As I showed in the spreadsheet attached to this post, the State of New York spent $35.02 on Medical Vendor Payments for each $1,000 in income of state residents in FY 2007, compared with a national average of $23.02, and $4.97 per $1,000 of personal income on state Public Hospitals compared with a national average of $4.00. Much of that was paid for through the Medicaid program, as was the $7.64 per $1,000 of personal income spent by New York’s local governments on Public Hospitals and Medical Vendor Payments combined, compared with a national average of $6.28. With Medicaid a state government rather than local government function in New York, and in most of the country, this post extends my overview of state government finances with a specific analysis of Medicaid spending by state in 2008.
Most of the data in the attached spreadsheet is from the Medicaid Statistical Information System (MSIS), generously tabulated for me by one of its staff members since its Datamart program no longer works on my home computer, now that I have an I-Mac rather than a PC. The data do not include Hawaii and Utah, because they had not completed their submissions as of the date of this tabulation. The data show that New York State spent $45.30 in total Medicaid payments (to public and private providers) per $1,000 of state residents’ personal income in FY 2008, far above the average of $24.34 for 48 states plus the District of Columbia, or the $22.83 for the adjacent states combined – New Jersey, Pennsylvania, Massachusetts, Connecticut, and Vermont. Only New Mexico spent more on Medicaid as a share of its residents’ income at $46.11, mostly because the income of that state’s residents is so low. In addition to spending more, New York covered a higher share of its spending in state and local taxes. For regular Medicaid (not categories with an enhanced federal match), the federal government covers 57 percent of Medicaid costs on average but just 50 percent in New York (as well as New Jersey, Connecticut, and Massachusetts). The regular federal matching share in New Mexico is 71 percent. A discussion of where New York spends more follows.
First, examine the “Medicaid Payments by Service Type for FY 2008” spreadsheet. The “print table” worksheet prints summary data for New York State, the sum of the Adjacent States, and the Total for 48 States plus the District of Columbia on three pages, while data on all states may be found in the “reorganized” worksheet.
The data show that New York State residents accounted for 7.9% of the total personal income earned by residents of the 48 states plus DC in 2008 according to the Bureau of Economic Analysis, New York accounted for 14.6% of total Medicaid payments in FY 2008. Residents of the adjacent states accounted for 12.4% of total personal income, but those state’s Medicaid spending was just 11.6% of the total.
The data also show that 250 of every 1,000 New York State residents received Medicaid benefits in FY 2008, compared with 160 per 1,000 in the adjacent states and 194 per 1,000 for all states covered. The states with a higher share of their residents receiving Medicaid benefits include Vermont, Arkansas, Louisiana, New Mexico, California, Wisconsin and the District of Columbia. Nevada and New Hampshire bring up the rear with 95 and 99 beneficiaries per 1,000 residents.
New York State’s per capita income was 21.3% above the average for the 48 states and DC, but its Medicaid spending per beneficiary was 75.0% higher than average. The adjacent states, meanwhile, collectively had per capita income that was 16.9% above the 48 plus DC total, and their Medicaid spending per beneficiary was 32.5% above average – somewhat out of line with income, but not to the same extent as New York.
New York’s $8,840 in spending per Medicaid beneficiary was exceeded by just one other area, the District of Columbia at $10,338. The figures for California and Wisconsin were just $2,996 and $3,067, bringing up the rear. Despite having a higher share of their populations receive Medicaid benefits, these states spent just $21.10 and $21.59 per $1,000 of their residents’ personal income on the program, below the national average and less than half the level of spending in New York.
New York State accounted for a very large share of total Medicaid spending in most categories involving institutional and unionized providers and services often used by senior citizens and the disabled. New York accounted for 14.6% of Medicaid spending overall, but 15.6% for In-Patient Hospital spending, 21.9% for Inpatient Mental Health spending on the aged, 20.8% for Inpatient Mental Health spending on children, 28.1% for spending on Intermediate Care Facilities for the mentally retarded, and 16.0% for spending at Clinics. And New York accounted for 15.4% of Medicaid Nursing Home spending, 23.8% for Home Health Care spending, 17.5% for Medicaid financed Transportation spending, 20.5% for Private Duty Nurse spending, and 23.9% for at home Personal Care spending. When I first started compiling this data year ago, New York accounted for half of all the Personal Care spending in the U.S.
