The Other Battle for Health Care Reform in New York State

Amy Traub

The Other Battle for Health Care Reform in New York State

Reforming New York's health care system is probably the most contentious dispute in Albany today. The debate between Governor Spitzer on the one side and 1199 SEIU and the Greater New York Hospital Association (GNYHA) on the other has become so fierce that it's easy to overlook some otherwise controversial proposals that the two sides actually agree on. Chief among these are ending abuses by the enormously profitable insurance and pharmaceutical industries. Reforming the state's health insurance and prescription drug policies would have a huge impact on New York's health care costs and quality, yet both the drug and insurance industries are tremendous forces in Albany in their own right, making this another battleground -- one that threatens to get lost in the sound and fury surrounding cuts to hospitals.

New Yorkers spent nearly $16 billion on prescription drugs in 2004, 65 percent more than in 2000, and the costs continue to mount. High drug prices burden employers paying for insurance, insured patients struggling with high co-pays and deductibles, taxpayers footing the bill for Medicaid's burgeoning drug costs, and the uninsured, who pay the highest costs out-of-pocket. Meanwhile the pharmaceutical companies rake in windfall profits. It's a part of the health care system both Governor Spitzer and 1199/GNYHA agree demands reform.

There's even consensus about some of the reform steps that are needed such as strengthening the state's Medicaid preferred drug list (a list of the most effective and cheapest medications which doctors are encouraged to prescribe), and using it to negotiate more aggressively with drug companies. The governor has estimated that this reform could save taxpayers $200 million a year.

But the savings could be extended even beyond Medicaid and the state's drug program for the elderly directly to the 2.6 million uninsured New Yorkers trying to scrape together enough money to fill medically necessary prescriptions. The state of Maine provides a remarkable model (pdf) for using the leverage of a preferred drug list to persuade companies to lower pharmaceutical costs, giving Mainers average discounts of half off the retail price of generic drugs and 25 percent off brand-name drugs, sometimes beating Canadian prices. (Watch this space for a forthcoming podcast and transcript of the Drum Major Institute's discussion with Maine and New York legislators about how to import these measures to New York) We won't get that kind of reform in New York without a fight however. For a fascinating look at how the drug industry's political influence plays out in Albany, and how they've successfully slowed and weakened reform efforts so far, see this New York Times article (no password necessary).

The insurance industry is another powerful Albany player whose business practices increase their profits and everyone else's health care costs (pdf). Both 1199/GNYHA and Governor Spitzer agree that HMOs need to be more closely regulated so that they can't delay or deny payment for the medical care they're supposed to be covering. Governor Spitzer has also argued for reinstating prior approval of HMO's insurance rates a regulatory measure that successfully kept insurance premiums for New York's small businesses under control in the past. But, like the pharmaceutical industry, insurance companies and HMOs wield tremendous power in Albany, and passing these reforms won't be easy.

If we allow the fight over state budget cuts to hospitals and nursing homes to eclipse the effort to rein in pharmaceutical and HMO costs, these powerful industries will continue to evade meaningful regulation and profiteer off New York's health care system. That would be a damn shame.

Comments

I don't know if it's true, but at a meeting Thursday night on another subject, State Senate Minority Leader Malcom Smith (a strong supporter of Gov. Spitzer's in the health care dispute with 1199 and the GNYHA)-- suggested that a deal was in the works. I personally think that Gov. Spitzer's proposals are badly thought out. If the Gov. and his key supporters are unable to compromise, the possibility for progressive change in health care will be vastly diminished.

I have suffered the frustration of trying to obtain health insurance. Unless one is poor or extremely wealthy, it is enough to bankrupt the average American family, or worse yet, be subject to go without. Many families, including my own are just slightly over the healthy NY income guidelines for insurance, so we are put in a position to jump another 700 to 800 dollars more a month! This is simply not an option! More and more employers are no longer offering health insurance due to the high costs, which results in huge numbers of uninsured New Yorkers. What is being done NOW to battle this urgent problem????

