Year Two for the Step Two Policy Project

By Paul Francis | November 4, 2024


Introduction

We have begun Year Two of the Step Two Policy Project. Since we began posting papers on Substack in September 2023, Sally, Adrienne, and I have posted 32 papers (policy briefs, issue briefs, “spotlights,” and commentaries) on health policy in New York and other topics of interest. If we had been paid by the word, it would have jeopardized our not-for-profit status. But we are not paid by the word. Rather, our currency is the respect of our peers, the insights we generate, and, perhaps, our influence on public policy.

As we move into Year Two, I thought it would be useful to reflect on developments in the topics we addressed last year and to describe some of our areas of interest in the year to come.

Some public policy problems can be solved, but most of the big problems can only be managed. It is neither surprising nor depressing that most of our papers on the major challenges in health policy in New York State could be published again today with little need for revision. As I have said many times, political campaigns are all about “change,” but the big problems of government cannot be solved in one administration or two. It is a relay race and the best we can hope for our officials is that they run a good leg of it while they have the privilege of serving.

Although we wrote papers on some esoteric topics outside of our main focus areas, such as on the Medical Indemnity Fund and the “MCO Tax,” as well as a three-part digression that sought to dispel the cloud of misinformation concerning the Cuomo administration’s nursing home policies during the Covid-19 pandemic, most of our writing over the last year fell into the following categories:

  • the challenges of financially distressed hospitals (which were also addressed in some detail in our papers on rural health);
  • the challenges of long-term care – specifically personal care and home care financed through Medicaid managed long-term care (MLTC) plans;
  • transparency of health data and information, which is indicative of the larger issue of openness in government;
  • the affordability of healthcare;
  • delivery of care to people with complex needs; and
  • ruminations on fiscal aspects of governing in New York State, including the dynamics of the budget making process and the fiscal frameworks (or lack thereof) that guide State borrowing and spending.

I think it is worth taking a few moments to review the state of play on a few of these issues. The updates below emphasize fiscal issues, which are not intended to overshadow the programmatic issues on which we have written. Nevertheless, fiscal issues tend to drive the programmatic options in many of these areas. With the State budget-making process moving into a higher gear with the release of the Mid-Year Update to the Budget last week, it is timely to provide our own “mid-year update” on some of the major issues we examined in Year One.

The challenges of financially distressed hospitals

During my eight years in the Health portfolio, while focusing intensely on the challenges of financially distressed hospitals, few things frustrated me more than people who looked at the issue from 30,000 feet and said that “nothing has changed.” I knew that, on the ground, incremental progress was made every year at most of these hospitals to improve their operations. But even in good times, such efforts were swimming against the tide of larger forces that were depressing revenue and increasing expenses. That relentless tide would swamp the achievement of incremental progress. And when the Covid-19 pandemic accelerated these negative trends for safety net hospitals, the tide became a tsunami, with operating deficits roughly doubling at every financially distressed hospital downstate.

Now that I am no longer part of the Health portfolio, I don’t have the benefit of seeing the incremental progress on the ground. What is clear from the 30,000-foot view, though, is that hospital operating deficits are growing and there have not yet been significant structural changes at any of the major downstate financially distressed hospitals. On the other hand, I am aware of at least a few situations in which there has been a lot of activity over the last year below the waterline of public visibility. Strategic alliances among hospitals are being pursued under the umbrella of the new, more flexible process of the Safety Net Transformation Program, which was enacted in the FY 25 Budget. I expect we will see at least the outlines of some significant structural changes with the introduction of the FY 26 Executive Budget in January.

The fundamental problem remains, however, which is that bringing about meaningful structural changes requires the expenditure of more political capital or financial capital than policymakers have heretofore been willing to commit. If more strategic alliances among hospitals do emerge in the coming months, I expect that the transactions will be made possible only by the continuation of current levels of operating support for a considerable period of time, plus substantially more capital funding than the $500 million contemplated by the FY 25 Budget.

