By Mark David Blum, Esq.

(*An ongoing series of discussions on the business and state of medicine)

Facing a $15 Billion budget shortfall, New York’s substitute governor has proposed in his Executive Budget some of the most outrageous and far reaching taxes and fees imaginable. The entire nation is mocking his proposed 15% tax on regular soda (the ‘Obesity Tax’) and snarking at his fees for ipod downloads, manicures, a tax on hospital, surgical, radiological and adult home health care services.

While the world laughs, a silent but deadly killer stalks the proposed Executive budget. Specifically being ignored is where the budget ax falls. In trade for providing free or nearly free health care to State employees via the Family Health Plus program so as to assure one constituency who will vote for the governor in the next election, the governor is taking the knife to the budgets for those services that people need most.

First and foremost on the minds of Americans today is the issue of health care. Many aspects of health care are at issue but one idea floats through all of them. Americans want access to health care and Americans agree that everybody should have access to health care. This is not subject to debate.

Yet Governor Paterson is proposing gutting some of the most basic and fundamental services relied upon by some of the most vulnerable in society. Notably among them are health care spending cuts and taxes of $3.5 billion, including $799 million in hospital cuts and taxes, $424 million in nursing home cuts, and $190 million in home care cuts and taxes. Some preliminary estimates are that the budget knife will cut $1.4 billion in to hospitals, $845 million to nursing homes, and $360 million to home care providers.

A fuller read of the proposed budget gives the aura that a large paper chase is in effect. All the governor has done is move money from one program to another, shift burdens from one government shoulder to another, and at the same time, making no real reforms to the system. What the Governor does not see is how the system itself is broken and throwing aspirin and taping bandages is not healing the problem.

As a People, we need our hospitals. We need our nursing homes. Medicare at age 65 is a guaranteed right; meaning once you hit the magical age, you are entitled to health care. Medicaid and the Family Health Plus program recognize the large class of uninsured poor and working poor who have no access to medical coverage. On its’ face, the Governor’s proposal seems to disregard the rights of the elderly for the benefit of the poor. The only way you win is to be over 65 and poor.

Deeper investigation into the proposal reveals a far more ugly side to the distribution model. Health care services are being reduced. The State acts as a single payor for a large percentage of the population and self determines what rates it is going to pay and for what services. Going unsaid at the same time is that there are procedures and treatments for which there will be no relief for the patient. Private insurance companies do not have the luxury of suckling from the taxpayer tit and must compete with each other to provide more services for less cost. At the same time, the insurance companies are acting like the State by dictating what they will pay and what services they will provide. In the end, the patient gets the least amount possible under the circumstances.

This is the flawed logic of using an insurance model. We punish ourselves by attacking those who use services and drive up costs, we demand that prices be reduced, yet we cry when the cut in services or loss benefits hit us. By that time, it is usually too late.

Clearly I am no expert on matters of Public Health, but I can read and ask questions. One answer I once received is that Medicaid, Medicare, and most private insurance payments that go to hospitals and health care providers are not at all tied to the actual costs of the treatment. The rates for the public programs are set by the legislature; with one eye cast warily at the ballotbox. What the rates do not do is reflect the actual cost to the hospital or clinic for the service provided. With private insurance carriers, the rates are likewise negotiated or dictated between the provider and the carrier, but again the rates are set on a bulk purchase presumption and are not tied to actual operating costs and costs of procedures and treatment. The result is an escalating explosion in overhead and operating costs of hospitals and clinics and nursing homes with the insurance payments hoped to at least cover most of the overhead. Little room is left for “profit” leaving hospitals without much chance to grow and expand their services and products. We all lose under that system.

The business of medicine does have totally clean hands. From redundant and hyper sensitive systems to top heavy management, hospitals have a lot of internal reorganization and systems analysis to conduct. Cuts can be made that do not impact patient care or availability of products and services.

But the present Executive budget reflects the worst of fiscal management. It is patently wrong to target services and care. How we treat our weakest and elderly speaks volumes for who we are as a nation. Leaving them without to suffer alone is the wrong solution.

There are a dozen alternatives to this shell game being played in Albany. Hopefully I am not alone. No other sector of society is in more need of a complete re-think and re-organization than the medical industry. But moving money around to appear to save money on paper does not reflect reality and leaves only the poor and elderly to suffer. Surely we can do better.