What's New

Zack Hutchins
Director of Communications

March 29, 2004

Report: Little has been done to ease state's "crushing" Medicaid burden

Despite the “crushing” burden Medicaid imposes on New York taxpayers, “little has been done to bring the costs under control,” largely because of the politically powerful hospital workers union, according to a Gannett News Service report.

Exploding Medicaid costs are a problem everywhere in the country, but the problem is most severe in New York, the report said. The report was printed starting March 28 in several New York newspapers as part of a series by Gannett’s Albany bureau chief, Jay Gallagher, on how “decisions in Albany have contributed to the state's economic decline relative to the rest of the country.”

Twelve percent of total Medicaid dollars spent nationwide are spent in New York, the report said, although New York has less than seven percent of the nation's total Medicaid population.

“Medicaid is the biggest reason our taxes are the highest in the country,” Robert Ward, director of research for The Public Policy Institute, told Gannett.

The state can expect higher costs in the future, as the New York "baby-boomer" generation hits retirement age in the state which spends “by far the most in the country on nursing homes and other kinds of long-term care,” the report continued.

The state has instituted new programs such as Family Health Plus which add to taxpayer costs, the report said.

The thinking behind Family Health Plus, and other taxpayer-backed plans such as Child Health Plus, is that providing people with insurance will save money in the long run by reducing serious illnesses and cutting down on the charity cases that hospitals have to treat at no charge, the report said.

But experts say there is no evidence the programs have saved any money, and in the meantime taxpayers are left footing the bill, the report said.

The powerful health-care workers union, Local 1199/SEIU, actively fights any attempt to cut back Medicaid expenses, the report continued.

One year ago, health care unions and other groups marched 25,000 people to the Capitol to protest Governor Pataki's proposals to restrain Medicaid spending, the report said.

“The demonstration was led by Dennis Rivera, president of one of the most powerful unions in the state, the 250,000-member Local 1199 of the Service Employees International Union, who uses a huge political war chest and the energy of his members to push leaders for more spending on health care,” the report continued.

“There is no effective opposition to him,” E.J. McMahon of the Manhattan Institute told Gannett. "He's become a national figure on the strength of what he's been able to do in Albany, largely with New York state taxpayers' money."

The union has a string of successes to show just how much clout it holds with lawmakers, the report added. In 2002, Rivera made a deal with Governor Pataki and the Legislature "to spend an extra $3 billion on health care over four years, much of it for raises for Rivera's members, even though the state was looking at a multibillion-dollar deficit," the report said.

A study by a Dartmouth College medical professor showed that despite a large per-capita difference in Medicaid spending between Manhattan ($10,550) and Portland, Oregon ($4,823), "there was no difference in either the quality of care or patient satisfaction," the report said.

"The study suggested that as much as a third of medical spending is wasted on services that don't improve the quality of care, and that some people would be better off if they saw their doctors less frequently."

Governor Pataki and the Senate Majority have proposed closing loopholes that allow individuals to transfer monetary assets to become eligible for Medicaid, saving their families costly long-term care bills.

Former Budget Division analyst and health care consultant John Rodat told Gannett New York should be aiming for excellent quality at a more affordable cost.

"The goal of Medicaid was to allow the poor and elderly to access mainstream medicine. We succeeded," Rodat said. "So we say, the more services we pay for, the more successful we are. That's silly. Money is not a uniform indicator of the quality of care.''

For the full report, click here.