Health Care: 2017 Census of Governments Data

Many New Yorkers were stunned when Mayor Bill DeBlasio announced that the New York City Health and Hospitals Corporation, which runs public hospitals in the city, rather than the legendary New York City Health Department, would take the lead on testing and contact tracing as the city attempts to emerge from the COVID-19 pandemic.

“It makes absolutely no sense to move a function that has been done well by a great health department for decades to an organization that does not have the legal, epidemiologic, administrative or technical experience to manage it,” said Dr. Tom Frieden, a former city health commissioner and former director of the Centers for Disease Control and Prevention.

Perhaps Mayor DeBlasio knows something that the Times and Dr. Frieden do not.  That when measured per $1,000 of the personal income of all city residents, the Department of Health doesn’t have as much funding as it did back when former Mayor Bloomberg was nagging us about our health. That is one of the findings of an analysis of state and local government Health, Hospitals and Medicaid Vendor Payment expenditures, and the jointly funded federal and state (and in NY local) government Medicaid program that is used to pay for most of them.

 

This the third function-by-function post in a comprehensive analysis of state and local government finances using data from the 2017 Census of Governments, similar data for prior years, and other data sources as needed and available.  The first post, which explained where the data comes from and how it was tabulated, is once again here.

https://larrylittlefield.wordpress.com/2020/04/19/background-and-databases-2017-census-of-governments-finance-data/

And an overview of state and local government expenditures is here.

https://larrylittlefield.wordpress.com/2020/05/03/overview-of-state-and-local-government-expenditures-2017-census-of-governments-data/

And spreadsheets with most of the charts that will be used in this post are here.

Health Care AllState

Health ALL-YEAR 2017

Medical Vendor Hospital ALL-YEAR

In most states, there are state Health departments and local (usually county) Health departments.  State public Hospitals have traditionally served the mentally ill, while local government public Hospitals are present in some areas but not others. As in the case of Higher Education, private hospitals run by non-profit organizations were well established in the Northeast before public hospitals became common, so public hospitals are more common in the South and West.  But the largest destination for state and local government health care expenditures is Medical Vendor Payments, code E74.

In FY 2017, all U.S. state and local governments spent $5.92 per $1,000 of everyone’s personal income on public Health, $11.51 on public Hospitals, and $32.28 on Medical Vendor Payments.  The total for these three together is $49.71 per $1,000 of personal income, or about 5.0% of everyone’s income.  That compares with about 3.9% of income spent on Elementary and Secondary Education that year, and 2.0% spent on Higher Education, including both public colleges and universities and tuition assistance and subsidies.

These services, along with the federal Medicare and Social Security programs, are the largest destinations for spending at all levels of U.S. government, with education mostly for the young, health care and Social Security mostly for the old, and both supposed to be paid for by taxes on the working adults in between, but for the past few decades substantially paid for by debt instead.

The inclusion of public Health with public Hospitals with Medical Vendor Payments is a departure from my prior four compilations of Census of Governments data.  According to the manual, public Health (code E, F and G32) includes not only expenditures for general health activities, categorical health activities and programs…community health care programs…and ambulance and emergency medical services ONLY IF handled separately from the local fire department. 

But also health- related inspections…regulation of air and water quality, rabies and animal control…and state or local expenditure financed by Federal Government “Superfund” for cleanup of hazardous waste sites.  So in prior compilations, I included Health in the discussion of Bureaucracy, the last post in the series.  Given that there is now a pandemic going on, however, I’ll bring the discussion of public Health forward.

For all health care services combined, New York’s state and local governments spent 28.1% more than the U.S. average per $1,000 of state residents’ personal income, and California’s spent 20.1% more.  Health care, of course, is also paid for by the federal government via Medicare and the VA hospital system, and by individuals who have private health insurance (which is also subsidized by an income tax break).

New York and California have traditionally had two characteristics that generally don’t go together, and combined to both drive up state and local government health care spending, especially via the Medicaid program, but also increase the share of that spending paid for by state and local taxpayers rather than the federal government.  These states have large high-income populations, which push up their per capita income, and therefore reduce the share of Medicaid expenditures covered by the federal government, which is based exclusively on per capita income. But they also had large low-income and uninsured populations, which tend to push up Medicaid expenditures.  In most other states, high poverty and uninsurance rates go with low average incomes (as in Mississippi and Alabama), and low poverty and uninsurance rates go with high average incomes (as in New Jersey and Connecticut).

According the 2017 American Community Survey, however, the gap between New York and California and the U.S. average on poverty and health insurance is smaller than in the past.  The U.S. poverty rate (people) was 13.4%, compared with 14.1% in New York and 13.3% in California.  Nationwide, 67.6% of the population was covered by private health insurance, compared with 63.6% in California and 66.9% in New York.

