Foxes Redesign Hen House

New York State has a looming $8 billion deficit from ballooning Medicaid costs. Governor Cuomo, an astute politician, did what he does best. He formed a committee, called the Medicaid Redesign Team. That way he can avoid responsibility for failure, yet take credit if the plan succeeds.

“Cuomo has instructed the team to impose zero impact on Medicaid beneficiaries and zero impact on local governments. That largely leaves solutions that will make health care services more efficient—or less costly. “

So, who is best to come up with a plan to reduce costs and eliminate waste? The leaders of the medical-Industrial complex of course! The Co-chairs are the CEO of a large hospital network and the former leader of the largest healthcare worker union in the state. They are joined by a smattering of government officials, insurers and other hospital CEOs. The odds of this Group coming up with a plan to save taxpayers money is zero. Their first goal will be to protect their own piece of the Medicaid pie.

Tax payers would be better off if the committee was formed by choosing the first 7 random people you meet walking into a public hospital. I would put my faith in a security guard, ward clerk, triage nurse, med tech, practicing physician, janitor and social worker before I would trust the medical establishment. Granted, the hospital CEOs know better about how to save Medicaid money, but they’re not going to tell anyone. 

According to the Empire Center, provider subsidies to Hospitals are a major driver of Medicaid costs:

“Another cost driver is the substantial amount that Medicaid spends on subsidies for hospitals, often with little connection to patient care. One such program is the Indigent Care Pool, which distributes $1 billion per year. Its declared purpose is to partially reimburse hospitals for providing free care to the uninsured and to supplement the relatively low fees paid by Medicaid. However, the formula used to allocate funding is arcane and dysfunctional, which sometimes results in overly generous grants to wealthy hospitals that treat few poor patients, and overly stingy grants for the true safety-net institutions…Medicaid money should be reserved for providing care to those who need it, not needlessly subsidizing wealthy hospitals or propping open institutions that are no longer financially viable.”

It reminds me of the time I spoke with an Electric Utility executive. I told him how his company wasted hundreds of thousands of dollars on unnecessary physicals and medical tests-the kind of executive physicals every private company has long since abandoned. The Utility bigwig laughed, “You see, if we cut costs, we would have to reduce electric rates.” There’s no incentive to save money. So it is with the CEOs of Northwell, NY Presbyterian and the rest of them. They’re not taking a pay cut. 

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