At the same time, New York accounts for a low share of fee for service spending for individual health care providers, and certain low cost health care alternatives. It accounts for just 2.3% of national Medicaid spending on Physicians, 3.2% for health practitioners other than physicians and dentists, 0.6% for Therapy, 6.0% for Midwives, 1.6% for Nurse Practitioners, and 5.8% for Hospice, and 3.6% for Sterilization. The state does account for 13.5% of total Medicaid spending on HMOs, which could be used for the above services. HMOs and two smaller variations are generally used to fund health care services for people who are generally healthy, including the working families covered under programs such as New York’s Family Health Plus, with the old and disabled ending up on traditional Medicaid.
The level of spending is a combination of three things, two of which can be measured by this data – how many people benefit from the services, how much is paid for them, and fraud. Looking at total spending for the 48 states and DC, the most costly service types are HMOs at $58.4 billion, Nursing Facilities at $47.3 million, In-Patient Hospital at $36.9 billion, and Drugs at $23.3 billion.
When I first started compiling data from this source, New York’s Medicaid spending per beneficiary for In-Patient Hospital services and Nursing Home services was 90 percent higher than the national average. Local 1199, the hospital worker’s union, and the Greater New York Hospital Association, worked together to shift alliances between Democrats and Republicans in Albany to extract more and more money for themselves. Now, however, no one owes them anything. New York’s Medicaid spending per beneficiary in FY 2008 was only 15.9% above average in FY 2008, and its spending per beneficiary on In-Patient Hospitals was a stunning (given the high cost of living in Downstate New York where much Medicaid spending takes place) 10.7% below the average for 48 states plus DC.
But New York’s total Medicaid spending on these services is still high overall, because they have recruited more customers. With 6.5% of the total population of 48 states plus DC, New York accounted for 17.4% of the beneficiaries of In-Patient Hospital services in FY 2008. Reports have shown that follow up care for operations that take place in New York is often provided in other states, states with lower Medicaid spending and lower taxes. Similarly, New York accounts for 13.3% of total Nursing Home beneficiaries. Anecdotal evidence suggest that seniors who move to other states with lower taxes, when they are relatively young and healthy and have lots of disposable income, often return to New York when the money runs out and they are in need. Florida has 77,850 Medicaid Nursing Home beneficiaries compared with 212,700 in New York, a state with a slightly smaller total population.
There was a provision of the 1996 Welfare Reform act that allowed states to limit benefits provided to recent migrants to whatever they would have been entitled to in their home state. This provision was insisted on by more generous states, such as New York, but was later overturned by the Supreme Court, in a ruling applicable to Medicaid as well. There is a part of the legal industry, and people within the medical industry, that work to establish a New York residence for Medicaid purposes for those who paid taxes elsewhere before their money ran out, and those who had been too well off to qualify for Medicaid. Will Health Care Reform lead to more people receiving Medicaid benefits in their home states rather than coming to New York for operations and custodial care? It remains to be seen.
That New York has so many Medicaid Nursing Home beneficiaries is disappointing given it also spends so much on so many on services allegedly intended to keep people out of nursing homes. With 6.5% of the total population (and 8.0% of the population age 75 or over living in poverty), New York accounted for 19.5% of Medicaid Home Health Care beneficiaries, and its spending per beneficiary was 21.6% above the 48 plus DC average. It accounted for just 9.7% of total Personal Care beneficiaries, but its spending per beneficiary in the category was nearly 2 ½ times the average, at nearly $26,000 per beneficiary. Similarly, New York accounted for 9.8% of Medicaid Transportation beneficiaries, but spent 79.5% more than average per beneficiary, or more than $1,000 each for the year. New York accounted for only 2.9% of Private Duty Nurse beneficiaries. Perhaps because these people are quite sick, the average expenditure per beneficiary in this category was more than seven times the average at $74,900. That is more than double the cost of Medicaid-financed Nursing Home care in New York.