A spreadsheet of poverty and health insurance from the 2017 American Community Survey, for all 50 states and the U.S. as a whole, is here.

ACS2017-Health Insurance Poverty

And a table is here.

A table of health care expenditures by function for all 50 states, based on the Census of Governments, is here.

While the highest among large states, New York only ranked 12thin total state and local government health care expenditures per $1,000 of state residents’ population, and California ranked 13th. The highest spending state was Mississippi at $94.58, or nearly 9.5% of state residents’ personal income, followed by New Mexico at $87.63, Kentucky at $74.84, South Carolina at $71.09, Arkansas at $69.07, Alabama at $68.05, West Virginia at $67.92, DC at $67.04, Louisiana at $66.51, and Alaska at $64.44.

With the exception of DC, a city separate from states, these states combine low average incomes, reducing the denominator in the per $1,000 of personal income equation, and high poverty and low levels of private health insurance, increasing the numerator.  With the exception of DC and West Virginia, these states also have extensive public hospital expenditures, with at least $10 spent per $1,000 of state residents’ personal income, while most Northeastern states do not.  They are also Republican voting states, but that doesn’t mean they are against government spending.  They are against government spending on other people, including those in New York and California.

The states on the other end, with the lowest health care spending per $1,000 of state residents’ personal income, are a mixed lot.  They include some affluent states where high average incomes and low poverty rates may reduce spending per $1,000 of personal income despite quite a bit of spending per beneficiary, including New Hampshire ($25.06 and about half the national average), New Jersey ($31.76) Connecticut ($33.56), Illinois ($33.57), Colorado ($33.98), Maryland ($35.31), and Virginia ($36.75).

But the bottom ten also includes South Dakota ($25.21), North Dakota ($27.61), and Nebraska ($32.75).  These states have very low poverty rates and very high rates of private insurance coverage, despite modest average incomes.  In FY 2014, according to the Kaiser Family Foundation, North Dakota and Nebraska were well above average in Medicaid spending per enrollee, with South Dakota just below average.   But they presumably had relatively few people on Medicaid, and many more with private insurance and on federal Medicare, compared with the U.S. average.  The Kaiser Family Foundation table is here.

 

We’ll start a discussion of individual functions with public Health, the function smallest in expenditures but the one most in the news as this is being written.

Public Health spending is low in most of the Northeast.  The U.S. average of $5.92 in state and local government public Health expenditures per $1,000 of personal income compares with just $5.42 in New York State, $3.09 in New Jersey, $4.11 in Connecticut, $3.36 in Massachusetts, $1.47 in New Hampshire, $3.06 in Maine, and $3.74 in Rhode Island.  Pennsylvania, at $8.17, is well above average.  So is Vermont at $11.56, but that state has a universal coverage state health care system.  In theory Massachusetts also has universal coverage.

North Carolina stands out for high spending in the Southeast, as do Michigan and Ohio in the Midwest.  Despite relatively high average incomes, which would in theory depress public Health expenditures per $1,000 of personal income, such spending was 64.2% above average in California, 40.1% above average in Oregon, and 18.9% above average in Washington.

The division in responsibility between state health departments and local health departments varies from state to state.  In some relatively small states such as New Jersey, Connecticut, Massachusetts, New Hampshire, Maine and Rhode Island, most of the spending is at the state government level, whereas in California it is mostly at the local government level. In New York State, the state health department spent $2.48 per $1,000 of state residents’ personal income, while local governments spent an average of $2.94 per $1,000 of personal income.

At the local government level, the $1.99 per $1,000 of personal income spent by the NYC health department compared with an average of $2.97 for the Downstate Suburbs, $3.63 in the Upstate Urban Counties, $5.63 in Rural New York, and the U.S. average of $3.35.  Among New York’s counties, only affluent Westchester, with its high level of personal income, was lower than NYC in spending per $1,000 of personal income.  While NYC’s Department of Health and Mental Hygiene’s total funding was high in at $1.23 billion in FY 2017, so was the city’s population, and the per $1,000 of personal income measure is intended to adjust for the higher cost of living that generally goes along with high per capita income.   You don’t always get what you pay for in state and local government services in New York.  In the long run, however, you never get what you don’t pay for.

Health Care BY County

Among the counties that include or consist of the nation’s other large cities, New York City’s public Health spending per $1,000 of personal income, at $1.99, was higher than many, but lower than some.  Los Angeles County, San Francisco and Philadelphia stand out for very high spending in the category, at $7.66, $18.89 and $20.27 respectively.  Multnomah County (Portland, Oregon) was well above average at $6.35, with King County (Seattle) about average at $3.44.  Travis County (Austin) was high for Texas at $8.86, compared with just $1.46 for Dallas County and $1.99 for Harris County (Houston).

