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Zack Hutchins
Director of Communications

September 25, 2006

Panel: controlling excess capacity is one way to bring state's health-care costs down

Careful examination of New York’s excess hospital and technological capacity and control of the state’s Medicaid costs can help New York bring its health care costs down, a panel of lawmakers and industry representatives agreed during a Sept. 21 discussion of New York’s health care at The Business Council’s Annual Meeting.

The panel was moderated by Daily News columnist Bill Hammond and included Assemblyman Richard Gottfried (D-Manhattan); Senator Kemp Hannon (R-Nassau); and Steven McCormick, a plant manager for Anheuser-Busch.

Assemblyman Gottfried said that New York’s Medicaid costs could not be compared to those in California.

“I do think there are things we can do to control growth in health care programs and, in particular, the Medicaid program,” he added. He suggested expanding community health centers and disease management centers.

Senator Kemp Hannon said health costs compose almost 45 percent of state budget. Lawmakers and policymakers need to start thinking of Medicaid as a health-care program and not a social services or jobs program, he said.

McCormick, who manages the Anheuser-Busch Busch plant in Baldwinsville, New York, said private sector costs are expanding at a rapid rate. While Anheuser-Busch is self-insured, the company sees the same rate increases as other companies who purchase insurance. “Our rates this past year have gone up 12 percent.”

McCormick said his company has joined a panel of health providers and business leaders in Central New York to discuss ways of reducing, or slowing the growth in, health-care costs.

The group has numerous suggestions, including electronically linking health facilities to avoid duplicate tests, and emphasizing generic drugs.

McCormick also said the group would look at excess capacity. He pointed to the number of MRIs in Syracuse, double the number of MRIs, per capita, than in neighboring Rochester.

But, instead of MRIs costing less in Syracuse than in Rochester, because of the number of machines, MRIs cost the same and more are done, McCormick said. “There’s no price discounting for excess capacity in health care.

McCormick said his group would examine proposals to add technology in the region.

Panel moderator Bill Hammond asked the panelists about the so-called Wal-Mart bill, union-backed legislation that would have forced most businesses to spend a certain amount per employee on benefits.

“It probably would have an adverse impact,” said McCormick, who added that his plant would not have been affected directly by the bill.

Senator Hannon said that the bill’s supporters said the bill would only affect 25 percent of the uninsured in New York.

“That’s a pretty small achievement,” Hannon said. “The benefits were hardly commensurate with the pain.”

He said the bill was “more of a rallying cry for the Working Families party than a realistic proposal.”

When asked about the new Massachusetts law, the panelists agreed that it would require a lot of work to determine whether such a law would work in New York.

Gottfried said the individual mandate, the centerpiece of the Massachusetts law which would require individuals who are able to have health insurance, was unfair. “There’s a lot less to the Massachusetts law than meets the eye,” Gottfried said. He pointed to other services provided, such as police protection and education saying that such basic services are provided through public funds – taxpayer money.

“The enormity of the task is not totally appreciated, “Hannon said. “But it’s a good opportunity to take a look at it.”