Gov. George Pataki's ambitious overhaul of the Medicaid system may not be enough to satisfy the two parties most affected by it: New York state counties and the health-care industry.
Pataki touts the changes he proposes in the 2005 state budget will save county government and property taxpayers more than $578 million in the coming year and a cumulative $7.4 billion by 2009-10. It includes a series of steps designed to fix the public health program's structure, including cost containment measures, making a "right size" health-care system, and taking over the full local share to run the program by 2008.
But representatives of health care associations statewide don't see it as more than just shifting the burden.
Pataki is catching flack from both sides on his proposals. Counties want the cap on Medicaid costs changed and health care advocacy groups feel the plan unjustly punishes facilities that are already struggling to get by with meager Medicaid reimbursements.
"He's stuck in this hard place of what to do," said Chris Rogers, Auburn Memorial Hospital administrator.
Three of the largest health care provider associations in the state - the Healthcare Association of New York State, the New York Association of Homes and Services for the Aging, and the New York State Health Facilities Association - united to study the effects of Pataki's proposal.
Their report estimates providers in the 14-county Central New York region - including Cayuga County - could stand to lose $61.3 million, with $25 million coming from nursing homes and $36.3 million from hospitals.
Of the nursing homes and hospitals in Cayuga County, Auburn Memorial Hospital stands to lose the most from Pataki's proposal. Rogers estimates combined losses from the hospital and its affiliated Finger Lakes Center for Living could reach $750,000 in 2005 if Pataki's proposal remains intact.
"These are devastating cuts," he said.
To offset the loss, the hospital would have to delay larger purchases like medical equipment, Rogers said, but that can only happen for so long. He and others hope Pataki will rethink his changes.
"From a structural side, the governor at least realizes there is a problem," Roger said. "If you can't see it, you can't fix it. At least now he sees it."
Steve Ash, administrator at Mercy Health and Rehabilitation Center, hasn't yet determined the effects if Mercy's Medicaid reimbursements are reduced under Pataki's proposal. Based on NYAHSA estimates, Mercy could lose $465,000 in 2005.
"This is a dance that happens every year," Ash said. "I'm hopeful there are some concessions that will have to be made, although we may not restore everything."
Rising hospital costs in labor and higher pharmaceutical expenses have outpaced the rate at which Medicaid reimbursements adjust yearly. Pataki's proposal could eliminate or severely cripple those inflation rates, which would compound the problem, health-care officials said.
"They need to look somewhere else other than nursing homes and hospitals. They don't pay us enough to cover our Medicaid costs," Ash said. "We're struggling by as it is before any of these cuts would come into effect."
In 2003, 53 percent of hospitals didn't make enough to break even, despite a 4-percent operational profit health-care economists suggest hospitals should meet.
"The governor wants to tax a segment of the health care industry that we feel is least able to survive taxation," said Matthew Cox, spokesman for HANYS, which represents more than 550 nonprofit and public hospitals and other health care organizations statewide.
There are some parts of Pataki's plan that HANYS agrees with, such as the Health Care Efficiency and Affordability Law.
It would create a fund to cover debt if failing hospitals close in the name of a more efficient health-care system overall and fund technology upgrades at hospitals that remain open.
But overall, Pataki has a long way to go, Cox said.
"We don't like the governor's solution to the county's plea for help because it will damage the health-care system," he said. "What we believe the governor has done is shift the burden to providers and call that health-care reform."
HANYS' opposition to Pataki's cuts has not pleased all of its members. Kaleida Health, Buffalo's largest health care system, pulled out of the organization last week. Kaleida did not agree with the organization's "unequivocal opposition" to Pataki's proposal to form a bipartisan commission to identify and make recommendations about underutilized hospitals and nursing homes, said Kaleida chief executive William McGuire.
While there are different parts of Pataki's proposal that health-care agencies and the counties take issue with, they agree some changes need to be made.
"Like counties, we are not thriving in the current environment," Cox said.
"Hospitals can relate to the situation that county governments and even state governments face, having trouble matching expenses to revenue."
The New York State Association of Counties has pushed for Medicaid reform for years. Counties across New York have blamed increasing property taxes - and sales taxes in Erie and Oneida counties - on skyrocketing Medicaid contributions.
Pataki's plan includes one of NYSAC's major reformative measures: a cap on county contributions to Medicaid.
But the association wants to see a hard cap set at the 2003 level.
Another essential part to the success of Pataki's budgetary proposals is cost containment measures.
But getting everyone on board should be the focus at this point in the process, said NYSAC spokesman Mark LaVigne.
"To have anything change, everyone has to have consensus," he said. "If we don't, then we'll be back at square one, and we can't go back to square one."
Big changes
The governor's proposed budget includes these key health-care measures, according to health-care trade organizations:
Provisions affecting hospitals:
- Imposes a 0.07 percent tax on gross income
- Eliminates annual Medicaid rate increase intended to reflect raising costs
- Reduces revenue through changes to Family Health Plus
Provisions affecting nursing homes:
- Eliminates annual Medicaid rate inflation factor
- Reduces the amount of existing reimbursement for nursing homes
- Raises tax on gross income from 5 percent to 6 percent
Source: Healthcare Association for New York
The Associated Press contributed to this report.
