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Tuesday, October 27, 2009

Live Blogging the "Stop the Spending Summit"- John Stephen

John Stephen- Former Commissioner, New Hampshire Department of Health and Human Services

Stephen says his experience as Commissioner of the state's largest department convinces him that New Hampshire doesn't have a revenue problem; it has a spending problem.

He's worked as a consultant in other states, and says New Hampshire should adopt the best practices nationally to control spending. He says there isn't a lack of will to reign in government, but that the "tyranny of custom" prevents new, innovative ideas from taking hold.

Stephen says the state accounting system prevents managers from getting good information. He says New Hampshire is being left further behind other states, which have improved how they deliver services. Catching up would allow New Hampshire to lower its high business tax burden.

He says New Hampshire should be a leader in innovation. He says the state had to both decide if its should provide a service, and be sure it knows how to measure the outcome. He suggest a top to bottom review of state government.

Stephen says Medicaid spending increases from 2004 to 2007 averaged 1% per year, down from double digits averages in previous years. That shows that there are savings to find.

Stephen wants departments to submit 5% reduction budgets each biennium, a constitutional amendment to give the Governor a line-item veto, a cap on dedicated funds. He says services, such as legal departments, can be consolidated across state departments.

He argues that current law mandated a "maintenance budget" prevents departments from cutting unnecessary programs. New Hampshire is one of just seven states without a line-item veto. He points to efforts in New York and Wisconsin to consolidate financial management, human resources, and other overhead services across state departments.

Stephen says capping the more than 250 dedicated funds in the budget would give the Legislature more flexibility over the budget, rather than walling off millions of dollars in fund surpluses.

He says Lousiana has done great work on transparency through LaTrac, and proposes New Hampshire do the same.

Stephen says popular but unnecessary programs should be cut, and that the state incurs huge indirect costs through its contracts, which are not reviewed by the Legislature. He wants to state to divest itself of unused buildings and property, and cut down on the vehicle fleet. He also proposes eliminating the Certificate of Need Board.

He says policy changes in Medicare and Medicaid would save the state money, and proposes giving all departments the same flexibility that he used at DHHS. He says the Legislature has to eliminate programs if they can't demonstrate or measure their results.

Stephen says New Hampshire spends more per beneficiary than the national average for a range of health services. Other states have adopted a managed care approach to lower costs, while maintaining patient choice. He says these reforms have allowed Oregon and Texas to lower their state medical costs by managing the disease rather than responding to emergencies.

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