Below the Belt: Governor Paterson Tries a Little Medicaid Reform

03/10/2009 07:03 pm ET | Updated May 25, 2011

As we approach some form of national health insurance, a little noticed battle in New York contains many messages for the future. New York State is the center of the nation's massive medical industry. Its medical schools are the most concentrated training ground for the nation's doctors. Its Medicaid costs of $45 billion a year are three fold the cost per population represented by the $34 billion that California, the second state in overall costs, pours into Medicaid.

But, for all the billions, New York's levels of "over-service" and under results---including terrible ethnic and racial disparities and startling chronic disease death rates--- are notorious. Indeed, the state's massive medical industrial complex is so used to gorging on surgery, intensive and very expensive---although largely futile---"end of life" care and ever more costly technology, that it is considered perfectly acceptable to starve primary care.

Primary care is---you know---those regular doctor visits for inoculations, examinations and early care that help prevent much worse problems. Until increased by Governor David Paterson last year, reimbursement for a primary care Medicaid visits hadn't moved for 12 years. During this long period of primary care starvation, hospitals so overbuilt themselves, at massive cost, that the state health department a few years ago said the state had ended up with 20,000 unneeded beds. Even the HealthCare Association of New York State, what is known as "an industry group," conceded that 7,000 were useless.

But that hardly means New York is allowed to change and improve. The worse its statistics and costs get, the more its huge hospital industry battles the least effort to rationalize spending so money more contributes to actual health.

The levels of attack now being directed at Governor Paterson for funding modest, but key moves to support primary care and the kind of prevention so needed in an age of chronic disease are staggering.

Nationally, the governor, who is legally blind, is known for some rather awkward parodies undertaken by Saturday Night Live and needlessly insulting the Kennedys in the course of naming a replacement for Senator Hillary Clinton. Within the state, he is known for good manners, inconsistency and plunging poll numbers. However, in the year since he took over from Eliot Spitzer, his interest in health care reform has actually been consistent---and even eloquent. It is a subject he speaks about often, with knowledge and passion, referring to prevention as "the most underutilized beneficial health care treatment that we have."

The idea that he would propose to move a mere $300 million a year of the state's total $14 billion in federal health stimulus funds from Medicaid to prevention programs prompted medical industry "leaders" to tell the New York Times that they had been "betrayed"! For weeks, the Governor has been pounded by an ugly---and dishonest---multi-million dollar campaign of TV commercials which claim that he is pushing hospitals into bankruptcy and emergency rooms to close---even laying off nurses. (We all know the nursing shortage is such that no qualified nurse in New York or any other state would be without a job.) Unprecedented, highly personalized and substantially false, the commercials, sponsored by the Greater New York Hospital Association and SEIU 1199, its biggest healthcare union, condemn him for "the worst cuts" ever seen in health care, when in fact the state health budget is still increasing.

The ugliest segment in these commercials features a blind man in a wheelchair who addresses the blind governor to whine, "Why are you doing this to me?"

Will Paterson be able to withstand these attacks? At a recent talk at the New York Academy of Medicine he said he intended to do so because "the basis of health is not to go on and on absorbing the pain of society but to create new opportunities."

In chronic disease, the opportunities to create health---instead of huge costs and vast suffering and disability---are now squandered across the nation. The National Institutes of Health, for one example, has conclusively proven that educating and coaching "prediabetics" to lose modest amounts of weight and to moderately exercise is twice as effective---and far cheaper---in preventing their progression to outright diabetes than standard medication. But, almost none of the nation's 54 million prediabetics receive this coaching and education and Medicaid, as now constituted, generally will not pay for it; instead, the nation goes on and on performing 88,000 diabetes-related lower-limb amputations year after year, most unnecessary and most paid for in public funds!

Working as I do in the South Bronx, the poorest urban Congressional District in the United States, and watching the number of wheelchairs seen on the sidewalks visibly increase year after year, I sometimes wonder whether anybody will be left in poor communities who can actually walk before the United States finally implements proven diabetes prevention.

Overall, the Milken Institute estimates that, with modestly better prevention alone, the nation could avoid 40 million cases of chronic disease in the next 15 years and save $1.l trillion in medical costs, disability and lost economic activity! Preventable and poorly treated chronic disease, as the Partnership for Chronic Disease underscores, is the single source most escalating American health care cost increases.

Strikingly, none of this--- not modest reforms in prevention, not even life and limb saving diabetes education--- were woven into the stimulus funds. In other words, $ 87 billion in "new" Medicaid money was "allocated" in a way that just reinforced an arteriosclerotic health industry that out rightly--- blatantly--- acts in ways that injure the nation's overall health. If Governors choose to duke out the level of attack seen in New York, yes, they can move some of their Medicaid "stimulus" into real prevention. How many will?

The Obama Administration could have made at least a gesture toward change with a basic provision that some part---even 1%---of the $87 billion had to go real prevention, but it didn't. That's their bad and also something to think about as we proceed to national health insurance.