Despite high average incomes, which would tend to depress spending per $1,000 of personal income, spending public Health was close to the U.S. average of $3.35 per $1,000 of county residents’ personal income in Fairfax County, VA ($3.53) and Orange County, CA ($2.87), and above average in San Diego County ($3.84) and Santa Clara County (Silicon Valley) ($6.34).  Low local government spending levels in the affluent suburbs of Massachusetts, Connecticut, New Jersey and Maryland are explained by relatively high spending at the state level.  That, however, does not explain the low spending in Wake County (Raleigh) NC, at ($1.49) and Montgomery County, PA ($1.29).  All in all, New York’s Downstate Suburbs spent more on public Health than most affluent suburban counties.

Many “Rustbelt” urban counties had higher public Health Expenditures per $1,000 of personal income than the average of $3.63 for the Upstate Urban Counties.  The level of expenditure in Wayne County (Detroit) was low at $1.65 per $1,000 of personal income, however. That compares with $3.92 in local government Health expenditures per $1,000 of county residents’ personal income in adjacent suburban Oakland County, Michigan.

Local government public Health expenditures have been on an uptrend in the U.S., on average, from $2.78 per $1,000 of personal income in FY 1997 to $3.07 in FY 2007 to $3.35 in FY 2017.  In California, such expenditures soared from $4.83 to $6.26 to $9.14.  New York City, on the other hand, was slightly above the U.S. average in FY 1997 at $2.83 and in FY 2007 at $3.19, before plunging to the $1.99 in FY 2017.  Local public Health spending per $1,000 of personal income also fell in other parts of NY state from FY 2007 to FY 2017, but remained above the level of FY 1997.

State-level public Health expenditures decreased in the U.S. from FY 2007 to FY 2017.  Such expenditures plunged in California, but this does not offset the rise in local government expenditures in that state.  Neither does the increase in state level spending in New York State offset the decrease in local spending in NYC.  In fact, one wonders how many New York State Health Department workers work in NYC, compared with the rest of the state.  For many public services, including highways and police, New York State workers provide public services outside the city, not much in it.

Combining state and local government public Health spending, one can see the increase for the U.S. as a whole during the 1980s, during the AIDS epidemic.  Nationally, the increase was from $3.33 spent per $1,000 of personal income in FY 1977 to a peak of $6.05 in FY 1995.  There was another jump from $5.94 in FY 2001 to $6.51 in FY 2003, during SARS, and another jump from $6.19 in FY 2007 to F6.41 in FY 2008.  In addition to increasing at those points, California’s public Health expenditures jumped from $6.96 in FY 2011 to $9.72 in FY 2017, while Oregon’s increased from $7.19 to $8.29.  Spending in Washington was down from a peak of $8.29 in FY 2014, but still high at $7.04.

(Note that large one-year jumps in expenditures could be capital expenditures – the construction of a new lab, for example).

While we don’t know yet what happened to spending levels after FY 2017, it does appear that the West Coast had resources in place for a pandemic. While the Northeast did not.

Meanwhile, Massachusetts slashed its state and local government public Health expenditures per $1,000 of personal income in the early 2000s, when money got tight after the dot.com and tech bust.  New York did so in a decade later, after the financial crisis, both in New York City and in the rest of the state.  Ignoring the jump per $1,000 of personal income in 2009, an artifact of a plunge in income, and assuming that state-level public Health expenditures are located in NYC and the rest of the state in proportion to personal income (questionable), the New York City decrease was from $5.96 per $1,000 of personal income in FY 2011 to $4.47 in FY 2017, and the decrease for the rest of NY state was from $7.36 to $6.30. The rest of NY state remained above the U.S. average, with NYC far below.

New Jersey and Connecticut maintained their relatively low level of public health spending.  Public Health spending, however, increased substantially in Pennsylvania during the early 2000s, and has remained high.

The data implies that the demands of short-term priorities, and powerful interests, diverted money from public Health in NYC, just as it diverted money from maintenance and ongoing normal replacement capital projects on the NYC subway.  This is just another way that the future, and those who will live in it, have been a low priority in New York. We may be paying for that now.

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State public Hospitals are something else that has been a low funding priority for the past 40 years, as many have closed.  The reason given has been the deinstitutionalization of the mentally ill rather than budget cuts, but budgets have been cut even so. In 1984 the New York Timeswrote:

The policy that led to the release of most of the nation’s mentally ill patients from the hospital to the community is now widely regarded as a major failure. Sweeping critiques of the policy, notably the recent report of the American Psychiatric Association, have spread the blame everywhere, faulting politicians, civil libertarian lawyers and psychiatrists.

