But how much health-democracy can each governor afford when balancing their budget in the face of declining revenues? According to the NGA’s 2008 Fiscal Survey of the States (published June 2008), not a whole lot.
- Health care cost increases and greater utilization of services
- The aging population and the impact on long-term care financing
- Regulatory actions at the federal level that would limit federal participation for key services
- Workforce shortages (esp. nurses)
- Hospital finances (and mounting bad debt)
- State Children’s Health Insurance Program (SCHIP) funding
- Mental health funding and access.
Health Populi’s Hot Points: The Rockefeller Institute of Government, the public policy arm of SUNY, recently published its July 2008 issue of the State Revenue Report #72 with the title, State Taxes Slow Yet Again, and Further Weakening Appears Likely — Mid-Year Budget Cuts May Lie Ahead. Topline: the state of the states’ financing is weak. The key datapoints underpinning this bleak forecast are:
- State tax collections were weak in the first quarter of 2008, rising only 1.7 percent over a year earlier. After adjusting for legislated tax changes and inflation in state and local government
purchases, state tax revenue declined by 5.3 percent.
- This is the third quarter in a row that total adjusted revenue growth showed a decline.
- Sales tax revenues produced no growth for the first time in six years.
- The underlying trend for states is negative; budget cuts and other gap-closing measures likely loom ahead.
- Inflation in state and local government costs remained above 6 percent for the first quarter of 2008, continuing a recent trend of significantly higher increases than those in the broader economy.
How you cover the uninsured and provide low-income citizens with access to comprehensive health care — let alone long-term care — under this economic scenario requires creative thinking beyond the “labs” metaphor. Governors are going to need training in yet another discipline: magical thinking.