healthsignals new york

Almost there and some good choices already

Here are some of the lucky folks who'll be getting pleading and/or threatening calls at home the next year and a half. They've been selected for New York's hospital/nursing home closure commission.

There are some excellent choices in this group and some political innovation too. A couple of the appointees are not residents of New York State. Politically risky, but suggestive of really wanting to do something.

Note that while the commission is supposed to have 18 members, there are only fifteen listed. The Governor's press release does not mention either the Speaker of the Assembly or the Senate Minority Leader. Seems they haven't made their decisions yet.

From the Governor's press release here are the appointees of the Governor, the Senate Majority Leader and the Assembly Minority Leader:

• Stephen Berger (Chair), Chairman of the Chairman of Odyssey Investment Partners (OIP), LLC, a investment firm that specializes in private corporate transactions. Mr. Berger served as Executive Director of the Port Authority of New York and New Jersey from 1985-1990.
• Leo Brideau, President and Chief Executive Officer of St. Mary's Hospital and Clinics in Milwaukee. Previously, he served as President of Strong Health Regional Network in Rochester New York
• Craig Duncan, former President and Chief Executive Officer of Northeast Health.
• Robert Gaffney, Partner in the law firm of Meyer, Souzzi, English & Klein. Mr. Gaffney after serving as a Special Agent with the Federal Bureau of Investigation, was elected to the New York State Assembly in 1985 and was elected Suffolk County Executive in 1992.
• Robert Hinckley, Vice President of Governmental and External Affairs for Capital District Physicians Health Plan. Prior to joining to Capital District Physicians Health Plan, Mr. Hinckley served as Senior Deputy Secretary to the Governor in January 2003.
• Howard Howlett, Chairman and Founding Member of the Hospital Trustees of New York State
• Darlene Kerr, Former President and Chief Executive Officer of Niagara Mohawk (NIMO). Prior to serving as President and CEO, Ms. Kerr was NIMO's Executive Vice President and Chief Operating Officer.
• Mark Kissinger, is Deputy Secretary to the Governor, and is responsible for policies and operations of the State's health and human services agencies. Mr. Kissinger joined the Governor's staff in 1999.
• Pat Lee, Chairman and CEO of International Motion Control, Inc.  Mr. Lee serves as Director of the New York Federal Reserve Bank, Buffalo Branch and the Empire State Development Corporation, Western New York Region.
• Neil Roberts, former Chief Executive Officer of United Methodist Health and Housing, the parent company of Wesley Health Care Center.
• Teresa Santiago, Chairperson of the New York Consumer Protection Board.  Previously, Ms. Santiago was the Director of Hispanic Expertí, a public relations and advertising firm specializing in the Black and Hispanic consumer markets.
• Ruben King Shaw, former Deputy Administrator/COO for the Centers for Medicare and Medicaid Services. In that capacity, he was responsible for the day-to-day direction of Medicare, Medicaid, Child Health Insurance Programs, Survey and Certification of health care facilities and other health care initiatives.
• Al Simone, President of Rochester Institute of Technology. He was named President in 1992. Prior to leading RIT, he was the President of the University of Hawaii System and Chancellor of the University Hawaii at Manoa.
• Bishop Joseph Sullivan, Vicar for Human Services and Regional Bishop for the 62 parishes of the Brooklyn West Vicariate. He has played various roles in Catholic Charities including Executive Director and Executive Vice President of the Board of Trustees. He is also Secretary to the Ordinary for Charities. In 1980, he was named Auxiliary Bishop by Pope John Paul II.
• Buford Sears, Senior Vice President and manager for health care and not-for-profit banking at Manufacturers & Traders Trust Company in Buffalo. Prior to that, he was Senior Vice President at Citizens & Southern National Bank.

Now we'll see what it takes to fill out the roster.

Hospital closure commission already in trouble?

Busy week and so I'd figured on not posting much, but we've been waiting for the announcement of those selected for New York's hospital/nursing home closure commission and the news is in ... things are breaking down politically over the commission's membership and they've already missed the deadline for appointments. How entirely unsurprising.

In today's Albany Times Union, James Odato writes in Leaders clash over hospital panel  that the Governor and the Legislature are already behind schedule in naming the membership. Pataki's list of nominees was ready last Friday, the deadline, but there's already a dispute over whether to appoint lobbyists and health care trade association representatives to the commission.