Many of the psychiatrists involved as practitioners and policy makers in the 1950’s and 1960’s said in the interviews that heavy responsibility lay on a sometimes neglected aspect of the problem: the overreliance on drugs to do the work of society.

But state hospital closings continued, and many of New York’s state mental hospitals closed or downsized during the Pataki Administration during the 1990s, with more being closed right to this day.

https://www.manhattan-institute.org/deinstitutionalization-mental-illness-new-york-state-city

The number of “emotionally disturbed person” calls responded to by the New York City Police Department has risen every year since 2014. The number of seriously mentally ill inmates in New York City jails is now higher than in 2014.

These are presumably the people NYC Mayor DeBlasio has released from the jails at Rikers Island onto the streets in response to the COVID-19 pandemic.

Both state- and citywide, more psychiatric-care beds are located in general hospitals than in the traditional network of state psychiatric centers. But due to the financial pressures that many general hospitals face, they are unlikely to expand their systems of inpatient psychiatric care, and some have already reduced capacity.

Thus, as New York State has cut its inpatient psychiatric bed count, pressures have increased at the local level while the promise of better treatment at a lower cost has yet to be fulfilled.

When New York State was among the leaders in mental health spending, it was often on the receiving end of “Greyhound Therapy” relocations of troubled people from other states.  As of FY 2017, however, NYC’s spending on state Hospitals, at $4.13 per $1,000 of state residents’ personal income, was below the U.S. average of $5.15.

Massachusetts ($1.53), Vermont ($0.73), New Hampshire ($0.78), Maine ($1.00), Rhode Island ($1.20), Maryland ($1.53), Georgia ($2.51), Florida ($1.21), Illinois ($2.40), Indiana ($0.47), Minnesota ($1.06) and Oklahoma ($1.53) stand out for rock bottom spending on state Hospitals per $1,000 of personal income of state residents.  Texas, at $5.25, and California, at $5.67, are slightly above average, with Oregon at $11.63 and Washington at $10.12, well above the U.S. average.

During the FY 2007 to FY 2017 period, however, there was a partial reversal of the pre-FY 1997 decrease in state Hospital expenditures nationwide. U.S. state Hospital spending increased from $4.00 per $1,000 of personal income in FY 2007 to $5.15 in FY 2017. There were increases of $4.26 to $6.59 in Pennsylvania, $5.91 to $9.50 in Michigan, $1.77 to $2.40 in Illinois, $3.95 to $5.67 in California, and $1.96 to $3.30 in Colorado.

On the other hand, there were decreases from $5.06 to $4.13 in New York State, $4.16 to $3.85 in New Jersey, and $6.29 to $5.57 in Connecticut. In Massachusetts, the decrease from FY $4.57 in FY 1997 to $1.59 in FY 2007 was followed by a small decrease to $1.53 in FY 2017.  All this in the face of a massive wave of opioid addition that has had addicts on the move around the country, with many arriving in NYC and California.

 

Averages are less telling for local government public Hospitals, which tend to be general hospitals, because some places have them, and some do not. Compared with the U.S. average of $6.36 spent per $1,000 of personal income on local government Hospitals, the states with the most spending in FY 2017 were Wyoming ($32.21), South Carolina ($23.25), Mississippi ($22.41), Alabama ($20.74), North Carolina ($17.34), Indiana ($14.40), Iowa ($13.49), Tennessee ($11.42), Louisiana ($10.79) and Alaska ($10.16).

On the other hand local government Hospital expenditures were very low in New Jersey ($0.48), Maryland ($0.15), Pennsylvania ($0.02), and New Hampshire, Vermont, Connecticut, Delaware, Hawaii and Rhode Island (zero or close to it).

New York State is an outlier in the Northeast, with substantial local government Hospital expenditures per $1,000 of personal income in some places, including New York City ($14.39), Nassau County ($4.23), Westchester County ($14.12), Erie County ($12.66), and some rural counties Upstate.  Two New York State hospitals, Upstate Medical Center in Onondaga County (Syracuse) and Downstate Medical Center in Brooklyn are also general hospitals.

The expenditures of the Charlotte-Mecklenburg Hospital Authority are very high per $1,000 of the personal income of residents of Mecklenburg County alone, but that organization has facilities and customers throughout metropolitan Charlotte NC and beyond, into rural North and South Carolina and even Georgia.  Other counties where local government Hospital expenditures per $1,000 of personal income are near or even above the $14.39 in New York City were San Francisco ($11.02), Denver ($19.46), Miami-Dade ($14.13), Dallas ($17.50), Santa Clara-Silicon Valley ($13.58), Hennepin (Minneapolis) $11.43 and Cuyahoga (Cleveland $17.06).

