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ONE-ON-ONE - June
2003
by Ed G. Lane
'The People Have to Demand More
Restraint in Government Spending'
Lt. Governor Steve Henry talks about his frustration with the current
state of Kentucky's government and his vision for the future
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Stephen L. Henry,
M.D.
Stephen L. Henry, M.D., is the only physician ever to be elected
to the office of lieutenant governor in Kentucky. A graduate
of Western Kentucky University and the University of Louisville
School of Medicine, Dr. Henry has garnered international acclaim
for his work as an orthopedic surgeon, particularly for his
development of antibiotic “beads,” a breakthrough
technique in treating wounds that has been utilized by the U.S.
military. Though he closed his private medical practice upon
being elected lieutenant governor, Henry continues to perform
charity work at the University of Louisville Hospital Free Clinic
on a regular basis. As a physician, Henry has provided an important
perspective on healthcare in Kentucky and has been at the forefront
in addressing the alarming increase of diabetes and obesity
in Kentucky’s children and youth as well as other health
concerns facing the state. Henry has also played an active role
in developing state policy on education and veterans’ issues.
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Ed Lane: What are your thoughts about the Republican and Democratic
candidates for governor – Ernie Fletcher and Ben Chandler?
Steve Henry: It’s going
to be a very competitive race. The Republicans had a very strong primary
in which there was a decisive win. Ernie Fletcher is going to be a
very difficult candidate to handle from the Democratic side. When
you look at the Democratic primary, Ben Chandler, the candidate that
was the odds-on favorite to win by a very large margin, was only able
to squeak out a very narrow win.
EL: It appears that the Democratic
Party may be split. What is your assessment?
SH: The Democratic Party has
been split. The Chandler faction prosecuted the governor over some
issues, which was a waste of taxpayer dollars. That created a split
between Chandler’s people and the Patton administration.
EL: The newspapers labeled
Chandler as the “maverick” of the Democratic Party. Would
you say that he’s a maverick?
SH: If it means Chandler’s
gone his own way, even to an excessive point, that’s probably
true. Sometimes that’s good, sometimes that’s not good.
You have to look at it in context. The voters are going to have to
make a decision based on the record of what he’s done, how he’s
done it, and for what reasons he’s done it.
EL: As lieutenant governor,
initially you were the frontrunner to be the candidate for governor.
What issue do you feel most severely impacted your electability and
caused you to decide not to run for the governor’s office?
SH: As lieutenant governor,
I probably was a frontrunner. In that situation, you have to be very
cautious about anything you do. When you’re the frontrunner,
you’re going to be attacked – all the way to the ridiculous
charges about our wedding. I went through a lot of accusations, none
of which were true. Even the politicians, such as Ed Hatchett, the
state auditor, couldn’t find anything. He then referred the matter
to the ethics people, who couldn’t find anything. We were fully
exonerated on that issue.
Then you look at the other
attacks – my billings at a charity hospital for taking care of
Medicare and Medicaid patients, virtually working for free. What money
I received, I gave back to the “Bucks for Brains” program:
$100,000. Not many people have ever been made aware of that fact.
EL: Let me interject a question
here, just for clarification. Are you basically saying that while you
were lieutenant governor, the fees for any medical services you performed
were contributed to the “Bucks for Brains” program?
SH: I told the University
of Louisville I didn’t want to accept a salary for anything I
did while I was lieutenant governor. The ethics opinion said that
I could take my salary. In fact, there is a certain exemption in the
law permitting members of government to go back to universities and
teach. They feel they should be compensated for that because those
services are usually performed at nights and on weekends. That’s
when I performed my surgeries – on the weekends. And I do the
charity clinic for free – something for which other doctors get
paid. I volunteer there; we see approximately 40 patients every Monday
morning. Government officials ought to be good examples of volunteerism
because we expect other citizens to do that. In addition, I did not
keep any Medicare/Medicaid money I received for any work I did. Four
years ago, before any issue came up with regard to Medicare/Medicaid,
I agreed to donate $100,000 during the period that I was lieutenant
governor to Western Kentucky University’s “Bucks for Brains”
program. We calculated how much Medicare/Medicaid money I would earn
while in office. That way, I would not receive any government funds
so no one would criticize me for double-dipping, even though I earned
all the fees.
The personal attacks are outrageous,
when you understand all the facts.
EL: What about the allegation
that some billings for surgery were performed under your name, but at
the time of the operations you were attending an event somewhere else?
SH: Absolutely, and it occurred.
