not that we're moving back to some bare bones, bare bones program that's at the bottom of the list. It will still be a generous, expansive program.

  And just–you know, many of the people, many of the people who would come off of TennCare under what I'm having to do, are people who, in no other state, ever had health insurance through the Medicaid program.

  So other states, all 49 other states are finding ways to deal with these uninsured people in this category and we're going to have to do the same thing, if, if, if in fact we're forced to stay on this course, which is what it looks like right now.

• SUSAN DENTZER:

  Let, let's talk a bit about some of the people who would be disenrolled.

• GOVERNOR BREDESEN:

  Uh-huh.

• SUSAN DENTZER:

  You've said you're very worried about the severely and persistently mentally ill [SPMI] portion of the population of whom there are roughly 30,000–

• GOVERNOR BREDESEN:

  Right.

• SUSAN DENTZER:

  –who would be affected through these changes. How do you see getting them through this?

• GOVERNOR BREDESEN:

  I think what we're going to have to do is we have been very–we have been very loose about our definition and in the 30,000 SPMIs there are some people who are barely, you know, would barely qualify or might well not qualify in other states, and there's some other fairly severely affected individuals.

  That's one a those areas that we, we have a process to try and identify other things that we can do in state government through things like our county health centers, and through the, through the mental health organizations that exist in communities throughout the state, to try and provide a safety net and help these people.

  Again, these are people in this expansion population who generally do not have coverage in other states, so other states are figuring out ways to, to–and have figured out ways to de–to deal with this.

  The challenge for us is having had TennCare for ten years, a lot of that infrastructure has been let to sort of drift, drift a little bit because we didn't need it, and we now have a fairly short time to try to get it whif–whipped back up into shape, but we're working very hard at that. We've kept some money aside in TennCare to be able to use to, to try and fund some a those kinds of, those kinds of issues, and, you know, if there are some people who just absolutely have to have these drugs, for example, and, and, you know, we're prepared to try to figure out a way to get them in their hands.

  But this is not–I want to be clear–this is not some arbitrary decision that's been made, and I truly do not know of another way to get through this next year without doing some serious disenrollments of people and it's just a place we've come to in TennCare by trying to give too many benefits to too many people without really a plan for doing it that's sensible about the finances.

• SUSAN DENTZER:

  We talked with a woman today who's diagnosed with bipolar disorder who is a dual-eligible. She's worried about making it through a transition of some months until the Medicare benefit comes on line in January. Her sister is an uninsurable. No prospect of a Medicare benefit. And looking at essentially the fear of doing without as many as four, various behavioral mental health medications as well as a number of other medications.

• GOVERNOR BREDESEN:

  And again I–believe me–I have talked to a lot of these people and I feel very deeply the plight they're in. The two people you've just described would not have ever had health insurance in any other state in the union. Those two categories exist only in Tennessee. So at, at some level, I'm just saying look, you know, I wish we had a comprehensive national health insurance scheme in which there was never any sense of any of these people being without health insurance, but I can't afford to do that all by myself in Tennessee, and ultimately, where we have limited resources, we have to put it behind the poorest, the poorest of those, of those people.

  If, if these people, remember, are in this expansion population, and therefore are subject to being disenrolled, they're there because they have income. They are not the poorest of the poor, they're people who have some income, so I, you know, I guess one thing I would say is, is that, you know, you may have to go out and actually buy, you know, and buy some a those drugs, and I know it's painful and I know you weren't doing it before, but people in exactly your circumstance, in Massachusetts or New York or California or Kentucky, for that matter, are having to buy these things today, and you've gotten a lotta help over the course of the past ten years and, and I hope, you know, we're all grateful that's happened, but it's coming to an end.

• SUSAN DENTZER:

  You're continuing to negotiate with some of the advocates, at least, for the TennCare population, on some modification of the plan that you announced in, in January. What, what do you think will come to pass?