Pataki was ready to announce his appointees last Friday -- the deadline. But he and the Legislature's leaders have been struggling over the composition and on whether to allow lobbyists or stakeholders in the health care industry on the panel, according to health care officials.

"Stakeholders." What a euphemism! What a crock! Eighteen members was too limiting anyway. Why don't we just expand the membership of the commission to include the CEOs of every hospital in the State and let them vote to decide who gets thrown off the island? (Just make sure that they all have to wear some sort of garish tropical print shorts and no shirts and force them to eat bugs for a week.)

Read the article closely and what do you see? Virtually everyone quoted says "not me, not me," they don't want such representation. Does this mean they're all being disingenuous or does it mean that the real hold up is Ken Raske, head of the Greater New York Hospital Association?

• Even without the quote, "representatives of SEIU say they don't have to be on the panel," I doubt that it's Dennis Rivera, head of District 1199 (who gets bashed by the Post again here) because he doesn't need a seat at the table. His presence will loom over the entire proceedings anyway. Why only have one seat out of 18?
  
• Doesn't sound like it's Assembly Health Committee Chairman Dick Gottfried who's quoted, "An active issue is whether to appoint stakeholders or not," ... "Appointing stakeholders would be questionable at best." But it could be Assembly leadership
• It's not HANYS, which is quoted saying it "doesn't want any hospital group or worker union on the commission." and  "It would obviously be a conflict.

So it looks like Ken is the culprit, "the Greater New York Hospital Association says its organizations should be included." This was their idea from the beginning anyway.

Carl Young, the head of NYAHSA is a good guy, but his heartfelt desire reflected in the quote at the end of the article

I cling to the hope this commission can be a vehicle for much broader policy thinking, not just closing hospitals

is just asking for way to much. Sorry Carl, this has been raw politics from the beginning and it's only going to get worse.

Hiding assets?

Since hiding or sheltering assets in order to become Medicaid eligible has been much talked about of late, it's worth pointing to a new report by Ellen O'Brien of the Georgetown University Long Term Care Financing Project. The project is funded by the Robert Wood Johnson Foundation.

The report, Medicaid's Coverage of Nursing Home Costs: Asset Shelter for the Wealthy or Essential Safety Net? (PDF) emphasizes the "little evidence that nursing home residents transfer assets to gain eligibility for Medicaid."

I've long suspected that the scope of the problem does not match the rhetoric around it. And this report is suggestive that that's the case. However, some of the data cited are rather old (the 1989 National Long Term Care Survey) and the 1985 National Nursing Home Survey. And, if there's really no payoff what are all those lawyers advertising for?  (Go do a Google search on "Medicaid asset trust" or something similar) and note the number of hits.

Other data suggest that some elderly people transfer assets to avoid taxation, but recent changes in the inheritance laws will likely reduce the incentives to do so. But those same data also suggest that while wealthy people in declining health give gifts to avoid taxation, but the less wealthy people hold on to their assets as a precaution.

A 1993 study estimated the maximum potential Medicaid savings in nursing home costs was three percent. But that estimate included those who might have transferred assets, but who did not enter a nursing home. Savings estimates associated with state Medicaid waiver applications have  been relatively small, the largest being 1.4 percent.

As they say, "absence of evidence is not evidence of absence." This report is helpful and it sets a balanced tone, but by no means does it end the argument.

 

Press coverage of the closure commission ... and us

Jay Gallagher's story in today's Rochester Democrat & Chronicle discussed the hospital/nursing home closure commission. He quoted me a bit, accurately by the way,  and I think I'll expand on what I said to him.

Many use the Federal Commission that targets military installations for closure as a handy metaphor to describe New York's hospital/nursing home closure commission. But there are  a few key differences, some of which I discussed with Jay, some of which I didn't think of until afterwards.

1. The Federal government owns its military installations while the hospitals and nursing homes are merely regulated by the State. Those facilities are owned by private, mostly not-for-profit organizations. There is no prospect of a legal challenge by a base commander to a closure decision. But we can count on a legal challenge from at least some hospitals and/or nursing homes being told to close.
   
