The Medicaid by State data cube, published by the Center for Medicare and Medicaid, is only finished when the last state gets the required information in. Based on past experience I have learned to not bother looking for the data from two years ago until December, but in this case when I looked all 50 states had been in since early October. I have belatedly downloaded a couple of crosstabulations – one by type of service and state (attached), and one by age of beneficiary and state (next post). The patterns remain consistent with past years. New York State continues to spend a large amount overall, despite low spending in some cases. New York State accounted for 6.5% of the people in the United States, 7.3% of the poor people (2006 data) and 9.3% of poor Americans over age 65. The large share of older Americans in poverty is related to our large share of older Americans overall, an outgrowth of slow population growth that we share with the rest of the Northeast. New York State accounted for 8.6% of all U.S. Medicaid beneficiaries, somewhat above its share of the poor. Adjacent Northeastern states (New Jersey, Connecticut, Pennsylvania, Massachusetts and Vermont), on the other hand, collectively accounted for 10.7% of Americans, 8.9% of poor Americans, 10.3% of poor Americans over age 65 – and 8.3% of Medicaid beneficiaries, somewhat less than their share of poor Americans.
New York State accounted for 7.6% of the nation’s personal income. It would have been more burdened by Medicaid than are other states even if it also accounted for an equal 7.6% of U.S. Medicaid spending, since the federal government requires New York State to fund a larger share of the Medicaid spending within its borders than it does other states. As it is, however, New York State accounted for 14.4% of U.S. Medicaid spending, nearly double its share of personal income. The adjacent states, meanwhile, accounted for 12.5% of the nation’s personal income but just 11.7% of its Medicaid spending.
Like New York, these states have many wealthy people and a higher than average per capita personal income, and like New York the federal government covers only 50% of their Medicaid costs, compared with up to 80% elsewhere. Unlike New York, these states have below average poverty rates. More importantly, despite their location in the higher-cost, higher social benefit, aging Northeast, these states don’t spend as much. Their average Medicaid spending per beneficiary, at $6,725, is 41.2% more than the national average of $4,764. New York State average Medicaid spending per beneficiary is $7,969, or 67.3% above the national average. High spending per recipient, not low federal reimbursement in the face of relatively high poverty, explains more of the excess state and local tax burden (or diminished public services in other categories) in New York. And with New York State’s unique local matching share, that burden is greatest in New York City, where two-third of Medicaid spending takes place but whose residents accounted for just 44% of the state’s personal income.
In general if you want to be ripped off by contractors and affluent people seeking special tax deals, vote Republican, whereas if you want to ripped off by public employee retirees non-profiteers, vote Democratic. Here in New York there has been enough cooperation to rip us off both ways, but despite the 12-year reign of a Republican Governor, the Democratic ripoffs predominate. Thus, the provision of health care through business – HMO Capitation plans – is not that expensive here. Spending per beneficiary in New York is 14.4% above the national average, and since there is no political push to give HMOs more than they deserve here, that is perhaps a benchmark of what the whole Medicaid program ought to cost per beneficiary, given our higher cost of living and wage rates. New York’s spending per recipient on Drugs is 19.4% above the national average. For private Physicians, New York’s spending per beneficiary less than half the national average, and one of the lowest in the country. No wonder few New York physicians even accept Medicaid, and New York accounts for just 2.2% of national Medicaid beneficiaries. In each of these cases –HMOs, Drugs, and Physicians, spending per beneficiary is significantly higher in the adjacent Northeastern states.
Let’s look at service categories that both account for a significant share of New York State’s $39.3 billion in Medicaid spending in 2005, and for which the state accounts for an unusually large share of national expenditures and/or beneficiariews, given its population. You can start with Inpatient Hospitals and Nursing Homes.
The $5.7 billion spent on Inpatient Hospital Services in New York State was 16.2% of the national total. New York’s spending per beneficiary for this service as 23.9% higher than the national average in 2005; when I began compiling this information with 1997 data it had been 90% above the national average. Yet spending is still high because of the large number of beneficiaries – New York State accounted for 13.1% of Medicaid Hospital beneficiaries compared with 8.6% of all Medicaid beneficiaries. Three possible explanations include New York Medicaid recipients being sicker than average, New York recipients receiving health care in hospitals that takes place in other settings in other states, and New York State recipients receiving care in hospitals for conditions that go untreated in other states.
