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HEALTH CARE Governor Spitzer’s Health Care Proposals: Radical Surgery, Arthroscopic Surgery or Just Another Band-Aid? Where is Universal Health Care? As usual, funding for health care and education are the focal points of debate in this year’s state budget. Health care by far the bigger of the two, has drawn the lion’s share of controversy, including a multimillion dollar TV ad attack campaign funded by the hospitals and the 1199 SEIU health care union. Governor Spitzer has proposed what many are calling the best health care budget in decades. He is calling for universal health care for children, and a reduction in the number of the uninsured. But while he outlines key issues related to accountability for health care financing, he fails even to suggest a comprehensive solution to the problem he outlines. Spitzer also fails to outline any process for moving the state toward health care for all despite strong public support for such measures. The Governor argues that he first has to put the state’s health care finances in order before he moves on the broader issue of universal health care. But since much of the health care financial problems grow out the way we pay for health care for the 2.6 million uninsured (5.5 million over a year’s period), it is difficult to see how you can solve one without solving the other at the same time. While Governor Pataki often proposed deep cuts to Medicaid funding, including for both hospitals and poor patients, the legislature usually rejected the cuts after intensive lobbying by a broad based coalition of those negatively impacted. Most attribute this to the political power and money of the 1199 union and NYC private hospital alliance. That clout was most notably expressed in the unprecedented January 2002 deal when the Governor and State Legislature gave a billion in state dollars to support a pay raise for 1199 workers, who turned around and endorsed Pataki in his re-election effort. 1199’s continuing loyalty to the Senate Republican majority was reflected in their decision to oppose, unsuccessfully, Spitzer’s candidate in recent Senate special election in Nassau. This time Governor Spitzer has not only spared the poor from cuts in his budget, he is proposing a series of reforms to expand access to Medicaid and other public health care programs. He proposes to increase the income eligibility for Child Health Plus from 250% to 400% of poverty. This will expand coverage of children, but it will fall short of its stated goal of health insurance for all of New York’s children. The new governor has pledged to reduce the number of uninsured by 50% over four years. In addition to raising the income eligibility for CHP he proposes to make it easier to access public benefit programs like Medicaid and Family Health Plus. This year’s budget includes simplifying the recertification process for Medicaid. He also wants to continue benefits for a year from the point of eligibility. This would avoid people’s needing to move in and out of the system as their wages fluctuate from month to month. (He unfortunately does not propose to reform the barriers poor people must confront in the initial Medicaid application process.) The Governor is also calling for more accountability for public health dollars, focusing on the state payments made to hospitals “for” graduate medical education and Medicaid. Spitzer points out that these payments are often not directly tied to the actual help provided to either the poor or the doctors in training. He has called for a freeze on the trend factor (e.g., inflation adjustment) on the Medicaid reimbursement rate for hospitals (with some offsets for those hospitals most serving the poor). He calls for ending the practice whereby hospitals use the state’s Medicaid payments to subsidize deep discounts they provide to private insurance companies. Spitzer says he wants to put “patients first”, that public dollars should be directed towards those that the various public health programs are intended to help – the poor, elderly and disabled – rather than being viewed as a free-floating slush fund that helps the hospitals deal with their overall financial needs. Most reform groups, especially the advocates for the poor, are strongly praising the Governor. They agree that the hospitals have used their political power to win a disproportionate share of the state’s nearly $50 billion health care budget. Few would deny that politics more than sound public policy determines how the state’s health care budget is spent. While everyone publicly decries the wasteful costs of providing primary care to the uninsured through hospital emergency rooms, New York actually pushes people in that direction rather than relying more on the less expensive community health care services. Critics abound. Governor Spitzer proposes to freeze the rate of increase in Medicaid spending at 1.7 percent per year. Over the last years of the Pataki administration, Medicaid spending, measured in dollars, rose slower than beneficiaries, measured in people. The result was a decline in spending, dollars per person, for Medicaid beneficiaries. How the new Governor will hold the rate of increase in Medicaid spending to a very strict low level while increasing enrollments appears to be a very fair question. More, although they applaud proposals to expand Medicaid enrollment, some critics contend that a plan likely to further reduce the per capita spending for Medicaid beneficiaries will worsen the already