2. Because of the ownership difference all the savings from a base closing accrue to the Federal government while only a fraction of the savings from a hospital or nursing home accrue to the State, even when you include the local share of Medicaid costs.
3. The political reaction against military base closings is overwhelmingly about direct jobs and other local economic impact. In addition to the economic issue, closing a hospital also generates an emotional effect among former and potential patients that is quite apart from their economic interests. So the issues take on a different tenor.
4. Not every Congressional District has a military base. Indeed, military installations are concentrated in the South and West. But I'd bet that a very solid majority of NYS Senate districts have a hospital and probably several nursing homes. (There are 61 Senate districts and 150 Assembly districts, fewer than the number of hospitals and and many fewer than the number of nursing homes.)
5. There's a huge difference between telling military personnel that it's time to pick up and move elsewhere and telling a frail 90 year old that they must move out of what has become their home for their waning days or telling their 65 year old child that they must travel further to visit mom. Can't you just imagine the "human interest" stories in the press on that one? It's hard enough to close a residential facility that's providing bad care. The Health Department press person who gets tasked with defending these cases and tagged as cold and heartless has nothing but my sympathy.

Here's how I came up with the "70 of the state's 230 hospitals" analytical estimate which contrasted with my "half a dozen, maybe a dozen" political estimate.

Health Department staff told me at the beginning of this week that New York has 247 hospitals with 62,800 beds and an occupancy rate of 60 percent. That equates to 37,680 patients per day. Optimal average occupancy is probably about 85 percent (allowing for normal fluctuation), but we'll cut them a bit of slack and say 80 percent. Eighty percent occupancy with 37,680 patients equates to 45,216 beds, or 17,584 less than what we have today. Today's average hospital has 254 beds. Divide 17,584 by 254 and you get 178 hospitals down from today's 247, a reduction of 69. So round that to 70. Given that it would be reasonable to assume a continued decline in hospital days and that we assumed 80 rather than 85 percent as optimal occupancy, these may be conservative estimates.

Certainly there are many folks who can come up with a more sophisticated political estimate than I, but here are the reasons for my skepticism. Assume that Senators and Assembly members in districts with a hospital proposed to be closed will tend to vote to overturn a package of Commission proposals. Then in order to protect the package from being overturned, you must have a majority in at least one of the houses which doesn't have a hospital in the package. Otherwise you've got sufficient votes for an override. So you've got to keep the total number small.

Mind you this assessment doesn't even begin to take into account a host of factors. Take for example, the research and education being conducted in teaching hospitals and their all-round political clout. These of course are the most expensive hospitals in the system and their care often doesn't measure up to that provided in community hospitals, but they have tremendous leverage.

Or take for example, communities with two hospitals whose total capacity is well recognized as more than necessary, but one of the hospitals is secular and the other is Catholic. Now which one do you choose?

Perhaps the Commission and Legislators will be gutsier than that, but find me the evidence in the past decade of that discipline and willingness to face the public having made those sorts of decisions.

For a future post, let's consider what the Commission would have to do to really impress us. (Feel free to send me private e-mails on this rather than comment. I'll keep your name out of it.) Here's a "just thinkin' out loud" start as to what the the Commission's package should include in order for us to be at least mildly surprised and impressed with their fortitude. The package has to:

• Include a proportionate number of teaching hospitals and at least two in any case.
• Target hospitals that are less efficient and/or provide care of lesser quality than their competitors. There are lots of quite sophisticated methods for measuring efficiency. And let's not count reputation as a quality measure. Show us some hard data.
• Compare more than the hospitals and their patients. First compare the use of hospital services within hospital service areas. It's a subtle but quite important difference. Look first at the per capita hospitalization rates of the populations in each hospital market or service area. Calculate which areas have high hospitalization rates and figure out why and the degree to which it may be unnecessary or avoidable. Then look to see where those patients are being hospitalized.
• Offer up a workable plan for retiring outstanding capital debt that doesn't take systems off the hook for their hospitals that are proposed for closure, but which also spreads some of the burden for retiring that debt on the surviving competitors.
• Detail how the savings will be generated from each closure and who will accrue the hard dollar benefit. (Remember, when some of a hospital's would-have-been patients go to another hospital, the surviving hospital gains, but neither Medicaid nor other payers get any savings. And if the surviving hospital has higher prices than the closed hospital, the savings can get real small real fast.)
• Close a sufficient number to make a real dent, but leave a sufficient number for each market to remain competitive.

I'm not sure that this is really supposed to happen. It's great rhetoric, but I continue to wonder whether it's a feint by some of the players in the hospital industry who expect to survive. Perhaps it's a way to get the State to pay off the capital debt for facilities that systems wanted to close anyway. Perhaps what I'm doing here is daring the Commission to generate proposals with the scope necessary to make a real difference. I'd be amazed, but glad to be wrong.