Financially distressed hospitals upstate, where financial need is much less, have been more successful in shaping their own destiny with relatively modest State funding support. Sally Dreslin’s excellent paper, Healthcare in Rural New York: Current Challenges and Solutions for Improving Outcomes, described initiatives, such as those at Cayuga Health System, Carthage Area Hospital, Claxton-Hepburn Medical Center, Samaritan Health, and Clifton-Fine Hospital, that have been able to engineer structural change mostly within the limits of the political and financial capital policymakers are willing and able to expend.

In addition to behind-the-scenes discussions about structural change and strategic alliances at a few downstate financially distressed hospitals, the year ahead will unveil the much-anticipated recommendations of Gov. Hochul’s Future of Healthcare Commission. The Commission, by design, is comprised (with two notable exceptions – former Budget Director Bob Megna and former Medicaid Director Brett Friedman) mostly of outsiders who have not been directly involved in wrestling with the problems of financially distressed hospitals and long-term care in New York. Although there are disadvantages to this approach, the hope is that the Commission will bring forward fresh perspectives that might jumpstart change in the financially distressed hospital policy world. The Commission is also expected to make recommendations regarding long-term care, which, as we discuss below, continues to grow at an unsustainable rate.

Another highly anticipated event related to financially distressed hospitals will be recommendations from the “advisory board for the modernization and revitalization of SUNY Downstate”[1] (the “Advisory Board”). The FY 25 Budget that established the Advisory Board called for public hearings, a study, and recommendations to be presented by April 1st, 2025.  University Hospital at Downstate starkly illustrates the stasis that results when policymakers are unwilling to invest either (A) the political capital that would be required to shrink the enterprise or (B) the financial capital that would be required to ensure its long-term financial sustainability.

In the coming year, the administration will begin to implement “hospital global budgets” under the federal Advancing All-Payer Health Equity Approaches and Development (AHEAD) model in conjunction with funding under the new 1115 Medicaid Waiver. A condition of eligibility for the receipt of funding under the hospital global budget initiative requires hospitals to develop and submit a “transformation plan” to the Department of Health. The theory of “all-payer hospital global budgets” is sound, but it remains to be seen how successful the model can be implemented in practice under the existing terms of the program. The fear is that the larger theory of all-payer hospital global budgets will not be given a fair trial if the funding is used primarily as a financing vehicle to stretch federal funding to support status quo operations rather than providing the opportunity for significant restructuring.

Finally, with respect to fiscal issues with financially distressed hospitals, there may be an element of magical thinking in the way the State’s financial plan is treating State advances of the federal share of payments under the Directed Payment Template program going back to 2022. The FY 25 Budget is assuming that financially distressed hospitals will repay $1.5 billion in such federal advances during FY 25. It is not as if these hospitals are carrying $1.5 billion cash on their balance sheet that they can use to make this repayment. Except to the extent these hospitals receive funding over and above their current deficit run rate either from a deferred federal share or additional State funding, they simply won’t have the funds available to make this re-payment.

The inexorable growth of personal care in long-term care

We wrote about the inexorable growth of personal care within long-term care in our paper, A Review of the Managed Long-Term Care Issues in the FY 25 Executive Budget. The paper discussed how personal care (which is often described as home care in the press, although New York reserves that term for nursing care) and the related Consumer Directed Personal Assistance Program (CDPAP) have grown dramatically over the last decade. Growth in spending in this sector is the most significant contributor to the 11% annual growth in Medicaid and is now crowding out spending in all other areas of the Health budget. Despite efforts in the FY 25 Budget to bend the curve of growth, enrollment in managed long-term care (MLTC) plans – which is almost entirely for personal care – continues to grow unabated.