  Will those cuts that you announced in January be the cuts that are eventually [enacted?]

• GOVERNOR BREDESEN:

  I think the cuts we announced in January are effectively going to be–I tried for six months, intensively, to negotiate with the Tennessee Justice Center, specifically, who are the ones who are involved in the, in the law suits, the rest of it would not be, would not be an issue, and in that six months I did not manage to change one word, one paragraph on one page of any of these various consent decrees.

  I mean, I think I'm just faced with, well, good–well-meaning people. I'm not suggesting that they're not acting from what they believe is the right thing to do but we're just at a complete impasse here, and, you know, I'm the one that got elected, and got sworn into the office and promised to do a good job of, of running the government and, and I can't bankrupt the government over this issue.

  I've got to act. I've got to act.

• SUSAN DENTZER:

  On the consent decrees and specifically to zero in on one of them, Greer, the advocates, Gordon Bonnyman and others, say that is not an obstacle to putting in place, for example, a formulary in TennCare. They say that they stressed that to you when they had–when you had discussions back in the fall. There was nothing in it that they see as the obstacle.

• GOVERNOR BREDESEN:

  That's just–that's just nonsense. I mean, it's–you know, I don't, I don't want to take issue with some lawyers for, for a public interest law firm, but if they're not an issue then they should not have difficulty in waiving them and allowing us to, to go ahead.

  Our attorneys feel that if we put in place a serious formulary, we would be acting contrary to a consent decree which has the force of federal law and that we cannot responsibly do that without changes in those consent decrees.

  So I think the notion of trying to brush it off that way I just think is nonsense and, and, you know, if it is such a little problem, why would they not agree to, to simply allow us to go ahead.

  All we ever asked for in these consent decrees was just basically an overarching decrees that said we won't use these consent decrees to stop anything which CMS has approved.

  So we're not trying to do anything that's outside of the realm of what CMS would approve in federal law. We just have a series of consent decrees that hold us to a vastly more comprehensive set of benefits than are required by, by federal law, and it's a problem. It's a cost problem and it's a management problem for us.

• SUSAN DENTZER:

  The advocates similarly say, and I'm sure you've heard them say this many times, that the state could have done more on drug utilization review, that there could have been any of a number of changes that would have reined in some of this prescription spending growth.

• GOVERNOR BREDESEN:

  They're exactly right. There's a lot of things the state could have done over the years to have averted this. There's no "bad guys" in this thing.

  My frustration is I feel like I'm someone who is having a heart attack and lying on the ground and, you know, an advocate comes up and says, well, you know, you should have exercised more and eaten better. I say, yeah, you're right, I should have, but right now I'm having a heart attack and I need some help in getting, in getting through this.

  And there are many, many, you know, things that could have been done differently over the years but they weren't, and it's now February of 2005 and I'm facing a brick wall, and we've got to act in, in some fashion.

  What I'm hoping we'll do is over the next couple years is we will get some a these issues sorted out, we're leaving the bones of TennCare in place, and I'd love to preside over, as governor, you know, a reexpansion of the program.

  Okay. We've got it under control, we've gotten some reasonable control over the programs, you know, absent some court decrees and let's–you know–now we've saved enough money, let's start putting some money into bringing some people back onto the, onto the program.

  But I just don't know how to do that today.

• SUSAN DENTZER:

  The new medical necessity language which was drafted, the state has not yet implemented it, and as I understand it, there's an agreement that it won't implement it for the time-being. But first of all, clarify that for me. What does the state intend to do?

• GOVERNOR BREDESEN:

  Well, I mean, the state has–we asked for a strong statement from the legislature in terms of defining medical necessity and it has caused all sorts of excitement on K Street in Washington, which I don't totally understand. I have to be honest.

  What it says is that the state will pay for the lowest-cost treatment that is both safe and effective.

