Lt. Gov. David Dewhurst says he wants to save Texas money and improve patient care by overhauling how doctors and hospitals are paid — with carrots, not sticks. In an interview with The Texas Tribune, he talks about what he believes is at the root of the state's — and the country's — health care crisis and how his proposed solutions are nothing like the federal health reform law. An edited transcript is below. 

TT: This isn’t your first go-round with health care payment reform. What’s the history behind your efforts to institute new funding mechanisms for health care providers?

Dewhurst: In 2003, when I came in as lieutenant governor, I saw that Medicaid was costing the state of Texas almost 25 percent of the budget and that health care costs for the vast majority of Texans were increasing each year. Then, in June 2004, at a Harris County Medical Association dinner, a group that probably represents 25 percent of our doctors in the state, I heard them echo my concern of ever-increasing health care costs. In 2006, I worked with my staff during the interim to come up with the best thinking on how we could improve health care for state employees and teachers, as well as the 8 percent to 11 percent of the population on Medicaid at that time. Our intent was to come up with savings through greater efficiency, by working with our hospitals and our doctors to create some monies which we could use to cover the uninsured, and lower the cost to our hospitals for indigent care. Our legislation, which had a number of incentives to try and propose healthier lifestyles, passed in 2007. Shortly after that, I became convinced that health care, because of its overwhelming importance to every individual, had to be improved, lest we face a national crisis. 

TT: And what, in your mind, is this impending crisis?

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Dewhurst: We spend more per capita on health care than any other country in the world — and 2.5 times more than the average. We spend something like 170 percent more per capita for health care in America than the country that spends the second most. Yet our outcomes are not significantly better. We’re doing it all wrong. We’re the only country I know of out of the 31 developed countries in the world that pays doctors and hospitals principally for how many procedures they do to you. The other developed countries pay for good medical outcomes. How much more valuable is it to keep someone well by paying doctors more to sit and talk to you to convince you to change your behavior? This is potentially one of the most important things I’ve ever done — to try to push us in Texas to try and reward our good doctors and hospitals with free market incentives that focus on outcomes.

TT: What happened last session?

Dewhurst: In the summer and fall of 2008, we drafted a series of bills focusing on paying doctors and hospitals more for having electronic records and good medical outcomes, for spending time focusing on wellness, for employing incentive-based demonstration projects in the free market, in the Employees Retirement System. We wanted to get the doctors, the patients, the hospitals aligned on the same side of the table. That legislation passed out of the Senate unanimously and got out of House Public Health, but it was one of 200 plus or minus bills to get caught [behind voter ID].

TT: How are your proposed incentives different from some similar proposals outlined in the federal health care reform you and other state leaders vehemently oppose?

Dewhurst: I believe that we’ll end up with healthier Texans and save money that we can use to assist the uninsured in Texas if we have clinical integration, electronic medical records, pay-for-performance and follow best practices in wellness. But I’m a big free-market advocate. The state isn’t requiring anything. We’re not mandating anything. I’m against mandates. I always supported a full repeal of “Obamacare” because it’s not a health care bill; it was originally structured as an insurance mandate bill. I oppose any state or federal government takeover of our health care system. Obamacare is more an insurance mandate bill while mine is a market driven effort to improve Texans’ health through incentives.

TT: How does payment reform tie into the budget shortfall Texas is facing? Does it affect Texas’ ability to institute these changes?

Dewhurst: They’re not related to one another — and I’ll say again, this budget is a starting point. I am worried that if we don’t make a substantive change for the best, we’ll wake up 10 to 20 years from now, and America will be more broke than Greece or Portugal. Sitting in front of us is an obvious partial solution. There’s no tax increase; it’s just the contrary. It saves money. There are no mandates, either individual or business. It’s a no-brainer. We’ll let each individual group figure out a model that works for them. 

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