Medicaid's Mental Health Problem

How can New York save money on Medicaid coverage of mental health while safeguarding care for those who need it?

If Governor Cuomo wants New York’s mental health Medicaid programs to be more efficient and effective, hiring a penny-pinching manager from Wisconsin isn’t the cure he’s looking for.

A better approach: if New York’s costs are too high -- and they are -- then look beyond changes in management to do what only elected officials can do: change policy. New York should reconsider its entire service model, since many cost challenges have a great deal to do with New York being New York, and very little to do with Wisconsin being Wisconsin.

Many New York health programs are still old school, with a heavy focus on provider-based financing and expensive institutional care. The state’s mental health needs are also concentrated in one of the most costly real estate and salary markets in the world, so New York’s service model spends a disproportionate share of funding on bricks, mortar and institutional management. A thoughtful plan to move more care out into the community can save millions -- and actually improve care for many patients.

As candidate Cuomo, the governor agreed that financial decisions in Medicaid were often micromanaged by politicians. But micromanagement by one bureaucrat new to New York’s system could be just as cumbersome as micromanagement from the Legislature.

I’m a psychiatrist, so I know “patient choice” isn’t a sensible approach for many mental health patients. But it can work for some. Patient-centered funding models can improve care and cut costs for many others.

For example, in 2010, New York’s Corporation on Supportive Housing argued that mental health patients who are persistently homeless cost the system a great deal as patients seek access to services in a sort of “institutional circuit.” The corporation’s argument: developing programs to target community-based services at individual patients (as opposed to funding the institutions they arrive at) can be more cost-effective. They’re right.

The only thing stopping New York from taking this approach more often is Albany’s persistent habit of micromanaging programs based on political -- or departmental -- priorities, instead of building care supports efficiently around patients, services and outcomes.

This piece originally appeared in The New York Times

This piece originally appeared in The New York Times