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January 18, 2006

Spitzer outlines a broad agenda for health-care policy change
He argues that New York can increase Medicaid enrollment and still cut costs

New York State should radically overhaul its approach to Medicaid and health-care policy to reduce costs while increasing the number of New Yorkers who get taxpayer-funded Medicaid coverage, state Attorney General Eliot Spitzer said Wednesday.

Recent high-tech advances “have made health care much more expensive for individuals and employers who purchase insurance and for taxpayers who fund the cost of Medicaid and other public health programs,” Spitzer, a Democratic candidate for Governor in 2006, said in a luncheon address before the Chamber Alliance of New York State (CANYS) in Albany.

As a result, family insurance policies have doubled in cost since 1996, and “the high cost of providing health benefits has also weakened the state’s competitive position in attracting and retaining businesses,” he said.

Meanwhile, New York’s total Medicaid cost has nearly doubled in the last 10 years, from $24 billion in 1996 to nearly $50 billion in Governor Pataki’s 2006 Executive Budget, Spitzer added.

“We find ourselves with a system that is at once too costly and yet leaves too many without adequate access to the health care they need,” he said.

Stepped-up efforts to combat Medicaid fraud are worthwhile but will not be sufficient, he said. Instead, the state should undertake a comprehensive strategy to revamp health care in a way that gets more people into taxpayer-funded care, redesigns health-care delivery, and addresses Medicaid-specific policy challenges.

Specifically, Spitzer said that New York should:

Dramatically increase enrollment in Medicaid: New York needs aggressive new steps to enroll in Medicaid more of the 2.7 million New Yorkers who do not have health insurance. Specifically, he urged taxpayer support for health insurance for every child through the state’s Child Health Plus program, and streamlined processes for enrolling and retaining Medicaid beneficiaries.

Restructure and downsize the hospital sector: New York must make hard decisions to close some hospitals and other health-care institutions, require some not to offer certain services, and take other steps to address well-documented overcapacity in New York’s hospital system.

“If we are serious about getting control of health-care costs, we have to make these hard decisions about the best way to provide hospital care,” Spitzer said. “Some hospitals will have to close. Not every hospital will be able to offer every kind of specialized service, and some hospitals will have to be converted into facilities that provide only ambulatory, educational, and emergency care.”

As the hospital sector is right-sized, Spitzer added, New York must ensure that the health-care safety net is preserved, top-notch academic medical centers are preserved, taxpayer subsidies to hospitals are made consistent with the right-sizing strategy, and displaced hospital workers receive retraining.

Invest in information technology: New York must make a stronger commitment to information technology to improve delivery, accountability, and transparency in health care. He cited one hospital that uses information technology to track and manage care, recommend treatments, and manage patients’ prescriptions and scheduling.

Chronic disease management: Spitzer urged improved management of chronic diseases such as diabetes, heart failure, asthma, high blood pressure, and HIV/AIDS. A change in emphasis from treatment to prevention must be part of this effort, he added.

“Nationally, these chronic aliments account for over 60 percent of the rise in health-care spending, and experts tell me that in New York this number is higher,” Spitzer said.

He also said that Health payers must align reimbursement structures to reward better health outcomes instead of merely paying for treatments.

Reduce the cost of prescription drugs: Spitzer argued that New York State should pressure health-care providers to use more generic drugs, saying that New York uses them about 43 percent of the time and the nation uses them almost 60 percent of the time. He also said New York should consider creating a new non-profit bureaucracy to compete with private businesses in managing pharmacy benefits.

Spitzer also recommended even closer state oversight of physicians’ decisions about prescriptions for their patients.

Fight Medicaid fraud and abuse: State lawmakers should pass “a Martin Act for Medicaid fraud" to give the state broad investigative powers akin to those that the attorney general has used to conduct high-profile investigations of Wall Street firms.

Address the high cost of long-term care: New York should “develop a strategy that addresses the fundamental issues of long-term care,” but Spitzer declined to say whether New York should tighten the state’s relatively lax Medicaid eligibility requirements for long-term care. He recommended new education programs to help New Yorkers understand their long term needs, new initiatives to make it easier for New Yorkers to save and pay for their long-term care, investments in better home- and community-based long-term care options, and a stronger commitment to managed long-term care.