In a prelude to next week’s budget message, Gov. Spitzer today delivered what was billed as a major address on health care reform. The real importance of the speech was encapsulated in its title: “Patients First.”

What the governor described as an agenda for reforming the health system consisted largely of broad themes rather than specifics. But what really mattered was his paradigm-shifting redefinition of the core issue in Albany’s health care wars.

“Our agenda is based on a single premise: patients, not institutions, must be at the center of our health care system,” Spitzer said. “That means that every decision, every initiative and every investment we make must be designed to suit the needs of patients first. The result will be a high-quality health care system at a price we can all afford.”

He continued:

This guiding principle stands in stark contrast to the principle that has guided health care policy for the last decade. Instead of a “patient-centered” approach to health care policy driven by the needs and demands of New Yorkers, we have had an “institution-centered” system.[snip]

For too long, government has ignored the inevitable changes in health care delivery, technology, financing and planning. For too long, we have stared at the opportunities posed by progress, and made poor choices or simply no choices at all. For too long, we have financed the health care system we have, not the health care system we need. So we’re left pumping billions of dollars into a broken system with no deliverables and no accountability.

[snip]

What went wrong is that health care decision-making became co-opted by every interest other than the patient’s interest. Government abdicated its responsibility to set standards, demand results and hold institutions receiving billions in state tax dollars accountable to the State and to the people those institutions serve.

The governor’s critique of the costly and wasteful institutional bias in the state’s health care funding system was right on the money.

And it would be a mistake to dismiss all this as mere rhetoric.

In decisively breaking with the unspoken consensus behind Pataki-era state health policy, Spitzer took a giant first step in the right direction.

Whatever detailed policy prescription the governor may propose in the future, he has highlighted a goal that everyone can–and should–agree on. This is a tremendously valuable contribution.

Of course, as virtually everyone who was in the room for the speech observed afterwards, the devil will be in the details. The most specific Medicaid-related initiative Spitzer cited will be a freeze on the inflation factor for hospital and nursing home reimbursement rates, and a partial freeze on managed-care rates under the program. When George Pataki proposed the same sort of thing, he was excoriated by hospitals, nursing homes and their union allies–and, not by coincidence, he was also unsuccessful. But that doesn’t mean that freezing the rates isn’t the right thing to do. Flush with unspent political capital, Spitzer is in a stronger position to pull it off. The refreshing “patients first” slogan certainly puts the emphasis where it belongs, which should help put his opponents on the defensive.

To be sure, the final two-thirds of the speech left plenty of blanks to be filled in. To cite just a few examples:

* The governor was highly critical of the state’s Graduate Medical Education (GME) subsidies, noting per-student costs that are more than triple those in California’s similar program and saying the money was being wasted on non-existent students. But he sidestepped the question of why New York should continue to provide any subsidy for the training of physicians who will, after all, mostly end up practicing in other states. Instead, he pledged “we will continue to invest in graduate-medical education at our academic medical centers and teaching hospitals.”

* He said he wanted the federal Medicare Part D program to “cover the drugs needed by people on Medicare: seniors and people with disabilities,” but also stressed that he wants to “strengthen the state’s preferred drug list” for Medicaid, implying a more limited formulary, while promising that “physicians will always be able to ensure patients get the drugs they need.” Depending on how it is interpreted and implemented, there may be a chance this will end up making sense.

* While the governor’s criticism of institutions in general was offset by praise for doctors, nurses and health care workers in particular, Spitzer continues to reserve unequivocal scorn for health insurance companies and HMOs. He promised to crack down on their payment practices, without saying a word about the state regulations that limit the ability of insurers to issue more affordable policies that people want–and that discourage more companies from entering the under-served New York market. A “patients first” approach also implies a willingness to give patients more autonomy and choice in the selection of their insurance plans and providers–and it’s still possible that the governor will arrive at the same conclusion.

There will be plenty of time in the weeks and months ahead for debating and dissecting the specifics of Spitzer’s health care proposals as they are fleshed out. In the meantime, the governor has established the best possible framework for moving ahead with the kind of reform New York needs.

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About the Author

Tim Hoefer

Tim Hoefer is president & CEO of the Empire Center for Public Policy.

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