Staff writer Liz Hacken can be reached at 253-5311 ext. 267 or elizabeth.hacken@lee.net
But representatives of health care associations statewide don't see it as more than just shifting the burden.
Pataki is catching flack from both sides on his proposals. Counties want the cap on Medicaid costs changed and health care advocacy groups feel the plan unjustly punishes facilities that are already struggling to get by with meager Medicaid reimbursements.
"He's stuck in this hard place of what to do," said Chris Rogers, Auburn Memorial Hospital administrator.
Three of the largest health care provider associations in the state - the Healthcare Association of New York State, the New York Association of Homes and Services for the Aging, and the New York State Health Facilities Association - united to study the effects of Pataki's proposal.
Their report estimates providers in the 14-county Central New York region - including Cayuga County - could stand to lose $61.3 million, with $25 million coming from nursing homes and $36.3 million from hospitals.
Of the nursing homes and hospitals in Cayuga County, Auburn Memorial Hospital stands to lose the most from Pataki's proposal. Rogers estimates combined losses from the hospital and its affiliated Finger Lakes Center for Living could reach $750,000 in 2005 if Pataki's proposal remains intact.
"These are devastating cuts," he said.
To offset the loss, the hospital would have to delay larger purchases like medical equipment, Rogers said, but that can only happen for so long. He and others hope Pataki will rethink his changes.
"From a structural side, the governor at least realizes there is a problem," Roger said. "If you can't see it, you can't fix it. At least now he sees it."
Steve Ash, administrator at Mercy Health and Rehabilitation Center, hasn't yet determined the effects if Mercy's Medicaid reimbursements are reduced under Pataki's proposal. Based on NYAHSA estimates, Mercy could lose $465,000 in 2005.
"This is a dance that happens every year," Ash said. "I'm hopeful there are some concessions that will have to be made, although we may not restore everything."
Rising hospital costs in labor and higher pharmaceutical expenses have outpaced the rate at which Medicaid reimbursements adjust yearly. Pataki's proposal could eliminate or severely cripple those inflation rates, which would compound the problem, health-care officials said.
"They need to look somewhere else other than nursing homes and hospitals. They don't pay us enough to cover our Medicaid costs," Ash said. "We're struggling by as it is before any of these cuts would come into effect."
In 2003, 53 percent of hospitals didn't make enough to break even, despite a 4-percent operational profit health-care economists suggest hospitals should meet.
"The governor wants to tax a segment of the health care industry that we feel is least able to survive taxation," said Matthew Cox, spokesman for HANYS, which represents more than 550 nonprofit and public hospitals and other health care organizations statewide.
There are some parts of Pataki's plan that HANYS agrees with, such as the Health Care Efficiency and Affordability Law.
It would create a fund to cover debt if failing hospitals close in the name of a more efficient health-care system overall and fund technology upgrades at hospitals that remain open.
But overall, Pataki has a long way to go, Cox said.
"We don't like the governor's solution to the county's plea for help because it will damage the health-care system," he said. "What we believe the governor has done is shift the burden to providers and call that health-care reform."
HANYS' opposition to Pataki's cuts has not pleased all of its members. Kaleida Health, Buffalo's largest health care system, pulled out of the organization last week. Kaleida did not agree with the organization's "unequivocal opposition" to Pataki's proposal to form a bipartisan commission to identify and make recommendations about underutilized hospitals and nursing homes, said Kaleida chief executive William McGuire.
While there are different parts of Pataki's proposal that health-care agencies and the counties take issue with, they agree some changes need to be made.
"Like counties, we are not thriving in the current environment," Cox said.
"Hospitals can relate to the situation that county governments and even state governments face, having trouble matching expenses to revenue."
The New York State Association of Counties has pushed for Medicaid reform for years. Counties across New York have blamed increasing property taxes - and sales taxes in Erie and Oneida counties - on skyrocketing Medicaid contributions.
Pataki's plan includes one of NYSAC's major reformative measures: a cap on county contributions to Medicaid.
But the association wants to see a hard cap set at the 2003 level.
Another essential part to the success of Pataki's budgetary proposals is cost containment measures.
But getting everyone on board should be the focus at this point in the process, said NYSAC spokesman Mark LaVigne.
"To have anything change, everyone has to have consensus," he said. "If we don't, then we'll be back at square one, and we can't go back to square one."
Big changes
The governor's proposed budget includes these key health-care measures, according to health-care trade organizations:
Provisions affecting hospitals:
- Imposes a 0.07 percent tax on gross income
- Eliminates annual Medicaid rate increase intended to reflect raising costs
- Reduces revenue through changes to Family Health Plus
Provisions affecting nursing homes:
- Eliminates annual Medicaid rate inflation factor
- Reduces the amount of existing reimbursement for nursing homes
- Raises tax on gross income from 5 percent to 6 percent
Source: Healthcare Association for New York
The Associated Press contributed to this report.
Staff writer Liz Hacken can be reached at 253-5311 ext. 267 or elizabeth.hacken@lee.net
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