Transforming Healthcare Delivery

Healthcare issues dominated the end of the legislative session in Albany, headlined by the legalization of medical marijuana and new efforts to combat heroin abuse—but potentially the most far-reaching development so far this year was the $8 billion Medicaid waiver granted by the federal government and announced in April by Gov. Andrew Cuomo.

On Tuesday, City & State held a panel discussion in downtown Manhattan that focused the waiver’s potential to overhaul healthcare in the state, and hopefully save a hospital system that sometimes appears to be in free fall.

The panel featured state Medicaid Director Jason Helgerson, Assemblyman Richard Gottfried, state Sen. Kemp Hannon, Healthcare Association of New York State President Dennis Whalen, Marlene Zurack, the chief financial officer of New York City’s Health and Hospitals Corporation, and Jill Furillo, executive director of the New York State Nurses Association.

Fresh off the victory of his medical marijuana bill in Albany, Assemblyman Richard Gottfried kicked-off the conversation by saying that the question wasn’t why marijuana legislation passed now, but why it didn’t pass several years ago. 

“There were numerous points in time in the last several years when it easily could have come to closure and invariably something fell apart,” Gottfried said, “like the Spitzer administration caused things that were about to come to closure to not.”

He added, however, that the bill had several restrictions he hoped would eventually be undone, such as only licensing five companies to produce medical marijuana, and requiring that the dispensing be done by those same companies.

New York, he said, “is about the only place in the American economy that I can think of where we not only tolerate vertical integration … but are mandating it,” Gottfried said.

Most of the panel’s discussion centered on the $8 billion Medicaid waiver and the difference it could make for healthcare statewide.

“The Medicare waiver is not funding projects,” said Pamela Brier, president and CEO of Maimonides Medical Center, in her opening remarks. “It’s underwriting, I hope, a fundamental change in the healthcare system.”

Some $6.9 billion in the Medicaid waiver is devoted to the Delivery System Reform Incentive Payment program, or DSRIP, which will try over the next five years to reduce avoidable hospital use by 25 percent.

Helgerson, the state’s Medicaid director, made no secret of what was at stake. “We must come out of the waiver period with a stable healthcare delivery system,” he said. “We cannot go from crisis to crisis to crisis. The Health Department is running out of vehicles to keep struggling hospitals and other providers open.”

Proof of progress and the state report card distinguish New York’s version of DSRIP from other programs that have come before it, Helgerson said. Money will be given based on how providers transform their care, how many Medicaid members they serve and the quality of the application they submit. Another key difference is that money allocated is attached to performance targets that show a decline in avoidable hospital use.

“There’s real serious accountability,” Helgerson said.

Prospective Payment Systems in the DSRIP program will also be tied to each other statewide, so that if one PPS performs badly, everyone will feel those consequences. In short, the systems will sink or swim together.

Zurack, the chief financial officer for HHC, emphasized her enthusiasm this one-for-all approach, which seemed especially relevant considering that the HHC has been plagued with cash flow problems.

“Even within HHC, our hospitals have a hard time influencing each other … and really functioning as a system,” she said, “even though we have a lot invested in being a system.”