Does New York Medicaid pay too much for hospitals' inpatient procedures, like governor Paterson asserts? Well, maybe - but if so, that would be a truly remarkable devation from the national average, for which various estimates show significant underpayment by Medicaid and other government programs, which hospitals subsidize by shifting costs to private payers. (See here and here.)
I find it hard to believe that the Empire State, alone among the states, is somehow overpaying its hospitals for appropriate procedures. But NY has a recent history (under former gov. Spitzer) of shutting down hospitals via state diktat, in order to reduce health-care costs. Mr. Spitzer also pressed a wrong-headed attack against Medicaid beneficaries' use of prescription drugs, which generally reduce expensive inpatient treatment more effectively than government command.
There is a good case that NY Medicaid overpays for long-term care, but that is because it does not have a grip on self-styled eldercare lawyers and accountants who execute asset-transfers for middle-class seniors so that they can qualify for Medicaid LTC. It's also well-known that NY Medicaid is a cesspool of corruption, which drives costs up maddeningly.
Gov. Paterson's solution? A tax-hike in order to make health-care providers even more dependent on the state, by paying community clinics, doctors, & nurse practitioners, in the vain hope that more primary, preventive care, will reduce costs.
How about returning health-care dollars to New Yorkers, so that they can spend them on care of their choice? Or doing anything that might lift NY from the bottom of the U.S. Index of Health Ownership? Nope: Those options are just not in the cards.
Research and commentary from a former senior executive in the U.S. Department of Health & Human Services
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