May 30, 2007
The RBA has been advising against a proposal by Westchester County Association Chairman William Mooney and his Blue Ribbon Healthcare Taskforce for a forced HMO "reinvestment" in hospitals in the Hudson Valley region to the tune of $67 million per year for four years. Recently Jan Degenshein, of Degenshein Architects, and chairman of the RBA’s revamped Economic Development Committee has elaborated on reasons he believes that the proposed "Healthcare Reinvestment Act" would not be helpful to the overall healthcare situation.
While ostensibly an effort to make HMO's give some of their revenues to a struggling hospital industry in New York, Degenshein said ultimately the bill would simply be another tax on small businessmen and their employees who would have to pay higher premiums to cover the costs. He also noted that the bill's authors managed to delete many sectors from the required $268 million payback to hospitals including school districts, municipalities and large self insured businesses.
"I believe the HRA will add cost to health plans. I don't see executives lining up to reduce their compensation or shareholders lining up to give up their dividends. The burden will be on employees and employers. Small businesses will have to pay for this," Degenshein said.
"Some CEO's of HMO's may be overcompensated, but this is still a very small part of this. Even if you reduce that, it's not going to fix the problem in the hospitals. And if you cut the dividends for stockholders, they'll just invest money somewhere else which will immobilize HMO's," Degenshein added.
In Degenshein's view it is simplistic to scapegoat HMO's for the failing of the health care system that has problems in every sector.
"This is a major issue that requires a more global review and approach to the problem. It may be time to look at the system as a whole. Sometimes issues are poorly managed hospitals. We have to question why there are successful hospitals not in wealthy areas and why sometimes the very opposite happens and a hospital in an affluent area will fail to meet its bottom line. Physician compensation needs to be reviewed, cost of drugs need to be reviewed. There are so many elements, to make HMOs the scapegoat is the wrong approach," he said.
Degenshein also noted he felt the name of the act was somewhat disingenuous.
"It's not really a reinvesting act like the banking reinvesting act years ago, that was to deter redlining where people in poorer neighborhoods were being denied opportunity to have mortgages. The money they would receive was then paid back with interest. There is no payback here," Degenshein said.
These points had come up at the most recent meeting of the Economic Development Committee. Degenshein said the committee hopes to add positive ideas into the health care debate and connect with concerned parties in Albany and across the state. The EDC meets the second Monday of every month at 4 pm in the Blue Hill campus of IONA College, in Pearl River.
Other topics up for discussion this summer include the effect a new Tappan Zee bridge will have on economic development in the region and how to fine-tune laws for the Empire Zones in New York. Currently Empire Zones are under attack, Degenshein said, because some have not achieved what they promised.
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