Local government public Hospital expenditures have been increasing modestly nationwide.  From FY 2007 to FY 2017, there was an increase per $1,000 of area residents’ personal income of $13.59 to $14.39 for New York City, $4.61 to $5.71 for the Downstate Suburbs, and $1.84 to $3.43 for the Upstate Urban Counties.   Such expenditures increased from $7.17 to $9.85 in Harris County (Houston).

In New York City, people think of city hospitals as the health care providers of the poor and uninsured, with most of their revenues coming from Medicaid and other subsidies.  Those with private health insurance, including government employees and retirees, tend to use the city’s many prominent private, non-profit hospitals, and shun what is generally thought to be the inferior care provided by city workers in city hospitals.  Charges for services equaled just 34.0% of total expenditures by New York City’s Health and Hospital Corporation in FY 2017.

In fact, the HHC is primarily funded by Medicaid.  According to the Census of Governments manual, Hospital charges for services (Code A36) include charges from patients, private insurance companies, and public insurance programs (such as Medicare).   However as of fiscal year 1974 data, intergovernmental aid for hospital medical care under public assistance programs (such as Medicaid) has been reported at Public Welfare, code B79 or C79, rather than code A36.  It is mixed in with federal and state funding for cash welfare and social services.

Other places where local government public Hospitals cover less than half their costs with charges include San Francisco (25.0%), Cook County (Chicago) 18.7%), Suffolk County (Boston) (11.3%), Harris County (Houston) 15.9% and Palm Beach County (23.4%).

But that isn’t the case everywhere.  In some places public hospitals cover their costs, or even are profitable, just like New York’s non-profit hospitals.  Nationwide, in fact, charges for services equaled 84.5% of local government Hospital expenditures in FY 2017.  They equaled 105.4% of expenditures in Westchester County, 64.1% in Nassau County, 89.7% in Erie County (Buffalo), and 93.2% in Monroe County (Rochester).  Along with 95.8% of expenditures by the Charlotte-Mecklenburg Hospital Authority, and 115.1% of expenditures by the Los Angeles County Medical Center.  In Dallas, where President Kennedy was brought to Parkland Hospital, a public hospital, after he was shot, such hospitals covered 55.2% of their expenditures with charges for services.

But do all these public Hospital agencies really understand that under the Census of Governments, even though money paid by Medicare counts as a charge for services, money paid by Medicaid does not?  The 2017 Census of Governments reports that charges for services equaled 80.6% of total expenditures at state Hospitals, which traditionally serve the mentally ill, and 92.4% in New York State, but just 43.2% in New Jersey and 29.8% in Connecticut.

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The biggest destination for state and local government health care expenditures, and U.S. government health care expenditures in general, is Medical Vendor Payments, code E74.  According to the manual, this category includes:  Payments under public welfare programs made directly to private vendors (i.e., individuals or nongovernmental organizations furnishing goods and services) for medical assistance and hospital or health care, including Medicaid (Title XIX), on behalf of low-income or other medically-needy persons unable to purchase such care.

New York’s Medicaid program has always been the most expensive, the most generous, and the most wasteful and fraudulent, and its private health care providers and unions among the most politically powerful interests in the state.  In FY 2017, New York spent $45.06 per $1,000 of state residents’ personal income on Medical Vendor Payments.  The U.S. average was $32.08.   Other large states with above average spending per $1,000 of personal income included Massachusetts ($37.98), Pennsylvania ($38.01), Vermont ($34.68), Maine ($37.84), Rhode Island ($40.37), Indiana ($39.97), Minnesota ($38.15), Ohio ($39.59), and California ($37.47).  None as high as New York in payments to private health care providers, even though many of these other states have far less in public Hospital expenditures than New York does.

New York, however, was only 10thin the country in spending per $1,000 of personal income on Medical Vendor Payments.  Most of the top states were those with lower average incomes, where the federal government covers a much higher percentage of total Medicaid expenditures that it does in New York.  The latest federal matching percentage by state, always at the minimum 50 percent for base Medicaid expenditures in most “Blue States” such as those on the Northeast Corridor and West Coast, is here.

Federal Medical Assistance Percentage (FMAP) for Medicaid and Multiplier

The highest spending Medical Vendor Payment states, per $1,000 of state residents’ personal income, were New Mexico ($65.40), West Virginia ($56.94), Kentucky ($56.19), Arkansas ($55.63), DC ($55.01), Mississippi (54.56), Louisiana ($50.90), Alaska ($48.28) and Delaware ($45.16).   In Alaska the federal share of base Medicaid expenditures was 50.0%, as in New York, New Jersey, Connecticut, Massachusetts and California.  It was 57.4% in Delaware.  Otherwise it was much higher.