  It's hard for me to see how you can argue with that, with that formulation, but it's caused a lot of consternation and we've said look, you know, this is about trying to reassert some control over the program and we certainly don't have any need to implement it instantaneously. If it's a problem, you know, we offered, in trying to negotiate with advocates, we offered to say look, you know, let's set this aside and let's, you know, let's negotiate out some different language on the thing.

  But, you know, ultimately, somebody has to run this program. It's like any business or any operation in government. Somebody's got to run it, and if the public doesn't want me, they should elect somebody else to do it. But the program, the way it is now with–it's just–there's just too many, too many cooks in the, in the stew here with consent decrees and people sniping at it from the side, and, you know, we're trying to run it here, and, and, and everything else, and, you know, I think the, the first road or the first requirement of any success in something as complex as this, you gotta trust somebody to go out there and, and, you know, take the reins and run this thing, and, you know, I don't, I don't think Tennessee will ever have a governor who cares more about health care than me. I mean, I spent my whole life in the field and I certainly feel I bring some experience, you know, to the pot in doing it, and it's frustrating for me to have people say, well, you know, no, we're not going to let you run it.

  We're going to–you know, we're going to keep all these kind of chains on you because this is something that we can fix here.

• SUSAN DENTZER:

  What's worrisome to the advocates is the specific language in the medical necessity definition that would compel the demonstration of safe and effective[care] to be linked to clinical trials. What people say is that there are all kinds of stuff out there that's being done to people that has not been demonstrated to be effective in clinical trials. That's not a statement of pride on anybody's part, it's just the reality.

• GOVERNOR BREDESEN:

  Oh, that can–we all accept the notion that there are uses for pharmaceuticals, for example, for–with, especially with children, that are not specifically proven in clinical trials but are standard usage, and, you know, widely accepted usage. Nobody has any problem with those, and that, that, you know, can easily be dealt with in the language.

  You know, what we're dealing with, though, what we're trying to get at is things which are not in any way justified by either the usage of knowledgeable people, or the clinical trials that exist out there, and there's a lot of that stuff going on, going on too.

  I mean, we've just had in this country, recently, in, in this whole Vioxx issue, a perfect example of that.

  Vioxx was a drug that was a wonderful drug for people with very narrow diagnoses. They had, they had the gas–gastrointestinal problems that, that cause bleeding and they couldn't take an aspirin or, or an Ibuprofen or something like that.

  But it was used vastly more widely than that. It became the aspirin of choice and it had some terrible side effects for those people.

  I mean, that, to me, is a perfect example of, you know, the extension of a medical technique, in this case a pharmaceutical so far beyond the domain in which it's been proven and shown to work, you know, driven by advertising, driven by what patients want, and so on, you just end up with a very expensive result and in that case a very bad result from the standpoint of health care.

  You know, there is information out there in the world about what works and what doesn't work and it's not as narrow as just clinical trials. I mean, no one is suggesting that you just, you know, go back and find, and find that.

  But if you have good physicians, good pharmacists, out of an academic setting, who can review the literature, who can see, you know, what are the ways in which these things should be used? What are the ways in which they shouldn't be used? That seems to me to be a very important component, both from the standpoint of cost and from the standpoint of, of good health care, to put into what it is we're doing with Medicaid.

• SUSAN DENTZER:

  You've said that the TennCare expenditures, Medicaid expenditures for the state should be limited to 26 percent of revenues.

• GOVERNOR BREDESEN:

  There's nothing–there's nothing magic about the 26 percent number. When I proposed it last year, we were at 26 percent, and I said look, you've got to set some targets here. Let me set a target that says we're not going to, for the next three years, let Medicaid grow faster than the overall state budget.

  In other words, if our state budget grows by 5 percent, Medicaid can grow by 5 percent, and let's work at getting it down over that period of time.

  But I mean, I made it very clear to people that if the right answer is 27 or 28 or 24 or something, I'm perfectly open, perfectly open on that. But, you know, I'm a businessman and you've go to start with some goals and targets here, and, and it seemed to me that holding our expenditures to the same increase as the increase in other areas of state government, for a short period of time, was a reasonable goal.