Since the beginning of FY 25, MLTC enrollment has been growing at an annualized rate of 8.6%, on top of the growth rate of 10.2% in FY 24. The rate of spending growth significantly exceeds enrollment growth and, in FY 25, will almost certainly be in the double digits. The increased level of spending associated with a higher base of enrollment at the end of FY 25 will eat up much of the $1.6 billion of additional State share spending permitted under the Medicaid Global Cap in FY 26 before taking into account the windfall revenue from a new MCO Tax. The recently released Mid-Year Update of the FY 25 budget noted, “[T]he State expects to address the Global Cap imbalance in the FY 2026 Executive Budget with proposed actions to provide recurring savings and reduce State Medicaid costs while preserving access to care.”[2]

Our paper on Managed Long-Term Care Issues provided as good a description as I have seen anywhere on the history of the growth of MLTC and CDPAP. As we noted, much of that growth can be traced to policy changes to the CDPAP program beginning in 2011 that expanded eligibility for personal care and expanded the pool of individuals who could get paid for providing care under the CDPAP program. As discussed in our earlier paper, these changes included expanding the CDPAP program beyond those with physical disabilities, largely eliminating the requirement of “self-direction” on the part of the recipient of personal assistance, and expanding the pool of eligible caregivers to essentially anyone other than the recipient’s spouse.

In 2017, the “wage parity” provisions for personal care workers in the downstate region were extended to the CDPAP program. Although the wage parity payment of up to $4.09 per hour was used by licensed home care service agencies to pay for health benefits, the wage parity payment essentially became increased cash compensation for CDPAP aides.

The cumulative effect of these modifications to the program reached a tipping point in 2017 and resulted in dramatic increases in both MLTC enrollment and the share captured by the CDPAP program. These developments occurred when I was the Deputy Secretary for Health and Human Services, so I certainly bear some of the responsibility for the unintended consequences of these policies.

One of the truisms about entitlement programs is that, once created, they are very hard to cut back. The State began concerted efforts as early as 2018 to curb the growth of personal care in general and the CDPAP program in particular. In the FY 19 Budget, the State sought to sharply reduce the number of fiscal intermediaries (FIs) in the CDPAP program, but this initiative was thwarted by litigation. The Health portfolio (i.e., the health units in the Executive Chamber in DOB as well as DOH) spent much of 2019 working on the program adjustments to personal care that culminated in the March 2020 Medicaid Redesign Team (MRT) II recommendations, nearly all of which were enacted in the FY 21 Budget.

As fate would have it, however, most of the MRT II measures could not be implemented during the pandemic because the extraordinary amount of federal Covid-19 aid was tied to a Maintenance of Effort (MOE) provision that prohibited reductions in benefits or eligibility under Medicaid. The State will finish receiving funding from the federal Covid-19 aid program later in this fiscal year, at which time the MOE requirement will be lifted, and MRT II measures can be implemented. Perhaps the most significant of these delayed measures is the change in eligibility which will specify that new enrollees must require assistance with a minimum of three Activities of Daily Living (ADLs) to be eligible for personal care.

In the FY 25 Budget, the Hochul administration moved aggressively to reduce the number of FIs to an even greater extent than in the FY 19 proposal that was thwarted by litigation. In addition to unnecessarily increasing administrative costs, policymakers believe that many FIs market the availability of the CDPAP program and thus drive increased enrollment. Managing the fiscal intermediary role with a single entity as the general contractor will give the State a greater ability to limit marketing in ways that the State believes are inappropriate.

The hope is that incremental measures such as those delayed by the MOE and greatly consolidating the number of FIs will reduce MLTC enrollment while preserving services for those who need them the most. No good deed goes unpunished, of course, and Gov. Hochul has paid the price for advancing this commonsense consolidation of FIs by being put on the receiving end of lawsuits and an intense advertising campaign, which seeks to portray the reform as a compassionless reduction of services to recipients.

The Hochul administration is defending its FI consolidation effort by emphasizing that the initiative will not reduce benefits or change eligibility. In the short run, this strategy seems to make sense because it helps to push back on efforts to dilute, if not repeal, the FI reform efforts. But how, then, will the administration justify the new eligibility requirement for new enrollees of the need for assistance with at least three ADL’s? The Hochul administration has framed the CDPAP growth issue more broadly as being a function of fraud. In a program this large, there is always going to be some amount of fraud (in the criminal sense of the word). But the much larger problem is simply the generous structure of the program itself. Although designed with the best of intentions, it may simply be unaffordable for the State. Acknowledging this reality is politically difficult – so the day of reckoning continues to be postponed.