A fourth possible explanation is that, in order to maximize revenues, New York’s hospitals are providing treatment to those who are in fact from other states and countries, a great deal for everyone except New York State and City taxpayers, and one no one wants to talk about. It would be fine for New York’s health care industry to provide health care for the nation if the nation paid for it, but it is a killer otherwise, something elected officials should bear in mind when considering raising taxes for some kind of universal care just for New York. Anecdotal evidence from those in the business indicates that there is plenty of this going on just under Medicaid, and not just in hospitals.
The mostly costly category of service is Nursing Facilities at $6.5 billion, or 14.7% of the national total. As for hospitals, New York’s spending per beneficiary on Nursing Homes was nearly double the national average when I began compiling this data, compared with 23.1% above average – and just slightly higher than surrounding states – today. This, however, is misleading, as the second attached spreadsheet shows. For the main categories of beneficiaries in Nursing Homes, the old and the disabled, New York’s spending per beneficiary was 49% and 41% above average. The overall average is brought down by a large number (23% of the national total) of “unknown” category beneficiaries with a low level of spending each. I’ve never heard who these unknowns are, or why New York has so many of them. All the explanations I can think of are cynical.
New York State accounts for 12.0% of the nation’s beneficiaries of Medicaid-funded nursing home services, well above its share of the nation’s population, people in poverty, and senior citizens in poverty. This implies that we may have excess people in Medicaid-financed Nursing Homes compared with other places. Yet we also account for 21.5% of the beneficiaries of Home Health Care services and 11.1% of the beneficiaries of Personal Care Services, alternatives credited with “keeping people out of nursing homes” that clearly do nothing of the kind in New York State. Together, these services cost nearly $3.5 billion.
Medicaid spending per Home Health Care beneficiary is below the national average in New York, and the unusually large number of home health care workers here is not well paid, one reason such workers need to be recruited from poor countries abroad. Even so, due to the large number of beneficiaries New York accounts for 20.7% of U.S. Medicaid-financed Home Health Care spending. And, the state accounts for 27.3% of all Medicaid-financed Personal Care spending, due in large part to spending per beneficiary that is 2.5 times the national average. In fact, the average recipient of in-home home health care and personal care in New York costs Medicaid more than the average nursing home resident in the United States. And in addition, New York’s Medicaid spending on Private Duty nurses also accounts for more than 20% of the national total, in part due to spending per recipient that is nearly triple the national average.
This is another subject no one wants to talk about. I read a news report about a paper by the Manhattan Institute issued last February that raised questions about New York’s Medicaid spending on senior services. It was supposed to be the first in a series on “Medicaid in Depth,” but I never read a news article on a second in the series, and cannot find anything like it on the group’s website. The questions are similar to those for hospitals. Are senior citizens in New York sicker than those elsewhere? Or do they feel entitled to more services, while being less likely to receive them from family members, and perhaps more likely to take advantage of the program through financial maneuvers if they are not poor? Are seniors from other states receiving services on our dime? Or are New York seniors moving elsewhere to avoid New York’s high taxes (paying for others), but returning when their resources are exhausted and they require assistance (having others pay for them)? If people are unwilling to ask the questions, we’ll never get answers. In the adjacent states meanwhile, the share of the nation’s Nursing Home beneficiaries is high relative to the overall population, but the share of Home Health Care, Personal Care, and Private Duty Nurse Care is low.
A few other services are worth noting. In part balancing its small share of the nation’s beneficiaries of Medicaid-financed Physician Services, New York accounts for a slightly large share of the nation’s beneficiaries of Medicaid-financed Outpatient Hospital (10.0%) and Clinic (8.4%) services. New York’s Medicaid spending per beneficiary was 17.2% higher than the national average for Outpatient Hospital Services but double the national average for Clinic services. New York State accounted for 9.4% of U.S beneficiaries of Intermediate Care Facilities for the Mentally Retarded, somewhat above its 7.3% of the nation’s poor. New York’s spending per recipient, however, was nearly triple the national average, pushing New York’s spending to 26% of the national total. While I would never begrudge the mentally retarded the care they need, it would be worth comparing the care they receive in New York with the care they receive in adjacent states at half the price, and attempting to explain the difference.