The overly congratulatory Daily News

Here's today's New York Daily News editorial on the hospital/nursing home closure commission.

... buried in the hundreds of pages that lawmakers ratified sight-unseen was a real gem of an idea: putting the state's overweight health care system on a diet.

Cute. And we know how effective most diets are.

No one knows what this excess capacity costs in higher bills for Medicaid, Medicare and private health coverage, but it's likely to be in the billions. Carrying this weight is a large reason that New York spends more than any other state on health care, yet its hospitals and nursing homes constantly teeter on the brink of bankruptcy. Often they've been rescued with taxpayer-financed bailouts.

But we could know at least approximately what that excess capacity costs. Who's game for doing that calculation? Or better yet, (crass commercial here) paying us to do it.

The commission - Pataki's brainchild -

Or put another way, Pataki's way of sucking everyone else into what he (through the Commissioner of Health) had the power to do all along.

Pataki deserves credit for conceiving the idea, and industry officials and legislators deserve credit for going along.

Well, I suppose we could give the Governor some credit for at least bringing the underlying issue (gross overcapacity) to the forefront. But the question remains what took so long. It's not as if nobody's known about this the past ten years. As we noted yesterday, New York partially de-regulated in 1996, but it didn't de-politicize the hospital market. Being charitable, we might observe that this Commission which has emerged from and will be immersed in a political process is to offset the politics of the past decade which prevented the market from doing exactly what the Commission is supposed to do, namely reduce the size of the hospital and nursing home systems.

And credit for the industry officials? Puhleeze! First, this is a way for them to play out their political games promising protection from the Commission for their allies and punishment for all others. It's a way for them to take political advantage of what the market would probably have done anyway.

And, perhaps even more important. Isn't the implication of an institution's not being on the closure list the Commission comes up with that it should be saved at all costs? Emphasis on costs. Say the market would eventually reduce the size of the hospital system by 70 hospitals (to get to 80 percent occupancy systemwide). Then say the Commission only proposes to close 20 because it makes a political calculation that any more than that would lead to a Legislative override or because of the pressure and horsetrading. (Perhaps I should explain the rules in another post.) In the following legislative year, don't the survivors have the perfect argument for lots of "save me" money in the State budget? I sure think so.

 

The state of estates

Has anyone else noticed the irony of our current haste to attach more of the assets in personal estates to offset Medicaid spending for patients in nursing homes and our simultaneous haste to protect personal estates from Federal inheritance taxes?

Turns out that Robert Kuttner did four years ago. He credits political scientist Michael Lipsky with coining the phrase "pre-death tax."

This is the provision of the Medicaid law requiring middle class people to "spend down" their net worth to almost nothing before they can qualify for nursing home care, as paupers.

These increasingly incongruous policies are leading me toward the conclusion that we are going in exactly the wrong direction with respect to tightening Medicaid personal asset policies (check here and here). Kuttner and Lipsky reinforce that trend.

But all of the above are financial issues. There are healthcare reasons as well. They will be the subject of another post as soon as I can find the time to do the graphic depictions of what I've already written. (Don't hold your breath.)

Social Security & the Medicaid asset rules

And while we're on the subject of the Medicaid asset tests, "Legal Memorandum" asks a quite insightful question about the potential relationship between the asset tests and the private investment accounts proposed as Social Security reform:

Anyway, today, with Social Security, if you are pre-benefits (IE, you are say, 40 years old, and not collecting), you receive no social security income (so that doesn't get factored into your resources), and you also technically have no specific interest in a sum of money held by the government in the "social security trust fund".  So there really is no way for the state (the administrator of medicaid) to go after that money (whereas if you were 70 and collecting defined social security payments, that would factor into your resource calculation).

In other words, switching from Social Security to some private account scheme would allow medicaid to have yet another resource to factor into denials, and another resource to force you to spend down your resources (good luck, spouse - you have 90k to live on for the next 30 or 40 years!).

"Solving" the Social Security "problem" could solve the Medicaid problem as well!

Quick & dirty reaction? Legal Memorandum is right. Moreover, the advocates for private accounts now have two nasty choices:

• Deal with the overlap by exempting the new private accounts from the Medicaid asset calculation. This would instantly change investment calculations because these assets would be protected in ways that others are not. Politics being what they are, that in turn would encourage advocates for other types of investments to seek the same type of legal protection. Those with assets would become the advocates for universal public health insurance -- at least for nursing home care. What a twist.
  