Personal care costs, in some respects, have become the New York State equivalent of the federal deficit, which is also financially unsustainable, but no one is willing to take the issue on. In a recent interview, the famed investor Paul Tudor Jones colorfully described the implicit understanding between the voting public and elected officials of both parties that the federal deficit will just work itself out somehow. He likened it to the practice of pro wrestling fans maintaining the illusion that the events, characters, and rivalries in wrestling are real – there is even a name for it, apparently – it’s called “kayfabe”.[3] The personal care kayfabe in New York is the belief that the unsustainable growth in personal care can be managed by reducing fraud and achieving administrative efficiencies without making significant changes in eligibility, benefits, or worker compensation.

There are three possible endings to the personal care story in New York. The first, an optimistic ending, is that there will be significant productivity improvements in delivering personal care services, which would offset enrollment growth by lowering the cost of service. Such productivity growth could be accelerated by AI-enabled technology throughout the personal care ecosystem. At the extreme, I don’t think it is science fiction to believe that within 10 years we could see affordable AI-enabled robotics handling many, if not most, personal care functions. Despite resistance in Japan to early attempts at robotic solutions, we are already seeing certain AI innovations being deployed among the elderly[4] – and the rate of change in technology is such that I think it is a question of when, not if, robotics play a significant role in personal care.

The second, more pessimistic ending, is that productivity improvements will not come fast enough and there will need to be consequential changes in eligibility or benefits for personal care, in addition to slowing the rate of compensation increases for personal care aides. The requirement of a minimum of three ADLs to newly qualify for personal care eligibility will be the canary in the coal mine for these types of changes. The Future of Healthcare Commission, which will make long-term care recommendations in addition to recommendations covering hospitals, could help to frame these options by benchmarking, at a granular level, New York’s personal care program to other states.

A third possible ending, which I regard as less plausible than fully functional humanoid robots for home care, is that a President will bail out the states by convincing Congress to enact a Medicare Home Care benefit. Vice President Harris proposed such a benefit several weeks ago on The View. Not to be outdone, former President Trump, at his Madison Square Garden rally, similarly endorsed a “tax credit for family caregivers who take care of a parent or loved one.” Former President Trump offered no details and Vice President Harris offered very few, although her campaign pointed to an estimate that her proposal would cost the federal government $40 billion. The cost of personal care and home care in New York alone is more than $25 billion, so the idea that even a stripped-down federal program would cost $40 billion is wishful thinking. Nevertheless, any federal benefit would potentially provide some budget relief for the states.

We can expect that the State will pursue a range of tactics before any of these ultimate endings are reached. As I said last year, one of the ideas that is not going away involves elimination of the existing system of having a plethora of managed long-term care plans. The current system could be replaced by one of two alternatives: first, a state-run program; or second, a highly consolidated group of MLTC plans that are selected through procurement. The legislature has rejected the procurement option in the last two Executive Budgets. The option of replacing MLTC plans, although endorsed by SEIU 1199 and the chairs of the Senate and Assembly Health Committees, could not even make it into either One House budget.

I have more confidence than many others that the State could directly manage long-term care through a fee-for-service program. My hypothesis is that this would take two years to develop but would result in significant administrative savings when completed. This would not structurally fix the personal care fiscal problem, but I believe it would result in a far more efficient program and postpone the day of reckoning.

I accept the argument that if it had been implemented as originally envisioned, managed care would have been the best mechanism to manage long-term care needs. However, as we pointed out in our Managed Long-Term Care Issues paper last year, managed long-term care in New York has been so corrupted in the way it has been implemented that it offers little benefit while adding a tremendous amount of cost. Moreover, the lion’s share of this additional cost in the form of administrative expense and the effects of “forum shopping” among plans is accounted for by four large for-profit MLTC plans – Anthem Blue Cross Blue Shield, Centers Plan, Village Care, and Senior Whole Health (as of September 2024), which was not the original vision of “care management for all” under MRT I.

