NEW YORK: PATAKI’S MEDICAID CUTS COME UNDER FIRE
A day after Gov. George Pataki (R) proposed a $66.1 billionThis is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
budget "that wrings most of its cuts from the state's huge
Medicaid" program, the health care industry "began a fierce
attack on the deep cuts ... saying the reductions would be
devastating for the elderly and disabled residents of the state."
NEW YORK TIMES reports that providers said Pataki's plan
"essentially balanced the state budget on the backs of sick
people." State Assembly Speaker Sheldon Silver (D) said that "he
believed the ... cuts would force hospitals to close and would
lead to the loss of 28,000 jobs" in the state's health care
industry. TIMES reports that the "reactions presaged another
mammoth budget fight in Albany." Last year Pataki called for
similar cuts, but the state Legislature restored most of the
funding following a "blistering" advertising campaign attacking
the plan. Dennis Rivera, president of 1199, the National Health
and Human Services Employees Union, said, "We will spend whatever
resources we have to defend the health care industry" (Hernandez,
DETAILS: NEWSDAY reports that "[f]or the third year in a
row, Medicaid spending is slated for the chopping block, although
this year's $2.1 billion in proposed cuts are aimed" at
providers, rather than recipients. Pataki's budget included
$25.4 billion in Medicaid spending, which "would cut the state's
$8.9 billion share by $900 million" and "trigger roughly $1.4
billion cuts in federal and county matching funds."
$AVING$: State Budget Director Patricia Woodworth said, "No
program is as out of control as is the Medicaid program. Our
budget moves to contain Medicaid costs." NEWSDAY reports that
the "savings would be achieved through such measures as cutting
hospital payments for chronic and psychiatric care; basing
nursing home and home-care agencies' reimbursement on 'regional'
averages rather than outdated estimates, and eliminating any
automatic adjustment for inflation to fees paid to providers."
Pataki's budget also includes a proposal that would "allow the
state Department of Health to negotiate Medicaid rates with
hospitals to make the rates more competitive with private
insurers'" rates. Pataki said, "'Competition breeds quality,'
... adding that the plan still provides quality care, but at
lower cost." NEWSDAY notes that Pataki's budget plan "also
relies on a federal waiver to increase to 1.2 million the
enrollment in Medicaid managed care programs," which still needs
approval by the Health Care Financing Administration. A decision
on the waiver is not expected for several weeks
A BETTER WAY: Pataki administration officials said that the
Medicaid changes are needed "to rein in runaway costs," citing
that the state's long term care spending totaled $7.5 billion
last year, "three times as much as each of the next two highest-
spending states, California and Pennsylvania." Administration
officials noted that the state spent an average of $4,400 for
hospital visits and $1,700 for clinic visits per Medicaid patient
in 1995, "more than double the national average." Pataki said,
"It's the biggest element of state spending. Every dollar we
save at the state (level), we save at the local level" (NEWSDAY,
(Nelson/Barfield/Rabin, 1/15). Donna Arduin, Pataki's deputy
budget director, said, "We want to get rid of the patchwork
reimbursement system that has encouraged inefficiency and replace
it with a system that rewards health care providers that operate
efficiently" (TIMES, 1/16).