City & State: High Expectations for Cuomo vs. Medicaid, Round 2

Gov. Andrew Cuomo resolved in his first State of the State address to overhaul New York’s mammoth Medicaid program, a $52 billion system threatening to cripple the state’s budget. And for the time being at least, he appears to have made good on his promise, healthcare analysts said.

“I don’t know that I’d ever use the word revolution, given that they tend to be violent, but it obviously is a major shift, in vision and policy in Medicaid,” said James Tallon, president of the United Hospital Fund.

What remains unclear is whether the proposed changes can be sustained over the long term, in part because some savings are dependent on a complicated reorganization of healthcare for the state’s most costly population — low-income seniors and people with long-term disabilities.

Cuomo’s plan to reform the state’s Medicaid system is in fact a two-year plan, with the first year’s savings coming from an agreed-upon set of rate cuts, and in later years dependent on a reorganization of the state’s healthcare delivery system. The plan was devised by the Medicaid Redesign Task Force, a group of hospital executives, union bosses and other healthcare professionals normally at each others throats during budget season.

But the relative ease of cuts in the first year suggested the degree that politics had played in thwarting prior efforts to cut spending, said Elizabeth Lynam, a budget analyst at the Citizens’ Budget Commission.

“It wasn’t as painful as one might have believed, and that suggests to me, the money came out of the system, well then there is more to go. We’ve really scratched the tip of the iceberg here,” she said.

The political agreement was as much a reflection of the governor’s political skill, as it was the failures of the U.S. Congress to agree over how to spend its healthcare dollars, Tallon said.

“In contrast to the chaos and uncertainty coming out of Washington, Albany contrasted well, simply because there was a certainty and a focus in the governor’s leadership that was lost in the uncertainties that largely resided in the Congress,” Tallon said.

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