If the administration and legislature are not prepared to eliminate MLTCs entirely, perhaps at some point, the intermediate step of consolidation of MLTC plans through procurement will be able to gain consensus. The comparison of MLTC plan consolidation to FI consolidation is obvious. The political resistance to such a policy would likely be proportionate to the dollars spent on MLTCs compared to FIs, which is to say the opposition would be enormous. That said, the day may come when it seems like the least-bad alternative programmatically and politically.

Transparency of health data and openness in government

We wrote several papers in the first year of Step Two about the related issues of transparency of health data and information, which, in my view, is a reflection of the lack of openness in State government generally. Unfortunately, health information and data, as well as the operations and decision-making of State government, are as opaque as ever. Unlike the problems of hospitals and long-term care, which need to be managed because they cannot easily be fixed, the problem of transparency of health data and information is much more straightforward. Building the health data infrastructure to integrate Health and Human Services information is a complicated technical exercise that requires a focused effort to reform state agencies’ culture related to “their” data, establishing enterprise-wide data sharing policies, updating State regulations, aligning cross-agency data definitions and structures, and implementing the technical work required to share and integrate.

On the other hand, reporting on the key elements of the healthcare delivery system could virtually be accomplished overnight. The vision should be clear: replicate the Center for Health Information and Analysis (CHIA) in Massachusetts and build upon that foundation to provide even more relevant data in New York. Most of this data is already collected by the Department of Health, including the Office of Health Services Quality and Analytics, the Office of Health Insurance Programs, and the NY State of Health, by the Department of Civil Service’s NYSHIP program, and by the Department of Financial Services. This transformation of New York’s health data and information infrastructure would represent a legacy accomplishment for the Hochul administration.

Of course, if this really were easy to do, I would have been able to accomplish it when I was in the Health portfolio. It is difficult to focus on what is seen as a “process improvement” when the house is on fire. But it is doable and can be done in parallel with other efforts. Once implemented, this type of infrastructure will be an invaluable tool in advancing other substantive goals in the Health portfolio.

In fairness, although the State has not articulated a comprehensive vision for an all-payer health data and information infrastructure other than with respect to quality,[5] there are ongoing efforts to improve the State Health Information Network of New York (SHIN-NY), including plans to better utilize health information exchanges to improve the quality of care delivered in the State. Other efforts are underway to gather and analyze data on healthcare outcomes and social needs in connection with the statewide health equity regional organization (generally referred to as the “HERO”) under the 1115 Medicaid Waiver. Finally, work continues to increase the functionality of and access to DOH’s All Payer Database, which has been under development for more than a decade.

My thesis about the importance of openness in government is simple. Hiding the ball and spinning the message are frequently a tactical success but too often lead to mistakes that are strategically disastrous. Bad ideas and decisions are often the ones that are made in hermetically sealed environments.

  • For Gov. Spitzer, it was the decision to ask the State Police to report on improper use of the State plane by the Republican State Senate Majority Leader, which became the Troopergate scandal.
  • Cuomo’s decision to delay releasing the number of out-of-facility deaths of nursing home residents until all the data integrity issues surrounding that number could be resolved, led to charges of a “cover-up” and conspiracy theories about what motivated the decision.
  • Hochul’s decision to abruptly “pause” congestion pricing three weeks before implementation painted herself into a corner that will be extraordinarily damaging programmatically (unless the decision is reversed) and will be damaging to her politically no matter what she does next.

Administrations the world over generally do everything in their power to prevent unintended press leaks and they measure their success by how few leaks occur. Ironically, press leaks often serve as trial balloons and early warning systems. You could make an argument that more openness about what is going on in plain sight – such as President Biden’s obvious cognitive decline, or the extent of whatever word you want to use for the conduct now under investigation in the Adams administration – would have wound up serving the principals better than silent loyalty.

Fiscal frameworks and the budget making process

We wrote a few papers in our first year about the State’s fiscal situation and the related issue of the affordability of healthcare. My thinking about fiscal frameworks has been shaped in part by spending time in London, where the way the UK government approaches fiscal issues differs greatly from the U.S. federal government and New York State government.

