Redesigning Medicaid: One Lawmaker Explains the Challenges

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The Medicaid Redesign Team is holding their first public meeting in Albany on Thursday to begin tackling one of the thorniest problems facing the new governor: cutting the cost of the program without facing a backlash from health providers or patients.

The challenges facing the group are daunting. Aside from coming up with a consensus — which observers say may not even happen — the timetable for enacting any solution won’t yield immediate results. Federal approval is required. And the scope of their options is limited.

“Many of the ideas that get put on the table don’t necessarily save a lot of money,” said Assemblyman Dick Gottfried, a Democrat from Manhattan and a member of the 27-person team. “Many ideas take a year or two to implement so they don’t do you any good in this year’s budget.”

According to Governor Cuomo, the state's Mediciad program "spends more than $53 billion annually" on 4.7 million residents.

In 2009, when the program cost only $49.2 billion, it was dubbed "the nation's most expensive, by far," according to analyst Paul Howard of the Manhattan Institute, a fiscally conservative think tank. At the time, New York's Medicaid cost represented 14 percent of the country's total Medicaid budget, according to Howard.

For months, Cuomo said health care, in addition to education, are two areas where state spending needed to be reduced.

During the campaign, Cuomo said he would look to reduce the cost of the program through a mixture of stronger enforcement of state laws to regulate premiums, and seeking additional "subsidies" from Washington. Cuomo also advocated "better" management of the New York State Health Insurance Program, raising "employee contributions" and creating a new, less costly pension tier for state workers. New York Post state editor Fred Dicker said on his radio show Thursday morning that the fight to control state spending will be a "brutal war" that will "attract national attention." His guest, historian and political observer Fred Sigel concurred.

Everyone recognizes the importance of reducing health care and education costs to Cuomo's agenda. But enacting the kind of structural changes Cuomo needs may not happen for years. 

Gottfried said, only somewhat jokingly, “In New York, it takes a year or two to do almost anything more than change a light bulb.” On top of that, "almost any change in Medicaid takes a year or more to get federal approval," Gottfried said.

Gottfried, who was first elected to the Assembly in 1970, representing Chelsea, Midtown and Murray Hill, said the changes to the federal health care legislation will “reward” health care providers in the long run “for outcomes rather than the volume” of procedures they conduct on patients.

But even if that legislation were enacted tomorrow, “it will take at least a year or two before the first [preventative health care providers] are up and running. It will take longer than that for those organizations to have a significant effect on health care economics,” said Gottfried.

“Again,” he added, “that’s not going to save Medicaid money in 2011.”

The public’s distaste for expensive government programs, he said, would make it easier to get support for cutting Mediciad — something that usually puts politicians in opposition to their own constituents.

“This may be a year in which you might be able to get more public support for cutting the financial support to the health care system. That doesn’t make it the right thing to do,” he said.

“And when the tv ads start running about cutting off money to grandma’s nursing home or the hospital you might go to in an ambulance, people’s feelings will begin to shift.” (It's worth noting that the group which ran those hard-hitting against against Governor Cuomo's predecessors, Governors Spitzer and Paterson, was 1199 SEIU, whose president is now a member of the Medicaid Redesign Team.)

Gottfried said wants the team to consider a wide range of options, including raising taxes.

“My problem with some of the quote ‘hard choices rhetoric’ is that while the governor in talking about the Medicaid redesign team says there must be no sacred cows, he starts off the budget process by announcing that the most important potential action is in fact a sacred cow that is off the table, and that is bringing in more money from new Yorkers who have the wealth to enable them to do more. I think New Yorkers across the board, including wealthier New Yorkers would understand that that’s the right thing to do.”

He added, “I say that as somebody who represents more wealthy New Yorkers than almost anyone else in the Assembly. My district is probably the 10th wealthiest of the 150 Assembly districts.”