There are 30 patients who I’ve never met before. Don’t know
who they are. Never touched them, never saw them, never had anything
to do with them.
EL: Over what period of time?
SH: Oh, probably six years.
I don’t know how you attribute that to Steve Henry other than
to say that the hospital’s accounting system incorrectly billed
these services under my number.
EL: Did problems that Gov.
Paul Patton experienced impact your campaign?
SH: Even after the personal
attacks, I was prepared to run for governor. I felt that the people
understood what I was about and the true political partisanship of
the attacks against me. But, when Gov. Patton had his problems, it
created a situation with the members of his administration. Even the
governor might be indicted. I was not going to be indicted –
I had no fear of that. But, it was the environment that was problematic.
I’d look to my right and my left in the Capitol and there would
be trouble on both sides. In that situation, I felt our campaign could
never successfully distance me from the Patton administration. You
have to defend yourself and get out your message. With millionaire
Charlie Owens in the race and the potential of Bruce Lunsford being
in the race, running for governor was just not something I felt financially
comfortable in doing.
I still consider myself fairly
young. I’ll be 49 this year. Hopefully there will be another
day that I can be involved in the political process.
EL: How much influence did
your wife, Heather, have on your decision not to run?
SH: Heather would have been
a tremendous asset as first lady of this state. It’s unfortunate
that the Patton administration has not utilized her more. On an almost
weekly basis, either the Office of Veteran’s Affairs in Washington
or a state asked Heather to do PSA spots, yet Kentucky never utilized
her. That’s the politics here. It’s very unfortunate.
Heather and I did talk about
running for governor and it was a mutual agreement that we’re
starting a family. We’re tired of the personal attacks. It’s
time to have a family and time to have a life. Both of us are very
disenchanted, very discouraged by what occurred in Frankfort and the
inability of the legislature to move on very important issues.
EL: Some of the impasse in
the legislature was the governor’s threat to veto any budget that
didn’t provide public financing for the gubernatorial race. This
was prior to the November 2002 election. After November, the General
Assembly met and passed the new budget without public financing. Do
you feel the governor should have held the line on the public finance
issue and delayed passage of the budget as long as he did?
SH: I’m not trying to
be negative or positive, but the Republicans were very effective in
portraying public financing as welfare for politicians. I disagree.
A lot of people believe that
public finance makes sense. Even some in the national Republican Party
have agreed in principle that we need to do something about campaign
finance – to keep the government from being for sale. But in
Kentucky, again for political reasons, it suited the Republican Party
to disagree with the national philosophy of John McCain. They articulated
it in such a way and the governor did not respond effectively. The
Republicans won that political battle.
EL: If you were the Democratic
candidate for governor, what would you consider to be the main issues
in the race?
SH: No. 1 would be healthcare.
When I endorsed Jody Richards, I did so because I’m looking for
a candidate who will do something about the healthcare issue. We need
to create a position such as a surgeon general – a person that
wakes up every morning asking him or herself, “What am I going
to do to make the plight of healthcare better in Kentucky?” Kentucky
has the highest utilization of healthcare in the nation – No.
1 in lung disease, top of the nation in heart disease. We have to
do something about those issues. Utilization of healthcare increases
the cost of healthcare insurance and worker’s compensation.
The health czar would oversee
the cost of health insurance; make sure that Kentucky had some type
of assistance program for our senior citizens; and make sure Kentucky
had “right to know” legislation on healthcare issues. For
example, the benefits Kentucky veterans lose each year is well over
$100 million.
Another issue is a tobacco
tax. Kentucky needs to help its farmers, but increasing the tobacco
tax is going to have very little to do with how much our farmers are
going to get for their tobacco. A tobacco tax would create $600 million
if you matched it with Medicaid dollars.
Those are some of the issues
I would push. I would bring as much federal money back to the state
of Kentucky as I could and make sure we would decrease the cost of
health insurance costs, which would help small businesses.
EL: Do you feel like competition
among health insurance providers is getting better, now there are more
companies doing business in Kentucky?
SH: Kentucky lost a significant
number of insurance vendors. Back in Ohio County they say, “If
you only have one grocery store in town, you’ll never have coupon
days.” You’ve got to have competition. We have no competition,
in effect, in Kentucky.
We’re trying to entice
companies to come back, but the attorney general’s office has
been extremely difficult. Kentucky has the most punitive health insurance
laws in the nation and he has not sought to change them. I have traveled
throughout this nation meeting with CEOs of major insurance companies.
They consistently tell me that Kentucky’s laws are highly punitive.