• SUSAN DENTZER:

  And what about a longer-term look at new revenue sources for the state?

• GOVERNOR BREDESEN:

  Well, if we have the program under control, we had it even down to the growth rate of Medicaid in other states–you know, I think it's something a lot of members of the legislature would like to, would like to look at.

  Again, I'd just emphasize that when you're growing the whole program at 15 percent, when you're growing pharmaceuticals at 24 percent, there's no revenue source that remotely grows at those kind of rates. I mean, you can–you know, we could pass a billion dollars of new taxes and we'd buy a year and a half, but when it got done, we'd still have all the same underlying problems and we'd be spending a billion and a half dollars more of, more of money.

  What I'm saying here is you first of all got to get underneath what's happening, you've got to get that growth rate down. It is a very target-rich environment of things to do. There's a lot of inefficiencies in the way that Medicaid is put together, both in terms of the national program itself and the specifics of what's happening in Tennessee.

  Let's roll our sleeves up and, and, you know, do a little bit working smarter instead of just putting more money into the thing, and see where we are.

• SUSAN DENTZER:

  All of this is happening on the eve of some discussions in Washington about what to do more broadly for Medicaid across the states. The Bush administration most recently having proposed taking $60 billion out of the program at the federal level over ten years — .this is going to saddle not just you, but many governors, with some difficulties. Particularly here, TennCare will have been through this whack, then potentially face another one–

• GOVERNOR BREDESEN:

  I understand.

• SUSAN DENTZER:

  –because federal money goes away. Where is that going to leave all these people who depend on the program?

• GOVERNOR BREDESEN:

  Well, it's–it is– either of those actions are going to be problems for people who depend on the, on the program.

  My hope is that when the Congress, you know, begins to look more closely at Medicaid and the budget and these issues, that they will come down on the side of saying, look, this is something where the Federal Government and the states, they're really in this together and we've got a broader responsibility than just limiting the federal lo–role and leaving the states defend for themselves over here.

  I think as I've told other governors, the states have got to have much more creative ideas than just we want more money from Washington. And I'm hopeful that we can, you know, we can come to some ideas about changes in the program that, that–that really make it much more sustainable.

  I mean, I've described it as, you know, we have sort of about version 1.56 of Medicaid today, it's been patched and added to, and patched again over the years, and it's time to step back and make, make 2.0 here, to, to get out and really take a fresh look at it.

  I think there are principles of economics that we can apply to make, you know, get the fundamentals right.

  I mean, I believe, for example, that everybody ought to have to pay a little something for everything, that people don't value things they don't pay for, that that's the way we allocate resources in other parts of our national economy, is, is by what people are willing to pay for.

  And you can make small co-pays that are, that are mandatory, that have, you know, that involve people in the decisions about what things they–what things are important and which things are, are not to them.

  I think we should get very aggressive about paying for the most important things first.

  You know, a pregnant woman who needs to see a doctor with her baby, or someone who has high blood pressure, it's just a different medical problem than somebody who wants the latest cold medicine over here, and yet we treat 'em as all being kind of exactly equal in the scheme of things in health care.

  I think we ought to pay for what works. I think there's a lotta information out there, clinical information on what drugs work, which ones are much more expensive than other ones that work just as well, and we don't incorporate that and those are all things that–they're not rocket science, they're things that reasonable people could get together and could design a program that incorporated those, and it would be a much–it'd be a better program from the standpoint of quality an it'd be a much less expensive program. It's just time to do that now.

• SUSAN DENTZER:

  You've appointed a safety net commission–

• GOVERNOR BREDESEN:

  Right.

• SUSAN DENTZER:

  –now, to look at ways to cushion the blow to many of these groups. What do you hope will come out of that?

