How to save an easy $140 million in the state budget

This started off as a comment over in James' post about Doug Berger's ideas on the budget. I started to comment that Republican Pete Brunstetter had one crazy idea and one not so crazy idea.

What two things would you cut in the state budget? "I'm not a big fan of the More at Four program," Brunstetter said. "I don't think it has had the impact that justifies the cost."

He added that there needs to be some consideration of merging More at Four with Smart Start, another pre-school program.

Getting rid of early childhood education programs is so stupid I can't even comment, but the idea of merging two pre-school programs into one overhead makes sense.

But, this is where my bullshitometer went off.

If we are going to talk about saving costs by merging programs, then we have to talk about health care. Currently NC BCBS handles claims for S-CHIP while and The Division of Medical Assistance (DMA) takes care of Medicaid claims through its contractor Electronic Data Services. We are using a private company, BCBS, to do something the state is already capable of doing, process claims. Thank God for Adam Searing doing the hard work to explain why that is a bad idea.

...finds that a Health Choice claim (BCBS) costs $4.73 to process v. 96 cents for a similar Medicaid claim...So, by taking away claims processing from NC Blue Cross for children’s health insurance we could save at least twice as much, maybe four times as much, or perhaps even twelve times as much. Seems like a no-brainer to me. If one price for these savings is to simply make the benefits under Health Choice and Medicaid for kids match exactly (the main reason for MAXIMUS to recommend against this course of action), so be it. They are already functionally equivalent plans, and there is no reason kids on different health plans in the same family should have different health benefits.

It looks like there are well over 110K kids on this plan and according to this article it could save $8.4 million in just processing claims. That is not to mention the better price Medicaid gets on its prescription drugs, which they claim would save another "$7.5 million in added drug rebates".

There is one more one-time saving, that is the $3.5 million that the state health care plan holds in reserve for overruns of the S-CHIP plan. If S-CHIP is moved to the state plan this money can be released.

So, there you go $8.4, $7.5 and $3.5 million available this year for a total of $19.4 million. Of course, all of this was figured out back in 2007 so those totals are probably much higher.

But, that only brings us to $20 million, where does the other $120 million come from?

Well, just imagine if instead of just talking about the 114,000 kids in S-CHIP we started talking about these kinds of savings for the

More than 666,000 state employees, teachers, retirees, current and former lawmakers, state university and community college personnel, state hospital staff and their dependents are insured by the State Health Plan.

If 110,000 kids being transferred to DMA can save $20 million, then is it so far fetched to think 6 times that number being switched could save $120 million?


Why it will never happen.

Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.

Thanks for this, Robert.

I'm sure that your ideas make too much sense to ever happen.




I think Blue South

does a good job of pointing out that we need big, bold changes that are best for the people of North Carolina and that the legislature is full of chickens who would rather do half-measures and people-paining service cuts.

Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.

Creative Solutions

Thanks Robert. We need creative solutions like this to at least be discussed and debated.

"Keep the Faith"

Health Care and Tobacco

Put this together with what I wrote over on your post about tobacco and I'll bet the real change in revenue would end up being around +$700 million. Add in a stoppage in all new state construction for one or two years and you'll round up another pack of money. Do away with all the tax caps on vehicles that you mentioned the other day and Bob's your Uncle you've got some more money.

Close loopholes, check.

Freeze spending, check.

Merge agencies, check.

Quit wasting time and resources in legislature on local issues, which no other state in the union does, check.

Add another 10 cents in tax to gasoline, check.

Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.

Washington State, not chickens.


Olympia, WA – At a hearing today of the Washington State Senate Health and Long Term Care Committee, the actuarial firm Mathematica Policy Research will present a new study showing that Washington state could cut health care costs from $300 million to $800 million and boost economic activity anywhere between $370 million to $1.6 billion from a range of comprehensive health care reform initiatives proposed last year by state lawmakers.

It's not just Washington State, other states are seeing how they could save money and increase economic activity.

In 2007, a study by the Lewin Group found that Healthy Wisconsin, a comprehensive health care plan sponsored by Wisconsin State Senator Jon Erpenbach would save the state $13.8 billion in annual health care expenditures. A similar partnership-style bill, the New York Health Plan, was recently introduced in New York by Assemblymember Richard Gottfried and is expected to achieve similar savings.

Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.