In the 1990s, the Conservative government in the UK established a set of “fiscal rules” relating to levels of public debt and government expenditures. The rules are not embodied in law but reflect policies that are refereed by an independent Office of Budget Responsibility (OBR). These fiscal rules, with minor modifications, have been embraced by UK governments of both political parties for more than 30 years.

In 2022, Prime Minister Truss sought to deviate sharply from the established UK fiscal framework rules, in particular by proposing tax cuts that were not offset by reductions in spending and bypassing the OBR. The reaction of the debt and currency markets in the UK was fierce, leading to her “mini-budget” being withdrawn and Prime Minister Truss resigning a mere 44 days after she introduced her heretical proposals.

These fiscal rules are very well understood by the public and substantially constrain fiscal policy regardless of which party is in control. The UK budget was released on October 30, 2024. Both the run-up to the budget release and the announcement itself were covered in the UK press the way we follow the Super Bowl. The news in the UK in the weeks leading up to the release of the budget on October 30, 2024, was dominated by speculation about what minor adjustments would be made in the fiscal rules by the new Labour government.

There is no comparable level of seriousness about fiscal policy at the federal or state level in the United States. The federal budget runs an annual deficit of approximately 6% of GDP – among the highest in the world. New York State spending is expected to grow by a third between FY 21 ($104 billion) and FY 25 ($139 billion), with FY 25 State Operating Fund spending increasing at an annual rate of 9.4%, according to the Mid-Year Budget Update. In the absence of clarity regarding long-term fiscal goals at the federal or State level, and with the lack of public understanding of such a fiscal framework, long-term fiscal goals are subordinated to immediate political needs.

One of the consequences of this lack of public debate about fiscal policy in the United States and in New York is the failure to prioritize spending (including spending on debt service) on productive assets as opposed to spending on consumption of government services. The economic term “consumption” is not intended to diminish the importance of spending on health, education, and social services, but rather to highlight the obvious: there simply is a long-term difference in terms of future revenue (and thus the ability to support health, education, and social services in the future) between spending on today’s needs as opposed to investing in assets that will support future growth.

When the UK budget was introduced on October 30, 2024, the new Labour government modified the fiscal rules to enable the equivalent of approximately $120 billion in capital spending on productive assets, while raising revenue to cover operating deficits. New York would benefit from an economically sophisticated discussion about the appropriate level of State debt. Budget watchdogs from the Office of the State Comptroller to the Citizens Budget Commission simply take it as given that more borrowing is bad and less debt is good. That is a premise that deserves to be challenged.

Although the case would have been easier to make when interest rates were low between 2009 and 2021, even at today’s interest levels, my view is that New York is under-leveraged and has a significant opportunity to improve the State’s long-term financial position by borrowing now for infrastructure and housing that will increase future revenue, as well as investing in assets, such as information technology for government operations, and even in safety net hospitals, that offer the promise of reducing operating expenses in the long run.

For every one percentage point of reduced State Operating Fund spending (roughly $1 billion) in the State budget that could be redirected to reserves for future debt service, the State could support roughly $10 billion in additional indebtedness annually – or roughly $50-60 billion over 10 years. This would dramatically alter the policy options relating to affordable housing, transportation, the healthcare delivery system, and government operations.[6]

What’s ahead in Year Two

In the year ahead, we will continue to write about our main focus areas, while expanding our attention in certain areas. Financial sustainability of hospitals and health data and information transparency continue to be important areas of focus. We hope to continue to focus on care for people with complex needs, including those with intellectual developmental disabilities (IDD). But we also plan to write a lot more about behavioral health in the coming year. We wrote a number of papers last year about the affordability of healthcare, noting that the threshold question in this area is “affordable for whom?” In terms of affordability of healthcare for government, there is no bigger issue than long-term care, and we will continue our work in this area.

Two other focus areas – “maximizing the healthcare workforce” and “access to dental and oral care” – are important topics that we weren’t able to address in-depth in our first year. We hope to make more progress on these topics in the coming year.