There were zero expenditures in this category in Wyoming in FY 2017, implying all Medicaid-funded expenditures were at government-run facilities that year.  Other low spending states included North Dakota ($15.83 per $1,000 of state residents’ personal income), South Dakota ($17.55), Nebraska ($18.91), Virginia ($20.50), Utah ($21.17), Colorado ($22.10), Georgia ($22.74), New Hampshire ($22.80), North Carolina ($23.75) and Illinois ($23.82).

The low North Carolina spending in this category is offset by high public Health and Hospital expenditures, presumably also funded, at least in part, by Medicaid.  Not so in Illinois, where total spending on public Health, public Hospitals and Medical Vendor Payments combined was 45thin the country among states.  The Federal Medicaid matching share is just 50.96% in Illinois, and 67.4% in North Carolina. Well run states, it seems, aren’t those that spend less.  They are those that spend other people’s money.

Among those states is the State of New York, which figured out a way to provide more money to politically powerful health care providers without as much of a hit to state taxes – by having local governments pay for a substantial share of the Medicaid spending within their borders.  This policy hits harder in New York City, where Medicaid beneficiaries have been concentrated, particularly beneficiaries of services for which the state requires a higher matching share.

In FY 2017, there were $8.47 billion in local government payments to the State of New York for Medicaid, in the Hospital and Public Welfare categories.  That was 91.4% of the U.S. total of $9.56 billion.  Outside New York City, county governments make these payments.  By itself New York City, at $5.92 billion, accounted for 63.9% of total local government to state government payments for Medicaid and hospitals in the entire country.  Just the local government share of Medicaid equaled $9.59 per $1,000 of NYC residents’ personal income, or nearly four times the city’s spending on public Health.  This compares with an average of $2.50 per $1,000 of personal income for Downstate Suburbs, $3.54 for the Upstate Urban Counties, and $4.64 for the rural counties in the rest of the state.

Had Donald Trump’s Obamacare repeal bill passed, only New York City would have continued to pay local taxes for payments to the State of New York for Medicaid.  City residents would have had to pay more in state taxes to cover the entire non-federal bill in the rest of the State.

https://larrylittlefield.wordpress.com/2017/05/20/medicaid-the-rest-of-new-york-state-re-declares-war-on-new-york-city/

On the other hand, thanks to a mid-2000s revolt against the local government share of Medicaid in New York, led by former Nassau County executive and candidate for Governor Tom Suozzi, that local share was capped, and has fallen per $1,000 of personal income throughout the state.  For New York City, such local payments to the state equaled $10.48 per $1,000 of city residents’ personal income in FY 2007, and $9.59 in FY 2017.  The decrease for the Downstate Suburbs was from $2.79 to $2.50, with decreases of $4.03 to $3.54 for Upstate Urban Counties and $4.79 to $4.64 for Upstate Rural counties.

These small decreases in local government to state government payments for Medicaid took place at a time when state Medical Vendor Payment expenditures were rising rapidly per $1,000 of personal income.  For the U.S. as a whole, after edging up from $18.05 per $1,000 of personal income in FY 1997 to $22.71 in FY 2007, spending jumped to $31.99 per $1,000 of personal income in FY 2017.  New York State’s Medical Vendor Payment expenditures, which had always been relatively high per $1,000 of state residents’ personal income, have gone higher, from $29.64 in FY 1997 to $35.64 in FY 2007 and $45.03 in FY 2017.

The bigger move upward, however, was in some other states:  California, Massachusetts, Pennsylvania.  Over the decades, California’s low Medicaid spending stood in contrast with its big government, socially generous reputation. In FY 1997 it spent just $14.62 per $1,000 of state residents’ personal income on Medical Vendor Payments, well below the U.S. average of $18.05 at the time.  California was even further below average in FY 2007, at $15.85 compared with $22.71.  But by FY 2017 California’s Medical Vendor Payment expenditures had jumped to $37.47 per $1,000 of state residents’ personal income, well above the U.S. average of $31.99.

Massachusetts has always been above average in the category, but only slightly as of FY 1997 at $19.35 per $1,000 of personal income compared with $18.05.  By FY 2017, however, Massachusetts was at $37.98, well above average. The same may be said of Pennsylvania, below average at $17.22 per $1,000 of state residents’ personal income in FY 1997, but far above at $36.70 in FY 2007.

As a possible explanation, while Medicaid is purportedly a health care program for the poor, a large share of the expenditures are on custodial care for the old, care that is so expensive that even middle class seniors who require it eventually exhaust their resources and end up on Medicaid. Population growth has slowed in Massachusetts, Pennsylvania, and even California, and that means additional expensive seniors in the program, compared with the incomes of working adults.

