New York Implements Medicaid Cuts, Transparency

Published July 5, 2011


A new Web site will allow New Yorkers to monitor and track the progress of state goals for cuts and efficiency reforms to the state’s costly Medicaid program, which currently spends more on Medicaid than Texas and California combined.

Created by Democrat Gov. Andrew Cuomo, the New York State Medicaid Redesign Team is a public/private partnership tasked with controlling costs and improving quality in the state’s $58.3 billion Medicaid program. With the launch of the Web site in June, citizens are able to see how cost-containment efforts are progressing toward budget officials’ goal of keeping rises in New York’s Medicaid spending on par with the Consumer Price Index.

Costly Care System

The Empire State has less than 7 percent of the U.S. population, but it spends about 14 percent of the nation’s Medicaid dollars. Devon Herrick, a senior fellow with the National Center for Policy Analysis and author of “Medicaid Empire: Why New York Spends So Much on Health Care for the Poor and Near Poor and How the System Can Be Reformed,” says the state spends more because of government policies that encourage higher spending and discourage cost control.

“In 2004, New York’s Medicaid program was spending more than $50 billion a year, half of which was paid by federal taxpayers,” says Herrick. “Essentially they used the state’s Medicaid program as an economic development stimulus. They tolerate waste and abuse in the system as long as it benefits favored constituencies like hospitals, labor unions, doctors, schools, social workers, etc.”


Unsustainable Path

This year the cost of New York’s portion of the Medicaid program was expected to grow 13 percent, according to Morris Peters, a spokesman for the New York State Division of Budget. According to Peters, Gov. Cuomo turned to stakeholder groups to demand change.

“The trajectory for Medicaid was unsustainable,” said Peters. “Something had to be done. So the governor put all of the Medicaid stakeholders at a roundtable discussion. Hospitals, providers, labor, etc., all came to the table. He gave them a target, and they arrived at a consensus on how Medicaid could reach this goal.”

Peters said the group was assigned to find $2.3 billion in Medicaid savings and limit the state’s share of the program to $15.1 billion.

“By tracking the programs and making the information available in one place, we hope to make the process more transparent,” says Peters.

Peters says he is optimistic citizens will be able to understand and interpret the monthly cost data displayed on the Web site..

“Medicaid finance is complicated, but we’ve made these reports as user-friendly as possible. They’re written in plain English, free from industry jargon,” he said.


Kenneth Artz ([email protected]) writes from Dallas, Texas.


Internet Info:


National Center for Policy Analysis: “Medicaid Empire: Why New York Spends So Much on Health Care for the Poor and Near Poor and How the System Can Be Reformed”


New York Department of Health: Redesigning New York’s Medicaid Program