Finally, I wrote a number of “commentaries” on issues that go beyond health policy, such as the budget making process, openness in government, and fiscal frameworks in government. These “commentaries” are more subjective ruminations on topics of interest to me. I think there is a place for them, and I hope to write more such papers in the coming year.

We have the luxury of being able to adapt our work quickly to address issues of the day. Among the papers we currently are working on are the following:

  • School-Based Health Centers: school-based health centers offer a range of services, including primary care, chronic disease management, mental health counseling, dental services, health education, reproductive health, and referral services to approximately 155,000 enrolled, mostly lower-income students in their schools. The issue is topical because the Department of Health recently announced its intention to “carve-in” school-based health centers to managed care – a proposal that is fiercely resisted by school-based health centers and opposed by hospitals, labor, and managed-care plans – a rare trifecta. Our paper will also discuss how schools are being used to help address additional health-related social needs through what are known as “community schools.”
  • Behavioral Health: Many recent, high-profile incidents involving people with serious mental illness in New York City have highlighted the difficulty of individuals “falling through the cracks” of the human services and behavioral health safety net. We will be writing about the impact of the complex, siloed nature of the human services sector, including a specific examination of care management, and creating a matrix depicting the many programs and services that currently serve individuals experiencing or at risk of homelessness who have significant behavioral health needs.
  • Supportive Housing: Affordable, quality housing is among the most important social determinants of health, and homelessness is a critical health-related social need that must be better addressed. Supportive housing protects people with serious mental illness and substance use disorder from homelessness and, in the long term, promotes their health by stabilizing their environment, which facilitates recovery. We think it would be helpful to write more about the various types of housing under the broad umbrella of “supportive housing,” as well as discuss the economics of supportive housing. The various types of supportive housing include scatter site “supported” housing, community residences/single-room occupancy (SROs), congregate “level II” housing, independent housing for the frail elderly in the OPWDD population, as well as permanent supportive housing, in which approximately 10%-30% of the units in a development are reserved for special populations requiring supportive services.
  • Follow-up papers on financially distressed hospitals and long-term care, including reviewing the recommendations of the Commission on the Future of Health Care when they are issued.
  • Commentaries will address an eclectic range of topics, including how AI offers the promise of near-term changes in the delivery of healthcare and how government operates. I use ChatGPT every day as a research and analysis tool. The more you use it, the more you realize the potential it holds to improve productivity and quality of work. I am old enough to remember clearly the inflection point of the Internet in 1996 with the IPO of Netscape. A talk called “the Internet changes everything” by the CEO of Netscape affected me enough that I took the risk of becoming the sixth employee of Priceline.com – a decision with big applications for my future. You have to take seriously the prophecies today – positive and negative – about AI. And in many respects, the future is already here if we can just figure out how to better use this remarkable tool.

As always, we are grateful for the interest of our readers. If you have not done so already, we hope you will subscribe to our Substack, where the price is always right – it is free. Also, we would welcome any feedback you have through our Contact page.

Paul Francis is the Chairman of the Step Two Policy Project. He served as the Director of the Budget in 2007 and as the Deputy Secretary for Health and Human Services from 2015-2020, among other positions in New York State government, before retiring in May 2023.

[1] https://newyork.public.law/laws/n.y._executive_law_section_996

[2] Mid-year Budget Update at page 13.

[3] https://en.wikipedia.org/wiki/Kayfabe

[4] Already happening to address loneliness through the NYSOFA program with ElliQ – https://aging.ny.gov/elliq-proactive-care-companion-initiative and wearables/telehealth/remote monitoring, see https://www.homecareassociation.org.uk/resource/how-technology-and-a-i-are-shaping-home-care-services.html, and Japan has been trying to use robots for care tasks for 20 years, but it hasn’t been widely adopted – https://www.technologyreview.com/2023/01/09/1065135/japan-automating-eldercare-robots/.

[5] https://www.health.ny.gov/technology/qm/docs/2022_roadmap.pdf

[6] This illustration assumes that cumulative State Operating Funds savings compared to baseline growth in spending would be approximately $50 billion-$60 billion over 10 years which would support approximately 10 times that amount in State debt.