Get It Right on Health Care Funding

Governor Spitzer is off to a good start in his efforts to reform health care funding in New York State. The health care portion of his first budget builds on public insurance programs by expanding health coverage at a time when employer health care benefits are shrinking.

The governor's decision not to cut benefits and not to shift costs to already strapped New Yorkers is a huge relief and marks a turning point in the debate over health care. His decisions to expand coverage for children by extending Child Health Plus to families up to 400 percent of poverty and to simplify the Medicaid application process are long overdue.

A new national study by the State Health Access Data Assistance Center at the University of Minnesota, Whose Kids Are Covered? A State-By-State Look at Uninsured Children (PDF), reveals that only 47 percent of parents in families earning less than $40,000 a year are offered employer health care benefits -- a nine percent drop since 1997. According to the report, 75 percent of uninsured children live with someone who works full time.

Misaligned System

New York State's health care delivery system is misaligned with the health needs of the 21st century. It is overly reliant on hospital-based sites of care, and it has underdeveloped community-based facilities for both primary care and community and home-based long-term care services.

While hospitals can, and do, provide primary care, people's health care needs are better met in community-based sites that are accessible to New York's diverse communities and neighborhoods. And too many people living with disabilities are forced to reside in institutions because we have failed to invest in community-based care. This budget begins the shift of resources that will allow a community-based infrastructure to be developed.

This is a good budget for working poor families. But a major shift in government health care funding can be risky. It is imperative that community-based care is already in place as resources are shifted from the hospital and nursing home sectors. If not, problems in access to care are certain to arise.

Protecting Workers

Also, shifts in health care appropriations should not be used as a screen to downgrade the economic security of health care workers. The hospital sector is a part of the labor market that is strong -- a bright spot for workers. Wages are relatively high, benefits are good, and career ladders exist.

The governor's budget proposes to build up community care by rationalizing the allocation of health Worker Recruitment and Retention Funds. But as funding is shifted, we need to be sure that moving care into the community should not be an opportunity to erode conditions for workers, or to replace higher-paid unionized workers with less well-paid non-unionized workers.

There are several items in the budget that should be altered to protect both patients and health care workers. Because health care funding cuts in certain sectors could hurt health care workers by displacing some of them, worker retraining funding should be maintained at its 2006 level of $52 million.

Also, the reallocation of Worker Recruitment and Retention funds ($420 million) should be phased in over several years. These funds are currently allocated based upon 1999 payroll data. The budget proposals reward institutions that serve large numbers of Medicaid beneficiaries -- facilities that have Medicaid discharges of at least 35 percent in 2004. That's good. But a phase-in over time would allow workers to be carefully reassigned to new hospitals in a planned transition that would benefit both the workers and patient care.

Funding where
it's needed

Thus far, the Legislature has done nothing to help solve the health care crisis, where Medicaid alone costs the state about $45 billion a year, consuming 40 percent of the state's budget. Many legislators are looking only at cuts in state funding for hospitals in their home districts. Their ideas of health care are too narrowly focused.

The governor's proposals redirect funding for the delivery of health care from hospitals and nursing homes to less costly primary and preventive care, with a concentration on outpatient care at community-based facilities. This makes sound fiscal sense and helps improve quality of care. Community-based care is best able to meet the needs of the majority of Medicaid patients. They are where more Medicaid dollars are needed.

Not only have some legislators rejected virtually all of the governor's Medicaid reforms, they added insult to injury by proposing huge tax relief measures for wealthy suburbs. In Albany some things never change.

Health care costs are a huge problem nationally as well as for every state budget. Here in New York, the governor is on the right track. With a few changes -- and changes are inevitable in any budgetary process -- this new direction in health care financing can help to avert what would eventually be a fiscal train wreck for the state.

From the New York Amsterdam News
March 22 - 28, 2007