Medicaid cap followup 2

Newsday has been running a series on Medicaid and I'll try to do a summary later, but this article (editorial?), calling for tightened local controls misses the point of the new Medicaid cap.

But New York City and the suburban counties do have some control over the cost of nonmedical home care and transportation to treatment sites. And, especially in the city and Nassau, they must do a better job at shaving expenses

With the cap in place, such small scale efforts won't make any difference.

Not to argue against local vigilance, but even under the old rules this argument is off base. Take a look at the attached graphic. Historically the big expenses have been fee-for-service hospital inpatient care and nursing home care. Even a small percentage increase generates big expenditure increases.

But the dramatic increases have come from pharmaceuticals and other supplies and from HMO premiums for Medicaid managed care (including Family Health Plus, which will now be entirely a State funding responsibility).

Transportation? Lost in the data haze.

Non medical home care? We assume Newsday is referring to Personal Care and those costs have been growing along with other home health expenses. But this is symbolic of how diffusion of administrative responsibility has not only weakened financial controls, it's distorted program administration. Counties have had much more influence over who gets home care and how much than they've had over institutional care for identical patients. So naturally, when seeking to control expenses anywhere they could, they've limited access to institutional alternatives, directly undermining the State's policy goals and probably their own long term financial interests.

So the Newsday opinion is out-of-date because they seem not to fully understand the implications of the cap and, even if the rules hadn't changed, offbase because they would have reinforced a distortion embedded in the old system.

Comments

[Rick Stevens]

Thanks John for pulling me up onto the stage...

I guess perhaps the point I was making (poorly apparently) was that' the devil is in the details' so what may look like a good deal at 50,000 feet may not turn out to be as good at ground level.

It will be interesting to see what finally happens when numbers get plugged into the formula and someone has to pull out their checkbook... Then the arguments will start !

RICK