March 23, 2005
Report: New York must control Medicaid's hospital spending
To cut Medicaid costs, New York must enact reforms that control Medicaid spending in hospitals, according to the fourth report in the Public Policy Institute’s Medicaid Watch '05 series.
“Hospital spending represents the biggest single disparity between Medicaid spending in New York and in our competitor states,” according to the report, which was released today.
New York spent more than $10 billion on hospitals and clinics through Medicaid in 2003, almost three times the per-capita national average and more than twice spending in Massachusetts, the report said.
Much of this excess spending is made possible by state government’s "long and continuing opposition to the market forces that reduce costs and improve quality elsewhere,” the report said, citing independent reports that have said New York “artificially props up hospitals that should close or downsize.”
The report also noted that:
- New York's Medicaid spending allows hospitals to maintain
21 percent more hospital beds than the national average,
adjusted for population.
- Eliminating hospital capacity can actually improve quality of care and health outcomes. "Higher volumes in fewer institutions can improve treatment outcomes," the report said.
The Public Policy Institute is publishing Medicaid Watch ’05 to document the case for reforms that reduce overall costs imposed on New York’s taxpayers, businesses, farmers, and county governments. All reports in the series are at www.ppinys.org.
These reports were researched and written by Robert Ward, the Institute’s director of research. To interview him about Medicaid spending, telephone 518/465-7511, ext. 271.