Looking at the Medicaid 2008 By State and Age Group spreadsheet, one finds that New York State accounted for less than 10 percent of total spending for those age groups age 20 or less, but 16.5 to 18.2 percent of total spending for older age groups.
Medicaid spending per beneficiary was a robust 30 to 50 percent above the average for those age 20 or younger, and those age 45 to 64. New York’s spending per beneficiary is in the ballpark of spending in the adjacent states, also relatively affluent and generous, for these age groups. On the other hand, New York’s Medicaid spending per beneficiary for those age 21 to 44 was 64.1 percent above average, compared with 12.5 percent above average in the adjacent states. Spending on adults age 21 to 64 accounted for more than half of New York’s Medicaid spending, a higher share than in the 48 states plus DC.
Nationally, Medicaid spending per beneficiary rises from $3,400 or less for those age 20 or younger to $5,330 for those age 21 to 44 and about $12,000 for those age 45 to 64, as older people develop more health problems (and, in the case of those 21 to 44, incur childbirth expenses). Spending per beneficiary then falls to $9,378 per beneficiary for those age 65 to 74, as for those with 10 or more years worked (40 quarters) Medicare picks up some of the tab, before rising further. No such drop is observed for New York State, where a higher share of Medicaid beneficiaries got by on welfare or SSI during middle age in the past, and work off the books in the present. Will welfare reform eventually allow 10 years of work experience and Medicare eligibility for more New Yorkers, reducing Medicaid expenses for seniors? Not if they are hired off the books.
In any event, New York’s Medicaid spending per beneficiary on those 65 to 74, 75 to 84, and 85 and over is 81.9, 96.1, and 92.5 percent above average, compared with 32 to 38 percent above average in the adjacent states. And as noted in my prior post, a Rockefeller Institute report shows that New York is by far the most generous state for long term care in the country, in the extent of services provided, the cost of those services, and the ease of those who were not poor qualifying for Medicaid.
As for the number of beneficiaries in older age groups, New York accounted for 9.3% of those age 75 to 84, and 9.4% of those age 85 and over, compared with 6.9% of all people age 75 and over and 8.0% of poor people age 75 and over, according to Census Bureau data. The age group for which New York really has a large share of U.S. Medicaid beneficiaries is 45 to 64, an age range roughly corresponding with the Baby Boom generation, with 13.7% of total Medicaid beneficiaries. I’ve attached a third spreadsheet with Census Bureau data on the total and poor population in different states by age group, for those who might wish to analyze it further.
Finally, what about New York’s physicians? New York State, with 6.5 percent of the population of the 48 states plus DC, accounted for 5.1 percent of the beneficiaries of Medicaid Physician services in FY 2008. But the payment per beneficiary, at $216 each over the year, was less than half the 48 state plus average and 21.1 percent lower than the average for the adjacent states. Perhaps this is because New York’s Medicaid recipients just go to physicians for check ups, and go to hospitals and clinics when they need extensive care. But I’ve also read that New York’s level of Medicaid payments for physician services is low.
Given the experience of physicians in New York, I can’t blame them for opposing a single payer health care system. Under such a system, the question of how much physicians should be paid relative to other types of health care becomes a political decision – take it of find another career. In New York, the political decision has been that the Greater New York Hospital Association and Local 1199 win, and the Physicians lose, for reasons that have nothing to do with health care.
The New York State Statistical Yearbook has tables on Medicaid spending by county in New York State, and I plan to analyze that data as part of the analysis of local government finances for different parts of the state. I haven’t done this analysis for several years, but I can tell you what the circumstances had been in the past. The two most expensive state and local services are Medicaid and public schools. Medicaid spending was through the roof in New York City, and public school spending was through the roof in the rest of the state. Which seems like a deal, and not one concerning health care and education. More like “jobs” for your people and “jobs” for ours, with the jobs in the rest of the state paying more and having pensions and retiree health care. We’ll see if the pattern still hold true. But candidate for Governor Rick Lazio, from outside New York City, saying that Medicaid needs to be cut but public schools should not be implies that it does.