They ask why they should operate in a state like Kentucky – which
is a small market, not very profitable, and has high utilization.
On top of that, the attorney general has the capability to go back
and say, “Oh, even though we approved your rate, we can now go
back and change our minds and say that that rate was too high and
we’re going to assess you and ask you to refund the money.”
What business in the world is going to invest in that kind of environment?
EL: After the Kentucky General
Assembly approved the reorganization of Anthem Blue Cross/Blue Shield
of Kentucky, the attorney general came back and sued Anthem for surplus
reserves of about $50 million. Was it appropriate to sue Anthem after
the General Assembly had approved the transaction?
SH: Oh, absolutely. But the
disagreement I have with Ben Chandler over that is, whose money is
that? Where is that money now? What’s it being used for? Whose
money is it? That’s my money, that’s your money. Why didn’t
Ben Chandler give it back? Instead it’s being used for a fund
that generates nothing, that hasn’t generated anything productive
yet. It’s hired a few people, it’s there to talk about healthcare
initiatives. What has it done? That money should be used to decrease
the cost of health insurance to our people, and it’s not.
EL: What other health issues
are facing Kentucky?
SH: Another major issue is
childhood obesity/childhood diabetes. Kentucky has record numbers,
all-time high, childhood obesity problems. We’re leading the
nation in this. We’ve changed the name of the disease from Adult
Onset Diabetes to Type Two because it’s so prevalent in our children
today. Coca-Cola is a wonderful product – I drink it – but
it should not be taking the place of milk in schools. We don’t
need cola or pizza in schools – it’s foolish. We invest
$120 million a year into K-CHIP, so our children will have health
insurance. Well, they will need it because of what we’re allowing
them to eat in schools.
EL: How did Gov. Patton relate
to your recommendations on healthcare?
SH: I’m very frustrated
that we don’t have somebody directly reporting to the governor
on healthcare on a weekly or monthly basis. The governor understands
economic development, but he does not understand healthcare. It’s
been a frustrating experience to go in and tell him these managed
care initiatives will not work – the waivers you’ve got
out in the state will not work with managed care. And yet he goes
on and wastes millions of dollars with it. It’s been frustrating.
EL: The Democratic Party has
controlled Kentucky’s legislative and executive branches of government
for most of the last 100 years. Is it time for a two-party system in
Kentucky?
SH: As long as you don’t
have obstructionism in politics, anything is fine. Over the years
you’ve had liberal Democrats and conservative Democrats. What
you didn’t see in those scenarios is a situation where people
weren’t passing legislation.
EL: At the end of several
fiscal years during the Patton-Henry administration, Kentucky had huge
surplus tax revenues. Do you think that both Kentucky’s executive
and legislative branches are responsible for spending all the tax surpluses?
SH: Both bear the responsibility.
In government, it’s difficult to save money because the politician
that follows behind you is going to spend it. The people have to demand
more restraint in government spending. When you have surpluses, it’s
all too easy for everybody to spend it. The difficulty exists in preparing
for a rainy day.
EL: Kentucky’s general
revenue fund increased from $4.512 billion in 1993 to $6.560 billion
in 2002, a 45 percent increase over 10 years. Is the failure of government
to control spending the main reason most Kentuckians feel that reducing
the size of government is more appropriate than raising taxes?
SH: We need to reassess the
expansion of government. But my point is that after a thorough assessment
of government, taxpayers won’t feel that politicians are wasting
money. They may be receptive to a selective tax like one on tobacco.
Can government be more efficient? Absolutely. There’s no question
about it. Should it be reorganized? Absolutely.
EL: That’s in Kentucky?
SH: Yes, that’s in Kentucky.
Sadly, all we’ve seen are cosmetic measures, like eliminating
the lieutenant governor’s budget. In this state, the lieutenant
governor can really make a difference. Two initiatives I’ve taken
to aid in expense reduction and bettering the lives of Kentuckians
include helping provide gun locks at no charge to our state’s
households. After that program was instituted, the number of Kentucky
children who were shot went down substantially. The initial expense
is minor – the healthcare savings alone are substantial. We had
one child accidentally shot last year that had severe brain injury.
That’s going to be a cost to the public forever. There are tangible
benefits to plans like this.
The other issue we receive
hundreds of calls every month about is veterans benefits. Last year
alone we asked for more than $1 million in benefits from our Veteran’s
Service Organization in Washington. As a result, we’re getting
benefits for our veterans.