dubious quality of health care for New York’s poor. Even many who agree with the broader health care reform principles advanced by the Governor feel that he has set up a fight - making hospitals demand that insurance companies bear a fairer share of the financial costs - without proposing a comprehensive solution. Indeed the hospitals have already invested efforts to oppose the Governor – something that might be more likely to succeed than hospitals standing up to the private health insurance industry one by one. Others argue that the Governor should have taken on the insurance companies in a different way: by directly challenging their power. There have been renewed calls for the state to return to setting the reimbursement rates paid by private insurers; the Governor recently said he will make such a proposal. Still others take this charge to its logical conclusion, by calling for a publicly financed single risk pool including all New York residents these "single payer" advocates seek to end private health insurance altogether. As much as a third of health care dollars pay for the existence of private insurance – to pay for their paperwork, bureaucracy and profits. Many of these advocates feel that the state is already paying way much too money for an ineffective “sick care” system and want to both lower costs while providing quality health care to all state residents. Others also complain that the Governor is following Pataki’s lead in allowing billions of dollars from the ongoing for-profit conversion of non-profit insurance companies (e.g., HIP in NYC) to be diverted into the state budget rather than put into a foundation targeted to assuring access to health care services. As usual, the strongest and loudest protests are coming from the alliance of the 1199 health care union and the hospitals, Prior to the Governor’s budget proposals, the hospitals were already feeling the pressure from last year’s Berger hospital closing commission, which was given broad powers to develop – and implement – a downsizing program for hospitals throughout the state. The hospitals are also facing proposed cuts on a second front, from President Bush. Bush targets Medicare reimbursement to hospitals, nursing homes, home care and physicians. Fortunately, with a Democratic-controlled Congress, many of the President’s proposals appear dead on arrival. Defenders of the hospitals point to them as the crown jewels of the state’s health care system. They are also major centers of employment and economic stimulation in their host communities. Others argue that while Spitzer is correct in pointing out the illogical nature of various parts of the state health care financing, the allocation of funds grows out of the politics of health care in NYS. Convoluted, sleight-of-hand political deals cut in the back rooms of the Capitol bring money forth in ways that baffle any outside observer, but ultimately that money does go to support the policy decisions made by the Governor and legislators. Going after just one or two of the many irrationals current foundations of public health care expenditures – rather than proposing a comprehensive solution – allows many basic problems to continue. It also leaves the whole house of cards at great risk of crumbling. The lack of a Spitzer proposal for universal health care has recently become the central thrust of the political ad campaigns being run by the 1199 - hospitals coalition. The recent agreement by the elected leaders that the State has an extra $575 million to spend above what the Governor had estimated back on February 1st will make it easier for the Legislature to once again back the hospitals in the showdown. The Governor does however have the power of a line item veto and with the backing of the Senate Democrats, until recently led by the Lieutenant Governor David Paterson; he can defeat any veto override. What minimum amount of reform in health care financing that the Governor will demand in this year’s budget is the big question. The renewal of the state’s overriding funding formula for health care, HCRA, has already been pushed back to next year. Hopefully, the final resolution will include a commitment to adopt the proposal for a Commission on Universal Health Care to evaluate the cost-effectiveness of the various approaches to providing health care to all (e.g., single payer, employer mandates, the Massachusetts model, Health Savings Accounts, etc.). The proposal passed the Assembly last year by 135 to 1 (meaning most Republicans also voted for it) but it was stalled by the Senate Republican leadership on the grounds that they wanted to wait until the Berger Commission came out with their report. A related proposal is to also establish a Commission to develop a comprehensive, long term overhaul of health care financing. The major contribution of the Spitzer health care proposals is their confrontation with the distortion in the health care system that has allowed the health of institutions to become more important than the health of patients, particularly poor and vulnerable people. However, even if all of Spitzer’s proposals were implemented, four years later there would still be well over a million people lacking coverage. Without an in depth exploration of proposals for universal health care, that pressure may force the state to prematurely adopt flawed ideas such as the Massachusetts plan whose unrealistic reliance on individual mandates to buy insurance will lead to failure. |
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