But somehow having lots of seniors – seniors from other states – hasn’t jacked up spending in low-tax Florida, ranked 35thin Medical Vendor Payments per $1,000 of state residents’ personal income at $24.86. Many seniors from other states, who move to Florida for low taxes when they are well off, return to the Northeast for assistance when their money is gone, their health declines, and they require custodial care.

 

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The centerpiece of state and local government health care spending is the federal Medicaid program, which pays for more than half of it.   When I last wrote a series of posts like this, based on the 2012 Census of Governments, there was extensive financial information on Medicaid by state available from the Centers for Medicare and Medicaid, based on administrative records.  One could easily download the number of beneficiaries, and expenditures, by state, for different age groups, and for different services.

Much less information about Medicaid finances by state is readily available today – even compared with the information provided about Medicare by the same organization.  I suspect there has been an attempt to limit access to data about Medicaid finances to authorized parties capable of aggregating large data sets with millions of individual records into totals.

I was able, however, to find a table of total expenditures by state for FY 2018.

Total Medicaid Spending by State-Category Fy 2018

Medicaid spending by service is no longer all that comparable across states, given that about half of all NY State expenditures were on insurance premiums for private insurance, not individual services.  But it is at least possible to calculate total Medicaid spending by state per $1,000 of the personal income of state residents.

The data shows that New York State spent $54.42 per $1,000 of state residents’ personal income on Medicaid in FY 2018, 65.5% more than the U.S. average of $32.87 and far more than New Jersey ($24.42), Connecticut ($29.93), Massachusetts ($35.68), and Pennsylvania ($41.47).  Or Vermont ($47.04), Minnesota ($38.19), California ($33.65), or Oregon ($41.66).

While New York State was not in the top ten in state and local government health care spending overall, as measured by the 2017 Census of Governments, it was second in the country in spending funded by Medicaid, according to this administrative data for 2018.   Behind New Mexico at $58.63.  Other states with high expenditure levels, though not as high as New York’s $54.42, were West Virginia ($52.22), Kentucky ($51.66), Louisiana ($50.28), DC ($48.69), Mississippi ($46.72), and Alaska ($46.41).  In all these states save Alaska, the federal government is paying for a much higher share of Medicaid expenditures than in New York.  That is why Medicaid, along with Elementary and Secondary Education, explain most of New York’s high tax burden.

Medicaid Spending Per Enrollee2014

The Medicaid spending per enrollee data that is available, from the Kaiser Family Foundation for FY 2014, shows New York State’s per enrollee spending was $7,806 overall, 36.1% higher than the U.S. average of $5,736, ranking eighth.

By basis of eligibility, New York spent $20,888 per enrollee on the aged, 59.9% more than the U.S. average of $13,063, ranking fourth.  And $24,905 on individuals with disabilities, 47.7% above the U.S. average of $16,859, ranking fifth.  But just $4,453 per enrollee on other poor adults, just 35.8% above the U.S. average of $3,278, ranking 18th. And just $2,627 per enrollee on children, just 1.9% above the U.S. average, ranking 28th.  These findings are similar to previous years.

Low-tax Texas spent more on Medicaid for children, per enrollee, than New York did.  Meanwhile New York’s average Medicaid spending of $20,888 per aged enrollee is nearly three times the $7,281 for Florida, which is the fifth lowest in the country. No wonder anti-tax seniors who head for Florida in their 60s often return when their money is gone and they require custodial care.

In New York, especially in New York City, seniors have always counted for more than children, even in the allocation of public school spending, thanks to all the retroactive pension increases for retired and soon-to-retire teachers.  This policy dates back to a time when 70 percent of NYC’s seniors were non-Hispanic Whites, and 70 percent of its children were not, but it has remained even as that demographic situation has changed.

Similarly, as Medicaid expenditures have soared, they have accounted for a higher and higher share of New York City’s expenditures “for the needy.”  As in the nation as a whole, New York City’s once-high cash welfare expenditures have nearly disappeared, though they have leveled off per $1,000 of personal income since 2005.

 

In conclusion, let’s take a quick trip around the country to show the long-term trend in public Hospital and Medical Vendor Payment expenditures combined, as a percent of the personal income of the residents of different states.

As one would expect, the national average shows big jumps in expenditures as a percent of personal income during recessions, when more people lose their private insurance and end up on Medicaid, and personal income falls.  From the 2.0% of income in 1988 to 3.0% in 1995, from 2.7% in 2000 to 3.5% in 2005, and from 3.3% in 2007 to 4.0% in 2013.

