Volume 80, Number 23 | November 4 - 10, 2010
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Long-Term Care – Achieve Savings Through Reform, Not Cuts

By Emma DeVito

With election day come and gone, New York State now has a new Governor-elect, Andrew Cuomo.

Although we will have someone new at the helm of state government, Cuomo will still face the same old problem that has been confronting New York in recent years – huge budget deficits that have prevented the state from conducting business as usual. (Although, it should be noted, critics of state government spending have attacked “business as usual” as excessive, fraught with waste, fraud and abuse, and having an undercurrent of favoritism.)

In the next fiscal year alone, state government faces a deficit now pegged at $9 billion, the state Division of the Budget said recently. There are few targets where significant savings can be achieved. The two biggest spenders are education and health care, particularly Medicaid-financed services. The Executive Branch and the Legislature have shown a great reluctance to date to chip away at education spending. They have not been so reluctant to cut health care.

Take the current fiscal year, for example. Governor Paterson achieved major health care spending cuts, totaling $779 million – the lion’s share what he had sought. These cuts included wide-ranging reductions totaling $234 million impacting long-term care and chronic care programs and services. There were also significant cuts to other programs providing aging services. Overall health care cuts over the past four state fiscal years are now approaching $3 billion.

It’s important to note that because of actions by the Governor and state Legislature over the past three years, total long-term care cuts alone are approaching $1.5 billion, according to various reports and analysis from provider associations such as the Continuing Care Leadership Coalition (CCLC).

New York is also currently a recipient of $1.4 billion in federal anti-recession largesse that includes $800 million in the form of what’s called FMAP, or Federal Medicaid Assistance Percentages.

These enhanced FMAP monies end in 2011. There will be no more. The loss of the funds, over which there is debate here in New York as to how the monies have been applied to the state budget, will have the effect of adding to the overall deficit woes and further jeopardize the services supported by Medicaid.

Cuomo’s campaign platform looked pretty heavily in the direction of Medicaid, saying that the state spends twice the national average on the program while providing poorly, or only at the national average of key health indicators. The inference is that New York’s not getting its money’s worth.

According to the Associated Press, Cuomo told a Buffalo audience that Medicaid’s level of spending in New York is “unsustainable,” but that he would work with health care interests to reduce it, saying he would target inefficiencies. But he also demanded that providers cooperate with him, or else he would simply cut spending.

“We have the highest rate in the nation, and that’s just not sustainable,” Cuomo told the Roswell Park Cancer Institute. “I want to bring in the providers. I want to bring in the people who are actually doing business with the state and say, ‘Guys, we can’ afford it any more. We have to reduce the amount we spend on Medicaid. Let’s redesign the program together, otherwise, I’m just going to have to cut off the top, and that’s not the best way to do it,” Cuomo said.

The implications of the new administration’s approach to cutting health care funding – and particularly for our community, where providers such as VillageCare offer Medicaid-supported services for various chronic care programs that serve older adults and persons living with HIV/AIDS – could be stunning in the face of the looming 2011-12 deficit.

Given the size of the cuts sustained to date by long-term care programs, it is difficult to see how providers, especially not-for-profit ones that rely heavily on a Medicaid clientele, would be able to absorb another round of off-the-top cuts and still continue to offer the same level of services. Most all long-term care programs are cut to the bone.

Something’s got to give.

We need to get away from this willy-nilly, year-in, year-out state budget process where the administration virtually dictates where it wants to “save” money with little advice from the outside – from providers or patient/client advocacy groups.

The answer lies in reforming the state’s long-term care system.

CCLC points out that small numbers of Medicaid patients consume the highest expenses. These are frail individuals with chronic conditions and complex care needs, which demand a high level of services. Not only are they the hardest and most expensive to serve, but services for this group are often poorly coordinated.

CCLC is advocating that long-term-care reform can be achieved through better and more cost-effective coordination of services for these patients. The other side to this is that this is one of the goals articulated in health care reform’s Patient Protection and Affordable Care Act. Through creation of an organized, integrated and coordinated system of care for those with chronic conditions, CCLC argues that considerable savings will be achieved.

This is a worthy idea that needs to be considered by the new administration.

Such a plan folds nicely into Candidate Cuomo’s Medicaid platform, which calls for controlling the cost of those with complex needs by more carefully managing and coordinating their services. The CCLC long-term care reform plan would seem to be something that Governor Cuomo could embrace in January when the state’s budget deficit crisis becomes his to address and resolve.

(Ms. DeVito is president and chief executive officer of not-for-profit VillageCare, which serves some 13,000 persons annually in community-based and residential care programs for older adults and those living with HIV/AIDS.)

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