THE BLOG
02/22/2011 05:44 am ET Updated May 25, 2011

NY Hospital Execs Try to Change Medicaid Rules Behind Closed Doors

Whatever has been going on behind the closed doors of Governor Andrew Cuomo's Medicaid Redesign Team, loaded with self-dealing lobbyists and hospital executives who make Wall Street level salaries, it's time for New Yorkers to say enough.

Many have already complained about how this Team has been dominated by hospital and industry lobbyists, with consumer or patient advocates mostly excluded. Now we find out that these lobbyists are using this process not to save Medicaid money, but to execute a backroom deal that could create a financial windfall for negligent hospitals, incompetent health care providers and their insurance companies.

Essentially, their proposal (known a Proposal #131, found here), which they may intend to push through the budget process with no public airing, would severely limit hospitals' liability for killing or injuring patients. Yet we know that many New York hospitals have notoriously bad safety records, especially in low-income communities, and too many babies suffer brain damage at birth as the result of poor medical care. These children, who are often on Medicaid, are able to get off Medicaid because settlements or verdicts pay for their needs.

However, this Team is seriously considering a Draconian "cap" on non-economic damages in all medical malpractice cases, an industry-crafted measure that arbitrarily limits compensation and promotes a kind of caste system by branding entire classes of low- or non-earners in our society (seniors, children, women who do not work outside the home, and the poor), as worth less than their wealthier counterparts, and make it difficult for these cases to even make it to court.

But here is what's even more horrific: they want to target for even worse legal treatment possibly the most vulnerable of all New Yorkers - brain-damaged babies. According to this idea (see our analysis), newborns and moms would be forced into a new liability system that denies them the same kind of rights and recourse that adult men have in this state. Even if the catastrophically-injured babies' family were able to bring a lawsuit, the sketchy public details about this proposal suggest that they would be condemned to a lifetime of additional suffering as they are forced to deal with a burdensome and humiliating struggle to get bills paid from a unaccountable insurance-funded entity.

What's more, according to Proposal 131, all insurance consumers would be forced to subsidize this negligence with an insurance surcharge or tax, presumably to be passed onto all individuals and small businesses. So this proposal would not only create a windfall for hospitals on the Team, it would put the state in the shocking position of subsidizing the commission of medical malpractice. This is even though Health Grades, a company that measures health care safety, placed nearly half of New York's hospitals among the lowest percentile in patient safety, and 7,000 New Yorkers already die in hospitals as a result of preventable medical errors in hospitals each year, with hundreds of thousands more injured

One would think the first thing hospitals should be doing is reducing claims and lawsuits by working to decrease preventable errors in hospitals, reducing injuries and deaths. But this isn't about patient safety. It's about self-dealing and greed. Just take a look who's demanding this disgraceful deal.

There's Medicaid Redesign Team member Ken Raske, President of the Greater New York Hospital Association (GNYHA) and Proposal #131's main proponent. According to Crain's most recent salary review, Raske is one of the country's highest-paid health association executives, making over $3 million in 2008 (without any pain and suffering at all, by the way). Healthcare Association of New York State President Dan Sisto, also on the Team, is another one. He made $753,498 that year.

Here's an example of some of their hospital members, according to Crain's review of 2008 executive salaries:

There's Dr. Herbert Pardes, president and CEO of New York-Presbyterian Hospital. He made almost $10 million in 2008. The chief executive of Bronx-Lebanon Hospital Center made $4.8 million. At Montefiore Medical Center, "four veteran execs were top earners because of hospital-funded supplemental executive retirement plans or SERPs--worth a total of some $12 million--that accrued during the management team's 20 years there."

In fact, according to Crain's, the 21 top-earning New York hospital executives collectively earned $64.3 million in 2008. If New York simply capped annual hospital executive salaries to the level of the "cap" to which they want to condemn the sick and injured for a lifetime ($250,000), we'd have $63 million for the Medicaid budget, right there.

The New York State Medicaid Redesign Team is rife with conflicts of interest and self-dealing hospital executives, who have used this closed, backdoor process to create Draconian proposals that have nothing whatsoever to do with saving Medicaid money and has no business being part of a Medicaid reduction effort. The brain-damaged baby fund is a budget gimmick that will harm babies, cost all insurance consumers more money, and generate a financial windfall for those running New York's health care industry as a quid pro quo for buying the industry's political support for the state budget.

We must not tolerate using brain-damaged babies as a state budget political bargaining tool. Reducing compensation to families with catastrophically-injured babies, which must support them for the rest of their lives - including when their parents pass on - raises profound questions about what kind of a society we value. Very simply, this issue is about whether we as New Yorkers value industry profits and the multi-million dollar salaries of rich executives over brain-damaged babies. New Yorkers should stand up and say no to Proposal #131.

Editor's Note: This post has been modified from its original version.