John Zerwas: The TT Interview

No one questions state Rep. John Zerwas' conservative credentials. Which is why the Simonton anesthesiologist and three-term Republican has gotten away with filing the House's first bill to implement a key piece of the federal health-care reform law (the health insurance exchange) — and being the first in his party to openly suggest that dropping out of Medicaid wasn't such a great idea after all. Zerwas sat down for an interview with The Texas Tribune last week to talk about how the sweeping Medicaid rate cuts in the proposed budget will affect doctors, what the recommended expansion of Medicaid managed care will do to hospitals, and what will happen if lawmakers don't create a central health insurance marketplace for consumers this session. (Hint: The feds will do it for them.) An edited transcript and audio clip follow. 

TT: You’re a staunch Republican, but you’ve filed a bill to implement one of the most pressing aspects of the much-maligned federal health care reform law, a health insurance exchange. What is it, and why did you file it?

Zerwas: It is still somewhat questionable as to what Obamacare will look like. It could be repealed completely. Our position is, the health insurance exchange could be a valuable thing for Texans regardless. [Under the federal reform], we have to have a health insurance exchange developed, tested and approved by the Health and Human Services secretary by 2014. Being that we only meet every other year, this has to be the year we get it done. My overarching concern is, if we don’t do it, there are provisions that say that the federal government can do it. I will be quite frank: It is a frightening thought to me that the federal government could come in and regulate a portion of our health insurance industry. In the spirit of our 10th Amendment rights, I don’t want to cede anything to the federal government.

TT: Several of your colleagues have filed legislation to prohibit the state from implementing health care reform — including one measure that would make it a criminal act for a state official to try to implement health reform. Would that make what you’re doing now illegal?

Zerwas: Well, what I'm doing here is really going down the road of trying to put together something that is beneficial to Texas regardless of whether Obamacare continues to develop and be implemented. The primary vehicle has to be in place to manage people into the right health care plan, whether it’s Medicaid, CHIP or some other non-state-funded plan. The health insurance exchange has some potential value to citizens, because it’s a place they can come to better understand what’s involved in the purchase of health insurance. We’ve run this idea, as well as the legislation, up the flag pole.

TT: Let’s talk Medicaid. In the midst of Texas making big headlines for some lawmakers’ suggestions that the state should drop out of the federal program, you were a cooler head. What’s your rationale on this?

Zerwas: There’s a lot of political rhetoric around dropping out of Medicaid; that’s something of a headline grabber. There is some truth to the fact that we cannot keep up with this program. At the pace it’s growing, we’re not going to be able to match that revenue without compromising areas like education and public safety. But short of a lot of federal things that would have to change, the transformation of Medicaid is a very difficult thing to achieve. We have a portfolio of strategic initiatives we as a state need to have our representation in Washington take up, such as, we don’t get a fair allotment in the federal matching program to support the level of poverty we take care of.

TT: You’ve got your own special credentials in these debates because you’re a doctor. As a health care provider, what are your thoughts on the current budget proposals that would cut Medicaid provider rates 10 percent? 

Zerwas: It’s something that gives me serious concern and pause. We already only have about 42 percent of doctors accepting new Medicaid patients. I have a lot of concern at that level that we could see a substantial decrease in access to providers, physicians and so forth because of that. The magnitude of the decrease in payment to providers that we would have to put in place in order to meet the budgetary requirements — it gives everybody a sense of how dramatically the recession has in fact affected the state of Texas.

TT: What are you thinking on the proposed expansion of Medicaid managed care to different regions, and eliminating the hospital carve-out?

Zerwas: I think managed care is one of those areas where we have been able to rein in the cost of health care. It’s probably something that doesn’t have to be studied anymore; we all know it works and why it works. The fact that we don’t have it in certain parts of the state, for whatever reasons we try to justify it, is probably not valid for the most part. If there are substantial savings, without compromising access and quality of care, then it’s a reasonable way for the state to go to rein in its costs. 

TT: The budget includes little to no funding for population growth and the increased enrollment Medicaid is almost certain to see. These are people Texas is legally required to cover — so where do we find the additional funding?

Zerwas: I think this budget process has been a bit of a shock for people, and that’s a healthy way to begin. There’s going to be a tremendous amount of dialogue and input given into this before May comes and the ultimate budget is laid out. I’ve been very open in saying that, to the extent Rainy Day funds are available, they need to be used.

TT: It’s been suggested that you’re the health care conscience to guide Texas through this reform firestorm — the steady hand that balances political rhetoric with the requirements of federal reform. What do you say to that?

Zerwas: Obviously I’m somebody that lives in the health care world, and I have a specialty in particular that puts me into the area of health care that consumes more of the revenue, and that’s the hospital setting. The question I want to answer is, what can we do, from the state’s perspective, in order to not compromise the safety net of hospitals, yet encourage people, through financial incentives, to get a little bit more mileage out of what they're doing?