• Not deal with the overlap, weakening the argument for private accounts. As they are being sold as belonging to individuals, that would also mean that they could be tapped by creditors for other liabilities of those individuals. In fact, I'm a bit surprised not to have heard anyone tying the proposed private accounts to the proposed changes in the bankruptcy laws.

No doubt there are a whole series of related questions we ought to be thinking about.

Guess, I have to go finish the draft post on the tie-in between nursing home care, the Medicaid asset test, and universal coverage.

Political philosophy & Medicaid asset rules

New Hampshire, like many states, is moving toward tightening its policies regarding the relationship of asset transfers and Medicaid eligibility.

Here's a report from the Concord Monitor regarding yesterday's action in the Legislature:

The bill would expand the time the state can review certain assets in determining a person's eligibility for Medicaid. If a Medicaid applicant makes a gift within that time, he or she would not immediately qualify for assistance. A gift of money or investments would affect eligibility if it occurred within five years of applying for Medicaid. If the gift was real estate or a contribution to a trust, the "lookback" period would extend to 10 years. Currently, those windows are three and five years, respectively. Even with lawmakers' support, extending the lookback periods will require federal approval. The plan also would allow people to protect their assets if they have a qualifying policy for long term care insurance.

This is an issue everywhere and it sometimes cuts politically in unconventional ways. "Liberals" want to protect Medicaid's original purpose and "conservatives" want to reduce the costs of Medicaid. That may be leading to an emerging concensus for more restrictions.

However, to the degree that it's Republican constituencies that have assets worth protecting, there's considerable potential for political missteps here.

Years ago when I staffed health and welfare issues for the Committee on Ways & Means in the New York State Assembly, it was two quite conservative Republican members of the Assembly who absolutely pummeled me for presenting and arguing on behalf of a more rigorous asset test for Medicaid eligibility. One of them used their mother-in-law and the other their own mother as the prime examples. In other words, they would have been the ones who would have benefited from the estates to be passed on while Medicaid paid the nursing home bills. The same was likely true for their supporters.

Ever since, I've been careful not to assume  what position people would take on this based on party affiliation or political philosophy.

The other legislative bill

We linked to the New York Legislature's health and mental hygiene appropriations bill here (S.554C or A.554C).

We neglected to note another bill, with the substance of the legal changes. Go to the same links for the Senate or Assembly and read, if you dare: S.3668 or A.6842.

It's a couple hundred pages, so it may take a while to connect.

By the way, if you've never looked at something like this, you might want to take a glance just to get a sense of what it's like. Go through and pick a section at random and actually read it. Never mind the politics and the negotiating, the shear logistics of  putting something like this together are often daunting. And it usually happens when the staff who do the drafting are already exhausted.

Ghettos for the elderly

Jane Gross writes a poignant story in the New York Times today about the folks living in an assisted living facility. Two things stand out.

The first is the stark description is of how financing affects where the elderly live. When personal assets are gone ... and they go very quickly in assisted living, one goes to a nursing home. Period. End of discussion.

Through Gross's entire article there is not a single reference to whether there is a clinical or functional need for nursing home care. It's simply, there's no money left, Medicaid pays for nursing home care, that's where you go. All the policy wonks and public officials will tell you that's wrong. They have standards and assessments and on and on. I strongly suspect that, in the real world, it's right.

The second is a reminder that we want to spend our later years in our own home. We don't want to be sent to a nursing home. Regardless of our conditions, we don't want to be sent to any form of residential care that concentrates the elderly and the disabled.

Many alternatives exist. Fredda Vladeck and her colleagues at the United Hospital Fund in New York City have been doing lots of research on "naturally occurring retirement communities." They note that, especially in urban areas, there are lots of neighborhoods and apartment buildings that already have high concentrations of elderly. They emphasize that with supportive services, most can "age in place." This is an important insight because it allows us to concentrate staff and other resources and use them more effectively than in traditional home care models, while reinforcing the ability of the patient/client to stay at home and interact with the community of which they are a part.

I would add that, aside from being in ones own home, psychologically the primary difference between being in some form of residential care and in the community is the difference between being mixed in with people of all ages and being in a ghetto for the elderly and disabled. Who wants that?