NEW YORK, February 11, 2020 — As Governor Andrew M. Cuomo’s new Medicaid Redesign Team meets for the first time today, a new report, Wasted Billions, Wasted Health examines the state’s out-of-control diabetes costs as a major driver of its budget crisis and offers up a number of evidence-based, patient-centered education programs as a solution to the state’s $4 billion Medicaid gap.
The report from Health People, a leading disease prevention community group, calculates that New York’s excess diabetes costs have reached an unprecedented $13.4 billion a year. It also calculates the potentially enormous savings that diabetes patient-centered education programs could have to bring down those costs and close the budget gap.
The Centers for Disease Control and Prevention defines “excess diabetes costs” as the extra amount of money a state annually spends on Medicaid patients with diabetes, compared to those without diabetes. New York’s $15,366 a year extra cost per Medicaid patient with diabetes is the highest in the nation — and double that of any other state. Some 14 percent New York Medicaid patients are known to have diabetes.
According to the report, 18 percent of all Medicaid costs in New York are excess diabetes costs, which are substantially driven by complications and poor outcomes, such as diabetes-related blindness, kidney disease and amputations. In fact, the state’s diabetes-related lower limb amputation rate alone has soared 48 percent in the past decade.
These excess diabetes costs and complications, says the report, are significantly preventable through better clinical care and, especially, with well-evaluated patient self-care education. Yet, Wasted Billions, Wasted Health underscores that even while effective patient education is proven to help people with diabetes control their blood sugar, bettering their health and slashing costs, New York has the lowest diabetes patient education rate in the nation.
“New York is in a situation where it cannot lower Medicaid costs in a way that meaningfully improves health as long as the New York State Department of Health refuses to address diabetes –our most widespread epidemic,” said Chris Norwood, Executive Director of Health People and the report’s author.
“Diabetes presents the single greatest opportunity of any major disease to substantially save Medicaid money and significantly improve health outcomes for patients,” Wasted Billions, Wasted Health emphasizes. “This is because diabetes is prevented or much better controlled by ‘lifestyle’ changes people can readily learn.”
The report cites two best-practice, data-driven diabetes education programs – the CDC-endorsed National Diabetes Prevention Program (NDPP) and the Diabetes Self-Management Program (DSMP) — as among those that have successfully reversed diabetes among patients and reduced diabetes-related costs. For example, in a recent large-scale evaluation, the DSMP was show to save an average $2,200 in medical costs per diabetes patient in just the first year.
In terms of the potential savings, the report says “providing well-evaluated self-care for just 20 percent of state Medicaid diabetics and 10 percent pre-diabetics would potentially save the state a minimum of $306 million a year and up to $612 million in just the first year. Because patients’ improved ‘lifestyle’ lowers their costs for years, investment in education provides savings that continue on for years, while creating the implementation funding to keep expanding cost-saving strategies.”
The report also underscores that the state does not support any evidence-based strategies, including plant-based nutrition, which have been shown to help reverse diabetes and enable diabetics to cease taking or substantially reduce their medication.
NYS Department of Health Fails to Confront Diabetes
“Still, the New York State Department of Health has stubbornly refused to confront the diabetes epidemic and reduce its impact in any real way,” said report author Norwood, adding it has “even declined to make reducing diabetes- related lower limb amputations—which can easily cost $250,000 in just the first year— a goal of the state’s official “Prevention Agenda.”
Nor has New York’s health department supported effective patient self-care and education. Rather, it has essentially blocked it. In 2019 when the state legislature mandated that New York include the NDPP as a Medicaid benefit, the health department followed up by announcing a reimbursement “formula” that only paid for half the costs of providing the multi-session education for pre-diabetics. That, despite the fact that the NDPP has been shown to cut by 60 percent the risk that pre-diabetics will proceed to develop diabetes.
Since many of the nonprofit community-based organizations that deliver the NDPP to patients lack the funding to pay for the remaining costs, the state’s “penny-wise and pound-foolish” approach to the NDPP is leaving huge Medicaid pre-diabetic populations without an effective way to avoid diabetes.
“The state’s inaction is especially confounding since patient education for diabetes prevention and self-care is so relatively inexpensive to implement and so clearly pays for itself in reduced patient costs,” states the report. “To start a statewide program, New York need only provide an initial investment for organization and training in order to realize that investment within the first year of operation. Following that substantial year-by-year savings would accrue from prevention participants not developing diabetes and self-care diabetic participants having significantly lower risks of developing severe complications and other costly outcomes.”
“The state’s failure to use proven strategies to make the progress for diabetes we have seen for other epidemics is as baffling as it is unacceptable,” said Robert Morrow, MD, Associate Professor, Department of Family and Social Medicine, Albert Einstein College of Medicine. “As a doctor in the Bronx, which has the worst rates of diabetes complications, I am outraged that the state doesn’t support the serious and effective patient education which everyone knows is a key to controlling this ever-worsening epidemic.”
Failure to Confront Leads to Skyrocketing Medicaid Costs
As a result of this inaction, excess diabetes costs paid by the state are actually rising twice as fast as the overall Medicaid deficit. With a projected 14%, or 896,000 of the state’s 6.4 million Medicaid patients having diabetes, the mean extra annual cost of $15,366 for each patient has brought New York’s spending for excess diabetes costs to $13.4 billion a year out of total projected Medicaid spending for 2019-2020 of $74.5 billion.
With the state responsible for paying 33% of Medicaid expenditures, its $4.5 billion obligation for excess diabetes costs in one year is more than double the overall $4 billion Medicaid combined deficit for the two fiscal years of shortfalls.
“It’s incomprehensible watching billions wasted this way,” said Reverend John Williams, President of New Creation Community Health Empowerment, a Brooklyn faith-based health organization. “We have people trained and ready to provide the Diabetes Self-Management Program in Central Brooklyn – one of the worst hit areas by the diabetes epidemic. Yet, the state provides nothing to groups like ours – not even the educational materials needed. We have to ask what it means when a Health Department seems have just accepted the terrible level of disabilities and injured lives from this epidemic.”
For a copy of the report, visit Health People’s Newswise newsroom at: https://www.newswise.com/institutions/newsroom/19933.
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About Health People
Health People is a groundbreaking peer education, prevention and support organization in the South Bronx whose mission is to train and empower residents of communities overwhelmed by chronic disease and AIDS to become leaders and educators in effectively preventing ill health, hospitalization and unnecessary death.
Established in 1990 as a women’s AIDS prevention and support program, Health People has grown, using its peer-education model, to provide a full range of HIV/AIDS services for men, women and families. It also has conducted community asthma programs, New York’s first diabetes peer-educators program, and a community smoking cessation program. Health People’s Junior Peer program, Kids-Helping-Kids includes teens who are mentors for younger children with sick or missing parents.
For more information, please visit www.healthpeople.org.
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