A working group charged by New York Gov. George Pataki with recommending reforms for New York's ailing healthcare system found a broken-down hospital system in desperate need of "inevitable, large-scale, rapid change."
Among its recommendations in its third and final report to Pataki, the Health Care Reform Working Group recommended a restructuring and "right-sizing" of the hospital system by encouraging closures, consolidations and conversions of hospitals to new uses. The working group, which was convened by Pa-taki in 2003, also said the methodology for the state's charity-care and bad-debt pool needed to be changed to divert more funds toward hospitals with large numbers of Medicaid and uninsured patients. The panel also suggested that charging fees to providers who perform certain procedures or services in private offices could fund hospital emergency services and disaster-preparedness activities.
The group suggested a complete restructuring of the Medicaid reimbursement rates, noting that rates for "high-end" services such as cardiac and vascular surgery are "disproportionately generous when compared to the reimbursement rates for `safety net' services such as emergency services, births and trauma services." The incongruity encourages hospitals to buy and overuse high technology specialty services to compensate for the low reimbursement rate for services that benefit the public welfare, according to the report.
Timed to coincide with the oncoming debate over renewal of the state's Health Care Reform Act, or HCRA, which is set to expire in June 2005, the working group noted that it was an opportune time to discuss real reform. Medicaid expenses in the state are expected to grow "at a staggering rate of 9.5%" next year, while high-profit services are increasingly moving to nonhospital settings, the group said. Hospitals are left to provide for core health needs, which, though essential, provide inadequate reimbursement under the present rate system.
The report also noted "another hard reality. In New York, we spend far more on healthcare than other states, without achieving dramatically better health outcomes for New Yorkers."
Any money saved by the restructuring and reform efforts should be reinvested in the healthcare system, the working group said.
"It's a constructive beginning to the upcoming HCRA debate," said Kenneth Raske, president and chief executive officer of the Greater New York Hospital Association. "There's a lot in the report I think we can build upon to create a better healthcare system and at the same time save some Medicaid funds. ... It's a thoughtful and progressive report."