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News Release from Comptroller Susan Combs

For Immediate Release
April 6, 2011

Combs Report Examines Soaring State Spending for Health Care

(AUSTIN) — In fiscal 2009, Texas state government spent about $30.2 billion on health care, a 36.1 percent increase from fiscal 2005. A new report by Texas Comptroller Susan Combs examines where health care dollars go and why costs are soaring, and analyzes various cost saving proposals the Legislature is considering to meet the state budget challenge.

“Health care accounts for more than 34 percent of all Texas government spending from state, federal and other funds,” Combs said. “The state cannot afford to let cost increases consume more and more of our budget. I hope this report will provide useful information and guidance as the Legislature makes difficult choices to rein in costs and deliver services more efficiently.”

In fiscal 2009, more than 50 state agencies and institutions of higher education spent money on health care. The largest share of such spending is for programs such as Medicaid for the poor, disabled and elderly; mental health services; medical benefits for state employees and retirees, and health care for prisoners.

“In our report, we focus on the largest categories of health care expenditures by state agencies and identify the major cost drivers for each,” Combs said. “By focusing on these programs, state lawmakers can more effectively control costs without adversely affecting the delivery of vital health care services.”

Some of the health care cost drivers Combs’ report identifies are costly new drugs and increased drug usage; a shortage of health care professionals; an aging population; lifestyle choices such as smoking, overeating, inactivity and alcohol consumption; increasing Medicaid enrollment; rising insurance costs and uncompensated care for the uninsured.

Combs’ report looks at a number of cost saving proposals, including expanding the use of managed care in the Medicaid program; instituting a statewide smoking ban; requiring state employees who use tobacco to pay more for health insurance than non-users; and requiring state employees and retirees to pay a greater share of the cost of their health insurance benefits.

The Health Care Cost Drivers in Texas report can be found on the Comptroller’s website at http://www.window.state.tx.us/specialrpt/healthcare/.

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