Medicaid and the N.Y. Budget: Sensible Cuts, and Little Political FlakNew York’s Gov. Andrew Cuomo has achieved a significant political and budgetary victory getting the state’s powerful health care providers and its major health care workers’ union to agree to live within a strict Medicaid spending limit for the next fiscal year and accept a slow rate of growth after that. Medicaid costs are a quarter of the state’s operating budget, and this agreement is an important step toward closing a projected $10 billion deficit. The governor’s Medicaid Redesign Team — which was dominated by health care providers and public officials — agreed to hold state spending on the major portion of Medicaid to $15.1 billion next year, well below the $18 billion originally projected. They also agreed to hold future growth to a 10-year rolling average of medical inflation. That is a very stringent standard. Over a recent five-year stretch, the state’s share of Medicaid spending grew by an adjusted rate of more than 6 percent a year; medical inflation has been increasing by about 4 percent. If the team can’t find the savings, the state will step in to make it happen. The redesign team approved dozens of proposals to cut spending, all of which have been incorporated into Mr. Cuomo’s budget or related legislation. The Legislature, which must enact a final budget by April 1, should adopt most of the recommendations. They are sensible and necessary. We urge lawmakers to force out a misguided cap on malpractice awards — a provision engineered by hospital leaders that would deprive many injured patients of fair compensation. The biggest immediate savings in the plan would come by cutting payments to providers and managed care companies. Those cuts would be mitigated by subsidies to help failing safety net hospitals, nursing homes and clinics to restructure, merge with more solvent institutions or close in an orderly fashion. Still, there is a risk that people in some poor neighborhoods may find it harder to get care. The plan would place new burdens on some of the state’s most vulnerable citizens — the poor, the sick, the elderly. But for the most part they were protected from substantial harm. There would be no change in eligibility standards to force people off the rolls and no wholesale elimination of benefits previously offered. Instead, there would be narrowly tailored reductions. Right now, patients who need rehabilitative services like physical, occupational or speech therapy have no limits on the amount of care they can receive. The new budget would limit them to 20 visits in a 12-month period. The goal is to reduce excessive utilization. But 20 visits might not be enough for some badly disabled patients, and an efficient monitoring process will be needed. Home care visits for housekeeping services would be limited to eight hours a week in New York City, placing more of a burden on families. Reimbursements to fee-for-service dentists would be cut, making it harder for patients to find a dentist who will take them. Medicaid patients would also be asked to pay a bit more in co-payments. Right now they pay $3 for a clinic visit or a brand-name drug. That would rise to $3.40. Right now, they pay $25 for a hospital stay. That would rise to $30. The increases seem modest, but any co-payments carry the risk of discouraging some poor people from seeking care they really need. The package contains many sound reforms, including greater use of managed care and other forms of care coordination. If done well, those steps should lower costs and, one hopes, improve treatment. One of the biggest changes in this process is political. For years hospitals and health care workers have used their clout in Albany — and high-priced advertising campaigns — to ward off cuts and reform. Mr. Cuomo pre-empted them, first by threatening to wage his own advertising campaign against them and then by inviting them to join his Redesign Team. Now instead of battling the governor, the Greater New York Hospital Association and Local 1199 of the Service Employees International Union, representing health care workers, have together initiated an advertising campaign praising his leadership and urging the Legislature to give him what he wants. It was smart to bring these key players into the effort to find ways to cut spending quickly and a real coup to get them to accept very tight spending limits. But Mr. Cuomo must be careful not to give them a disproportionate say going forward in reshaping the state’s health care system. Officials need to give patients’ advocates a stronger voice. The only patients’ advocate on the redesign team abstained from approving the package.
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