Despite the absence of a recession, but also given the absence of a real recovery, this percent increased to 4.4% in 2017.  The long-term trend is relentlessly up, with state and local government public Hospital plus Medical Vendor Payment expenditures absorbing a larger share of everyone’s income, and government spending. This is driven by three factors.

  • The population continues to age
  • Health care continues to become more expensive.
  • Employers continue to cut off employer-funded health insurance to workers, in part by turning them into “gig economy” workers. Even in companies that provide health insurance, the employees are paying for more and more of it.

As my former boss once put it, we already have universal health insurance.  The problem is it is Medicaid, and it sucks.  Medicaid is also the problem with Obamacare.  Since most people don’t have any assets to spend down before qualifying for Medicaid anymore, why pay private health insurance premiums to be insured?  If you get sick, you will get care – and lose what little you have – anyway.

New York State, with state and local government public Hospital plus Medical Vendor Payment expenditures equal to 5.8% of state residents’ personal income, has remained far above the national average.  NY State spending an additional 1.1% more of its residents’ income on these services in FY 1972, and 1.4% more in FY 2017, with a peak of spending an additional 1.9% of state residents’ personal income in FY 2004.

Affluent New Jersey and Connecticut have remained far below average in spending on these services.  Massachusetts and Pennsylvania have been very close to the U.S. average since the early 2000s.

In the Midwest, what jumps out is how low Illinois public Hospital plus Medical Vendor Payment spending has been as a percent of state residents’ personal income, with the gap compared with the U.S. average growing over time.

Illinois residents were somewhat better off than the U.S. average in 2017, according to American Community Survey data, with a median household income of $62,992 compared with $60,336, a per capita income of $37,156 compared with $32,397, a poverty rate of 12.6% compared with 13.4%, and 69.9% having private insurance compared with 66.9%.  But while many young workers have been flocking to Chicago, the state’s population has been stagnant overall, which implies that a rising share of its population is seniors — who might at some point require expensive custodial care. And yet Illinois spent just 3.0% of its residents’ personal income on public Hospitals plus Medical Vendor Payments in FY 2017, compared with the U.S. average of 4.4%, and in Minnesota, 4.1% in Wisconsin, and 5.5% in Indiana.

According to the Kasier data for 2014, Illinois’ Medicaid spending per aged enrollee was $11,912, below the U.S. average of $13,063 and not much more than the $9,306 in Arizona.  Perhaps when Illinois seniors leave for a low tax state, they don’t come back for Medicaid-funded care.

In Florida, in contrast with the national average and most states, public Hospital plus Medical Vendor Payment expenditures haven’t gone up much as a percent of state residents’ personal income during recessions, and at some points have even gone down.  This has kept state and local government spending in these categories well below the U.S. average, despite a large (if affluent) senior population, a poverty rate of 14.0% compared with the U.S. average of 13.4%, and just 62.1% of the population having private health insurance compared with the U.S. average of 67.9%.  In Florida, 12.9% of the population was uninsured, compared with 8.7% of the U.S. population.  Even so, Florida’s state and local government public Hospital and Medical Vendor Payment expenditures equaled just 3.5% of state residents’ personal income in FY 2017, the same as in 2009 and far below the U.S. average of 4.4%.

Georgia’s state and local governments spent just 3.3% of its residents’ personal income on public Hospitals plus Medicaid Vendor Payments in FY 2017. That was the lowest since 2000, and aside from the booming 1998 to 2000 period, when incomes were high, the lowest since 1985.  Georgia was one of the states that did not expand Medicaid under the affordable care act. It is now an outlier on the downside almost as much as New York is an outlier on the upside.

California’s public Hospital plus Medical Vendor payment expenditures have now risen to the point where people who relied on the media, and were unfamiliar with the actual numbers probably, assumed they were all along. At 5.0% of California residents’ personal income, these expenditures were well above the U.S. average of 4.4%. California had been below average, albeit slightly, as recently as FY 2014.  Medicaid administrative data for that year show California averaged just $4,193 spent per enrollee, well below the U.S. average of $5,736. California, it seems, provides benefits to many people, not high payment levels to the health care industry.

 

The next post in the series will focus on state and local government expenditures on non-medical state and local government Aid to the Needy – cash assistance, social services, and housing.

2 thoughts on “Health Care: 2017 Census of Governments Data

  1. Pingback: Aid to the Needy: 2017 Census of Governments Data | Saying the Unsaid in New York

  2. Stevie

    California has been the recipient of “Greyhound Therapy” (dubbed “Patient Dumping” here) also, particularly from Nevada. Which sometimes triggered nasty grams and demands for reimbursement from the offenders. Wouldn’t surprise me to see more of that despite the bad PR generated.

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