Lisa,
I myself have gone to great lengths, including spending the majority of my income at times on health insurance in order to get myself health coverage. This system is a nightmare. A waste of resources and a waste of human life.

At the national level - well you've seen what Bush tried to propose in the state of the union. It was bad. Really bad.
You can read our response to Bush's plans here:
http://www.drummajorinstitute.org/library/article.php?ID=6552

Some folks in congress have some good plans like expanding medicare to cover more and more people (and eventually everyone). A few candidates for President have plans as well. Here in NYS there is talk of expanding coverage to all children. As for us adults, I'm not sure. But we do deserve healthcare too.

I agree with Lisa Mickys. I am a stay at home mom now, but when I worked and we had the option of two employer plans..things were different. We were young and did not take advantage. Today I would read every line and optain every procedure that was covered and needed...even to the smallest degree to get my money's worth. My husband lost permanent employment when my son reached one. We have since covered him, but not ourselves. Originally we had Child Health Plus after Cobra. It was extrememly helpful and it is a great plan for those on unemployment. He did obtain employment...but it is contract work and he is not self-employed. Soooo many employers can not flip the bill for insurance these days. I am a non-active CPA and was once a Controller for several newspapers. We had to drop our extensive family coverage here in Ontario county for the whole company...and that was 7 years ago. I can't imagine what it is like now. ...having said all that...what is really "the end all be all" for me is that my husband contracts for the number one insurance provider here. They have tons of contractors to avoid..benes. It is sad. They are non-profit, but reported record high profits last year...go figure. Everyone is always quoting that malpractice and medicaid fraud are the problems. I have been an auditor of medical groups and IPOs to help them get the money they deserved from the insurance companies...TWO YEARS AFTER THE SERVICE. Now..I hear of the waste and slow moving business practices from within. It's disgusting that the companies can waste billions on projects that would take a competitive company several months to push through...or have executives be accountable or fired. Where is our dollar going I wonder?? I paid into the "system" for years never claiming a thing...now I am quoted 13k a year because I am not poor and if I was rich I would not care. I was actually told by a representative of an insurance company that "I have a choice...other people do not..." I promptly said...tell me who. If you are poor ...you are covered..if you are rich...you are covered...if you are employed...you are most likely covered...if you own a business..you are covered (but pay for it heavily if not part of a group)..if you are not any of those....you are OUT. Tell me..I said to her..what choice do I have. She said I could sell my house. The insurance is more than my mortgage...Then I realized I was talking to one of the "covered freely people". I say ..get with it and expect some performance out of these companies. They have more fat than any company I have heard of. Non-profit reporting has always made it hard to compare...but it is there and it is wasting tons of the insurance premium payers money...tons of it.

I am not completely up to date.. but why do insurance companies weild sooo much power over things in Albany?? Are they not a company, just like others??? Does General Electric or other large comapnies have that much power?? They are provding a service, just like all other companies.. Call me nieve, but that is the truth. The days of alcoholic beverages, guns and firearms.. including insurance by the "underworld" is gone..I think. It is ironic that we have laws governing those very things all under one "cover", but as far as I can see..they have power because we are giving it. Let someone compete!!! I have two to three choices and a choice of "catastophy insurance" is not even available.

i grew up in the 50s and 50s. My parents never had health insurance for we children or themselves. It was not needed and nobody we knew had it either. If one really could not pay, one went to the county or charity hospital. I worked for an insurance company in the early 70s. That's when this whole hideous thing started. Providers started to have one set of charges for insured, and one for uninsured people. Part of my job was to stop that. Of course, they always went with the higher "cost". In the relatively short time span between then and now, the greedy collusion between providers and insurance companies has made healthcare in our country pretty inacessible to millions of people. I'm for MASSIVE reform. The insurance companies are at the root of the problem. We need to take our power back from them, not get rid of more beds and healthcare personnel. I agree with the earlier post that the guidleines for Healthy New York are unrealistic. But she did not mention that even if one qualifies, one may not be able to afford the monthly premium and copays. How is that affordable healthcare? Medicaid wants copays now too. ALL of the guidelines are unrealistic!