We showed our legislators
these and the other positive measures we had taken to improve life
for all Kentuckians – and these positive stories haven’t
appeared in the newspapers, unfortunately. Stories like the one on
our prescription program, which generated over $1 million already
in prescriptions for Kentucky’s senior citizens. This is medicine
that would not come to Kentucky’s senior citizens if they were
required to purchase it.
When they want to talk about
the lieutenant governor’s mansion, that they said had been closed
for a year. That was not true. We had personnel tied to that, who
have been cut out in future years for the next lieutenant governor.
That is a mistake. The next lieutenant governor should live in the
Old Governor’s Mansion, just like every other lieutenant governor
has. Kentucky has been acknowledged by 100 programs nationally, for
having the oldest official residence in use in the nation. The first
floor of the mansion is a museum and attracts tourists: It is the
oldest official home in the nation in use. It’s older than the
White House and it’s a treasure.
EL: Another issue that has
received a great deal of attention is “personal service” contracts.
Do you feel that criticism of using independent contractors (persons
and firms) versus government employees is justified?
SH: Government needs the flexibility
to recruit the best people to do the best job. But unfortunately,
we’ve gone past that. Personal service contracts are ways and
means to pay for a political system that needs to raise large amounts
of money to support candidates running for government office.
Again, I go back to campaign
finance reform. Kentucky led the nation in something that was very
workable. We just need to bring that national Republican agenda to
Kentucky.
EL: To budget and manage government
expenditures, state government uses fund accounts instead of cost accounting.
Would changing the method of accounting for services rendered by government
be beneficial to evaluate its efficiency?
SH: We need more economic
science in government. As a scientist, I publish articles justifying
what’s done, the cost of medical treatment and that treatment’s
outcome. Government ought to have more economic science in its accounting.
If you change an economic policy, what’s the outcome? So yes,
better accounting and the ability to make an economic assessment would
be beneficial.
 EL:
Heather, your wife, the 2000 Miss America, is considered by many pundits
to be an exceptional political asset to you as well as a potential candidate
for political office. Is there a possibility that Heather may run for
political office in the future?
SH: Unfortunately, the day
we came back from our honeymoon, my political opponents were waiting
in ambush. There’s no question Heather is amazing. As Miss America
she was a 25-year-old young lady who had the maturity level of a 50-year-old.
There’s no question she’s an asset. She was willing to come
back to Kentucky and give her life for the benefit of others without
any type compensation whatsoever. Yet, when we came back there was
nothing but an all-out assault on us and our families. Heather has
such a love of people that one day she’ll get in politics. But
for now, we’ve got a family to raise. Today she’s not interested
in running for public office, but one of these days I’ll stay
home with the children or the teenagers and I think Heather will be
more likely to get involved.
>EL: You are considered a world-class
orthopedic surgeon and you’ve invented products that help to prevent
infections after operations. Are you pulled between spending time in
your medical practice and staying in the political arena?
SH: As a trauma surgeon I
can make a phone call and immediately have patients to help. So, on
a weekend I can go in and work. That’s a wonderful opportunity
for me. I do the charity clinic every Monday morning because it allows
me to keep and hone my skills. It allows me to get away from politics
and do something very tangible, where I immediately see results from
my work. The charity clinic is valuable to a public servant. You see
people that can’t afford their medicine. You see the full spectrum
of problems in society. You see spouse abuse, child abuse – you
see it all. No matter what happens, I’m going to try to work
at a clinic like that for the rest of my life. The people of Kentucky
will have another opportunity to say Steve Henry did a good or a bad
job. I feel certain that I will ask the people of the Commonwealth
if they want to hire me for another job some day.
EL: After all the negative
issues, why would you run for office again?
SH: When I was a page for
Julian Carroll in 1972, I remember that he said, “The price men
pay for indifference is to be ruled by lesser men.” What that
meant to me is if an “A” student won’t run, a “B”
student will. If a “B” student won’t run for government,
a “C” student will. We have to take the personal attacks
out of politics, because why in the world would a decent person want
to put his family through the political process in Kentucky? If the
media continues to tear politicians down, then our children will never
want to go into political work at all. The word “politician”
has become an epithet. I thought Nunn’s and Chandler’s conduct
in the primary was reprehensible. We have to be more respectful of
our political process.
EL: Is there one thing you
did that you really wish you hadn’t done?
SH: Had I known of the demise
of the Patton administration and what was going to happen, I probably
would have headed out and run for another office sooner. I would’ve
gotten out of the administration as fast as I could.
Ed G. Lane is chief executive of Lane Consultants Inc. and publisher
of The Lane Report.
edlane@lanereport.com
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