New York under Gov. Andrew Cuomo has been able to tame Medicaid costs by bringing together service providers and health care unions to find ways to save money.

But Medicaid patients themselves can also play a bigger role in that process.

Medicaid, which provides health insurance for 6.4 million New Yorkers, is the single most expensive item in the state budget, costing more than $22 billion in fiscal year 2016. Local governments have to kick in another $8 billion, chiefly from property and sales taxes. The rest is paid by the federal government.

The entire New York Medicaid program will cost taxpayers more than $62 billion this year. Much of that expense is for the care of a disproportionately small group of patients: Nationally, just 1 percent of Medicaid consumers are responsible for 25 percent of the costs. These patients typically have five or more chronic conditions, such as obesity and diabetes.

In other words, the most expensive part of our Medicaid program is the people whose conditions are caused or worsened by lifestyle choices.

Rightly, federal regulations prohibit New York and other states from dropping people from Medicaid — no matter how poorly they follow doctors’ instructions or continue unhealthy behaviors. The only option left to states is to use incentives as a way to encourage Medicaid patients to do the right thing.

The state Health Department has begun offering cash and non-cash incentives to encourage Medicaid patients to lose weight, exercise and address other causes of chronic illness. But less than 1/10th of 1 percent of Medicaid patients are participating in these programs.

It may seem odd to suggest making cash payments to people who are already collecting so much from the taxpayers, but the incentives are a proven means to ultimately lower the price for care, as they pale in comparison to the costs of hospitalizations and other treatments.

New York has hindered its own success by capping the incentives that patients can receive. While the federal government won’t reimburse the state for greater payments in the future, research has shown that larger incentives than those currently offered could produce even greater results for patients dealing with mental illness, drug addiction or other conditions that require especially strict adherence to medical instructions.

Other states have shown promising results with their own incentive programs, such as requiring Medicaid patients to use Health Savings Accounts and waiving their copays if they follow instructions, take their medication and get immunizations.

Others have provided Medicaid patients with opportunities that will help them lose weight and improve their diets.

Albany doesn’t need to limit itself exclusively to carrots in this approach, because the taxpayers also have a few sticks at their disposal.

For example, the state could also request permission from the federal government to penalize the welfare cash benefits of Medicaid patients who fail to follow their doctor’s orders — and ultimately cost taxpayers more when their conditions worsen.

And the state needs to lobby the federal government to come to grips with policies that are actually working against the best interests of patients.

For example, taxpayers are paying, through the Food Stamp Program, for sugary beverages that lead to obesity and diabetes among the same clients enrolled in Medicaid, thus driving up public health care costs.

To be sure, patient behavior is not the only part of the state’s Medicaid program that needs to be modified. Connecting patients with primary care physicians, basing payments to providers based on positive outcomes rather than the number of costly procedures performed and getting patients to stop using emergency rooms for primary care, is imperative, both to control costs and to improve the health of those on Medicaid.

By virtue of its size and mediocre health results, Medicaid’s massive costs warrant all the creative thinking that Albany can muster. New York taxpayers can’t afford anything less.


You may also like

Don’t Copy New York’s Medicaid Home Care Disaster

As America ages, states are investing in home-based care for the elderly and disabled in hopes of keeping people out of nursing facilities—and maybe saving money in the bargain. Before going Read More

NY must prune its bloated Medicaid program — and focus on improving low-quality care

The coronavirus pandemic exposed a fundamental imbalance in New York’s approach to health policy: Albany spends too much money on its bloated Medicaid plan but neglects the public-health programs that used to be the Health Department’s main focus — Read More

Blame Cuomo for New York’s Medicaid crisis

When it comes to New York’s latest Medicaid mess, the buck stops with Gov. Andrew Cuomo. Read More

Takeover of Medicaid local share is easier said than done

New York pushes more of its Medicaid expenses onto local government than any other state — an almost $8 billion cost-shift that contributes to high property taxes from Montauk to Niagara Falls. Read More

Cuomo’s cynical abuse of a crisis that didn’t come

The past year has been a roller-coaster for New York’s health-care system, as Congress tried repeatedly to scale back Medicaid and dismantle the Affordable Care Act while allowing other health-related programs to lapse. Because New York depends so heavily on federal health dollars, it had more to lose than almost any other state. Read More

Medicaid Is Broken – Let the States Fix It

Medicaid, America’s safety-net program for more than 62 million low-income uninsured Americans, is broken. It’s broken at the state level, where program costs are swamping state budgets. Read More

Funds Could Help State Streamline Services

New York operates the largest network of programs for the poor in the nation. It serves more than 5 million Medicaid clients at a cost of $54 billion annually. Read More

Fixing NY Medicaid

New York’s Medicaid program is now testing, on a small and limited scale, giving people financial incentives and requiring compliance in changing their behavior. The approach has promise — if done right; it’s important to keep in mind the lessons of welfare reform. Read More