• GOVERNOR BREDESEN:

  What I'd like is for some people who are in the business of providing health care, some of them in government, some of them from the outside, to come back and tell us, you know, how can we make some safety nets here that, that, you know, pick up the most difficult cases, the most deserving.

• SUSAN DENTZER:

  Back to the issue of what the state stands to lose from Medicaid cuts, and, and also from the Medicare Modernization Act changes that were made and the "clawback" aspect of it [that will force states to give back some of the savings from the Federal government picking up prescription drug costs for the dual-eligible population.]How vulnerable is the state on that score?

• GOVERNOR BREDESEN:

  Look, I think the state is–we're vulnerable, and we're like, I guess a family that we've just gotten ourselves way, way to on the limb financially. We have the number one program in coverage, we have the number one program in percentage of the state budget that goes to it. I just–we can't stay there any longer, we cannot afford to be there.

  I don't know how to pay the bills if we stay there. I don't know how to continue to fund education and other kinds of important things.

  It is going to be painful to crawl back off the limb, back, back to where other states are, but I don't see any alternative for us but to, you know, to put our heads down and do everything we can to help these poor people who've, you know, been kind of held out a carrot and then had it taken away from them.

  Because, you know, we've ultimately gotta survive as a, as a state. It's going to be a tough year but we're going to get through it and do everything we possibly can to minimize the impact of this on, on real people.

  I didn't run for this job to cut back on benefits to people. I ran for the job because I want to help people, and, and I would love to have and thought we had a plan to, you know, to, to really show the nation where to go in running a good program like this. We're gonna make this work and, and, and, and minimize the amount of suffering that goes with that.

• SUSAN DENTZER:

  Is there an estimate for what the state may lose from this clawback provision?

• GOVERNOR BREDESEN:

  I don't know the specific numbers as I sit here and talk to you.

  The problem we have is Tennessee has very, very high drug costs. The state of Tennessee has the highest utilization of prescription drugs in the nation, just as a state, and TennCare is an outlier in that and has considerably greater utilization than the state as a whole.

  To the extent that the way the call-back works as it does, that it sort a freezes your expenditures in place today, we're getting them froze at, frozen at the most expensive time it possibly could have.

  It's grown out of control for ten years and we haven't begun to do the things to bring it back under control, so we stand to, to really get kind a ground up in the gears on the call-back. It's something I've made, you know, our representatives in Washington aware of, and I hope that perhaps they can, you know, they can help us so much to get a more reasonable position in this.

• SUSAN DENTZER:

  There are a lot of people out there, whether it's heads of hospitals, physicians, physician groups, et cetera, who think that what you announced in January was, if you'll forgive the phrase, and I don't mean this disparagingly, a kind of big negotiating ploy, and that you're going to find a way not to do those large cuts. [They believe] that some formularies will be put in place, or that some other means will be put in place to rein in the growth of TennCare, but not the really drastic stuff that was announced in January.

  That is their, I would say, desperate hope, if not belief.

• GOVERNOR BREDESEN:

  What was announced in January was not a negotiating ploy. Even if I had an inclination to play that game that way in other areas, I would not do it to the 323,000 people who are deeply affected by this. I mean I just–I could not bring myself to use those people as pawns in some big negotiation.

  It is where I got forced to by six months of making no headway at being able to implement the plan we originally had.

  We had last year at this time a plan that would a kept everyone on the rolls, it had the support of the legislature, it had the support of every major provider group in the state, the Tennessee Medical Association, the Hospital Association, the Children's Hospital Association.

  We were prevented from implementing that plan by the unwillingness of the people who had signed these consent decrees with the states, to relent in any way on the things that they had, that they had negotiated in those, and so I've been forced, you know, unwillingly and slowly back into a position of saying I really don't have any other choices at this point but I would never use those 320,000 people like that as a pawn.

  I just wouldn't do it. I couldn't do it.

• SUSAN DENTZER:

  Okay; great. Thank you.