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Single-payer bill is bad medicine for New York

The state Assembly Health committee is holding hearings across New York, including one last month in Rochester, seeking input on the “New York Health” bill to create a single-payer system. The New York Health Plan Association, whose member health plans have partnered in state efforts to expand access to and improve quality of care to New Yorkers, feels strongly this legislation is bad medicine for New York.

The bill’s sponsors have an unrealistic, utopian view of a universal health care system where everyone and everything would be covered, and the system would magically pay for it all. The chasm between this idealized world and reality is great, and this proposal lacks any infrastructure to bridge it.

The most significant flaw is the proposal to fund coverage using federal monies now used for Medicare as well as federal and state dollars that go to Medicaid, Family Health Plus and Child Health Plus, coupled with additional state taxes. Sponsor suggestions include increased personal income tax and a surcharge on business income taxes or a payroll tax. 

In addition to destroying Medicare as we know it, disrupting the health care delivery system for nearly 3 million elderly and chronically disabled New Yorkers, this proposal ignores the fact that New York has no authority over another almost 7 million New Yorkers who are covered by self-insured plans—approximately 36 percent of New York’s insured population. The sponsors would not only propose forcing these people to give up coverage they have and presumably like, but also impose new taxes on their income and payrolls to pay for it.

The plan also fails to take into account more than $4.8 billion in Health Care Reform Act surcharges and other taxes New York currently assesses on health insurance, as well as the many programs funded by these taxes. The need to pay for New York hospitals’ bad debt and charity care, the graduate medical training of thousands of doctors, and numerous other programs—such as the AIDS Drugs Assistance Program and workforce retraining—would not disappear.

Sponsors presume providers will accept reimbursement at government set levels. Doctors and hospitals already argue Medicaid and Medicare reimbursement doesn’t cover their costs, and these providers expect government program losses to be paid for by shifting costs to private commercial insurance payments.

At both the federal and state levels, Medicare and Medicaid are increasing the use of private-sector managed care to provide for a growing number of beneficiaries including various special-needs populations. It’s the cornerstone of the Cuomo administration’s Medicaid Redesign Team program and, at the federal level, the commercial Medicare Advantage program. The goal—and reality—of expanded managed care is more comprehensive care that leads to improved quality outcomes while also realizing the highest value for every Medicaid and Medicare dollar.

Except by setting government limits on prices, the proposal does nothing to realign the myriad factors that contribute to our current escalating health care costs. Failing to take any steps to rein in utilization or rising hospital and drug costs, price controls will have the undesired effect of virtually eliminating innovation and efficiency.

The bill also promises to promote improved quality of and access to health care services and improved clinical outcomes, with no mechanisms to deliver the promises. Meanwhile, it disregards current tools—the Healthcare Effectiveness Data and Information Set and New York’s Quality Assurance Reporting Requirements—that are proven systems that both measure and report quality, and have track records of improving quality of care delivered over time.

Finally, the bill completely ignores the significant contributions New York’s health plans make to the state’s economy. From providing good jobs to New Yorkers—thousands in the Rochester area alone at MVP Health Care and Excellus BlueCross BlueShield—to paying property and payroll taxes, to investing in community-based organizations and making charitable contributions, New York’s health plans make a positive impact on New York’s bottom line each year and this proposal would undo that.

Paul Macielak is president and CEO of New York Health Plan Association.

1/2/15 (c) 2015 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email rbj@rbj.net.

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