New York Gov. Spitzer Proposes Budget That Includes $1B In Health Care Cuts

Main Category: Public Health
Also Included In: Pharma Industry / Biotech Industry
Article Date: 25 Jan 2008 - 11:00 PDT

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New York Gov. Eliot Spitzer (D) on Tuesday proposed a $124.3 billion budget plan for the upcoming fiscal year that includes a $1 billion reduction in health care spending, the New York Times reports. Spitzer proposed $980 million in cuts to Medicaid and other health programs, in part by changing the way the state reimburses hospitals and other providers to emphasize preventive care and by changing the way the state purchases medications in bulk.

The budget proposal also would reclassify HMOs as insurers for tax purposes, which would generate more than $200 million annually. In addition, Spitzer proposed increasing other fees charged to health insurance companies by $50 million. According to the Times, Spitzer "did not rule out" making further cuts later this year, if necessary.

The Greater New York Hospital Association and 1199 United Healthcare Workers East -- part of the Service Employees International Union -- in a statement said they were "troubled by the enormous ambiguity surrounding the financial impact on New York hospitals" (Hakim, New York Times, 1/23).

Editorial
Spitzer's plan increases spending by only 5%, closes the state's $4.4 billion budget deficit and "at the same time remains true to core priorities," one of which is "smart changes in health care delivery and reimbursement," according to a Long Island Newsday editorial. The editorial adds, "That is admirable," as is "his readiness to invest in providing more health insurance to more kids." The editorial concludes, "Tough economic times will make this year's budget negotiations wrenching, yet they might well create the climate for a much fresher new look at how our tax dollars are spent" (Long Island Newsday, 1/23).

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