By Bill Hammond
New York Daily News
Five years into his term as New York’s chief executive, it’s time to give credit where credit is due: Gov. Cuomo has tamed the Medicaid beast.
Succeeding where many predecessors crashed and burned, Cuomo has brought spending on the $50-plus-billion health plan for the poor and disabled down to consistently manageable levels — without touching benefits or trashing the quality of care.
He pulled that off even as the program added 1.5 million enrollees under Obamacare. He also did it with none of the epic battles against hospitals and health-care unions that paralyzed the Legislature under past governors.
By contrast, Cuomo’s budget for Medicaid — the second-costliest line item on Albany’s plate, after school aid — sailed to approval last week with hardly a word of debate, let alone protest.
As veterans of the Medicaid wars of the ’80s, ’90s, and 2000s could tell you, this is a very big deal.
“I personally think that of this governor’s greatest accomplishments . . . certainly health care has got to be right up there at the top or darn near the top,” said Kenneth Raske of the Greater New York Hospital Association.
Few things the state does are more important. Medicaid provides basic health coverage for almost one out of every four New Yorkers — including not only families on welfare, but also the working poor, the mentally ill, the drug-addicted, the developmentally disabled and the elderly in need of long-term care.
It’s also a major source of revenue for many of the hospitals, nursing homes, clinics, doctors and other providers that all New Yorkers depend on.
Yet for decades , Medicaid costs were perennially spiraling at two or three times the inflation rate. Governors were constantly demanding cuts. Industry lobbyists — Raske chief among them — would warn of devastating consequences for vulnerable patients. The Legislature would approve half-measures and temporary fixes. And the cycle would repeat.
Cuomo managed to turn things around in his very first year, 2011 — with a solution that, contrary to his usual hard-charging style, relied mostly on collaboration rather than confrontation.
Faced with a $10 billion deficit, he started by calling for capping annual growth of the program based on the medical inflation rate. The brain-dead “inflation factors” written into law, which automatically increased fees whether the state could afford it or not, were wiped from the books.
But instead of dictating how the program would cut costs, Cuomo invited Raske and other industry representatives to do the job for him as members of a Medicaid Redesign Team.
The offer came with a warning: If the team failed to find enough savings, the health commissioner would be endowed with “superpowers” to cut as he saw fit.
The industry and the Legislature accepted the plan — and Cuomo’s gamble paid off. The panel came up with reforms that met or beat the savings target that first year, and every year since.
The chief strategy has been to move as much of Medicaid as possible into managed care — including formerly exempt groups, such as nursing home patients and the mentally ill, and benefits that were formerly carved out, such as prescription drugs and home health aides.
The managed care plans have not only squeezed millions in waste and fraud out of the system, but also a lot of the politics. Providers who think they’re being short-changed used to run to the Legislature with their complaints. Now, they haggle with HMO administrators.
Other reforms smartly spent money to save money — such as a program that provides supported housing to certainly chronically ill patients, stabilizing their health to help them avoid costly hospital stays.
Lest anyone suspect the savings are the result of smoke-and-mirrors accounting, Controller Tom DiNapoli — no big Cuomo fan — recently certified the results as real. His auditors found that Medicaid’s annual spending increases from 2010 to 2013 averaged just 1.7% — down from 5.3% for the previous decade.
That translates into billions in savings — enabling Cuomo keep overall state spending in check, avoid tax hikes and make new investments, such as Mayor de Blasio’s universal pre-K. It also gave Washington confidence to approve $8 billion in extra Medicaid funding.
The job is not finished. New York still spends more on Medicaid than California and Texas combined. But Cuomo has put the program on a healthier and more sustainable track.
Cuomo rarely includes the Medicaid turnaround on his list of accomplishments, perhaps because it lacks the high drama of other victories. He should. Sometimes the biggest successes are also the quietest.