More Evidence that Incentives Matter
“We saw it happen almost overnight,” [State Senator Diane J. Savino] said, describing programs that sprang up in sites like former auto-shops and part-time banquet halls in neighborhoods like Brighton Beach and Manhattan’s Chinatown, siphoning off low-income immigrant seniors from regular senior centers, “and basically stealing Medicaid dollars to do it.”
“We’re dealing with the unintended consequences of a very good initiative,” she added, referring to the Cuomo administration’s Medicaid redesign, which has rapidly transferred tens of thousands of elderly and disabled people from a fee-for-service system to managed care, in an attempt to reduce Medicaid spending and nursing home use.
Under the new system, managed care plans get roughly $3,800 a month for each eligible person they enroll in New York City, regardless of what services are provided. The plans contract with the social adult day care centers to provide services to their members. But advocates for the elderly and for people with disabilities have warned state officials that some plans were “cherry-picking” healthy seniors by using the new day care centers as marketing tools, while shunning the people who needed hours of costlier home care.
Joan Pastore, director of Amico, a city senior center in Dyker Heights, Brooklyn, said members of the center told her that they were not only signed up by new centers with enticements like $100 in cash and $50 for bringing a friend, but “coached on how to lie to qualify for home care.” (NYT)
Yeah…incentives matter in this case to help people corrupt an already inefficient system.
The problem is that incentives create competition between economic tendencies and political currency. Bureaucrats should know better, many of them being successful businessmen — but unfortunately we get a tragedy of the commons effect.
I think that’s called the disutility of decision-making. Their share in spending is miniscule, creating incentives to make poor decisions when viewed in the aggregate because they have less of a stake in the consequences — and are often the sole beneficiaries of political gain.
So these senior health care centers are incentivized to lure in relatively healthy seniors so that they can receive these subsidies that supposedly are there to manage care more efficiently. Great way to incentivize more corruption!
People respond to incentives. If you want them to be good, set up the proper incentives.
Every policy the government implements should be based on creating private incentives. That is what has been proven to work throughout history.
We’ve got to make sure we are incentivizing the right kind of behavior!
That’s the problem.. I don’t want the government to decide what is and isn’t the right kind of behavior.
What is the right kind of behavior? That can vary widely between people. We need to be careful about incentivizing that people don’t want.
What kind of behavior is the “right kind” of behavior?
New York sucks up all the federal Medicaid dollars it can. Rather than put a stop to the wasteful practice, the PPACA expands it to the other 49 states.