Saturday, February 19, 2011

More on New York and Medicaid

Following up on the last post, which got heavily side tracked about two minutes into writing it requiring a change of course, this post is on what I originally intended to discuss.

First home home care:

Care delivered at home by health aides trained to handle minor medical tasks grew by 90 percent per recipient from 2003 to 2009, to reach more than $15,500 a year. Personal services delivered by nonmedical attendants, such as assistance with dressing and bathing, grew by 38 percent, to reach almost $30,000 a year. Right now this care is mostly delivered on a fee-for-service basis with hours of care determined primarily by the providers who have an incentive to run up the bill with more and more services.
 If I was at work I'd have an excellent article to quote from on this, however I don't have it so this will be more general.  An issue I have with this is that there is a huge discrepancy between these kind of benefits through most of the state and these benefits in New York City.  The article I alluded to looked at 24 hour nursing care in the rest of the state compared to New York City, New York City had more than a magnitude difference in proportion of people receiving 24 hour nursing care relative to population compared to the rest of the state.

There is of course a good reason for part of this, care in facilities is higher in New York City than in the rest of the state so there is a larger group where the marginal cost of providing 24 hour care is still lower than the cost of care in a facility.  Still, this doesn't explain the entire discrepancy by a long shot.  So an examination of how these programs are run could easily find savings to be had by simply making the local bureaucracies adhere to in state best practices (though it should be noted that areas in the rest of the state would probably benefit by providing 24 hour care more frequently since this would often be cheaper than institutional care, savings can be had on both ends).

To bring this up to a more general level, this is partially the result of a problem I constantly harp on, the lack of centralization in our government.  Part of the problem is that New York City has a quite powerful local health system that can resist pressure from the state as a whole whereas local areas have to adhere to state oversight more closely.  New York City is able to set a lot of its own rules and there really isn't anyone that can easily tell them otherwise (though I believe New York City is being sued by the feds for this since some of the money is Federal Medicaid dollars, but it took them quite awhile since this is an additional level down from their normal oversight and largely outside their control).

This is something I see a lot in looking at governments.  More bureaucracy is often a sign of a weak central government and institutions, the inability to get results from an initial reform leads to a multiplication of new agencies seeking to resolve problems that the initial bureaucracy didn't impact.  A key sign of too much decentralization is a proliferation of agencies with overlapping jurisdictions, in a state with adequate integration and a powerful central government much clearer lines of authority are apparent and few agencies or departments have overlapping jurisdictions and the areas of oversight between levels of government are clear.  This is rarely the case in US bureaucracies where authority is often disputed between levels and agencies have often contradictory mandates and overlapping missions.

An example of this in New York State is Cuomo's proposal to unify three financial oversight agencies into one, the three way division was a sign of weak state authority and their integration is a sign of increasing state authority (if it is successful, these things often stay separate because a reformer finds his government weaker than he believed, we'll see what happens).  Another New York example is Cuomo's promise to eliminate and consolidate the large number of local jurisdictions into more rational and efficient larger ones, if he succeeds in this it would be a key sign of reassertion of state authority after a period of weakness (many of these jurisdictions have long histories dating back to when the state was stronger, however reform movements tend to only tackle a few pieces at a time and previous strong state governments tackled other issues, we could use some public sector union bashing as well, but this seems to be an area this government will leave untouched, probably to be handled by the next strong administration).

That digression was longer than planned.  I'll breeze through  my next point quickly.  Another issue I keep seeing with a lot of benefit programs is that they are designed to keep people in place.  With a single state budget and huge cost disparities across the state this is madness.  While it is necessary to provide services to those who need them, it isn't necessary to work hard to keep them where they are (and when dealing with crime related issues this is frequently a powerful negative, getting these people elsewhere is often the single most effective intervention that can be made to effectively reintegrate them into law abiding society).  Paying extra benefits to people living in high cost areas acts as an effective employment subsidy to people in these areas wishing to hire low wage labor, which without the subsidies would have to pay higher wages.  Of course, simply cutting off benefits would likely just lead to social problems.

A partial solution isn't hard to see though (partial because only some people will take it while many will not, using coercion would be absolutely terrible and evil and is not what I'm suggesting, only that we provide options).  Provide benefits specifically to help people receiving assistance to look for work in lower cost areas of the state and subsidize the move.  For people that might be getting benefits the rest of their lives, getting them out of an expensive city like New York and into a cheaper city like Rochester might be the best thing you can do both for their future employment prospects and chance of being self sufficient and for state budgets which will have to pay far less to support them in Rochester than it does in New York City.  Once they're old enough to receive nursing home benefits the cost savings will be even more substantial.  Our attachment to keeping people in place is one of our most destructive cultural habits and I am constantly frustrated that we don't make consistent efforts to make it easier for people to relocate from high cost to lost cost areas.  This is just a huge opportunity to increase our efficiency that goes untapped year in and year out.

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