Governor Cuomo Accepts Recommendations from the Medicaid Redesign Team

Albany, NY (February 24, 2011)

Governor Andrew M. Cuomo today accepted a report from the Medicaid Redesign Team which meets the Governor’s Medicaid spending target contained in his 2011-2012 budget by introducing a global cap on State Medicaid expenditures of $15.109 billion. The report included 79 recommendations to redesign and restructure the Medicaid program to be more efficient and get better results for patients.

New York spends more than twice the national average on Medicaid on a per capita basis, and spending per enrollee is the second highest in the nation. At the same time, New York ranks 21st out of all states for overall health system quality and ranks last among all states for avoidable hospital use and costs. Unfortunately years of attempts to address the problem have been unsuccessful.

In an unprecedented change from past practice, Governor Cuomo established the Medicaid Redesign Team (MRT) bringing together stakeholders and experts from throughout the state to work cooperatively to reform the system and reduce costs. The approach was designed to move past the dysfunction and rancor of the past and produce real results for all New Yorkers.

“This comprehensive and consensus proposal achieves the dramatic reform this state needs to reduce costs without jeopardizing patient care,” Governor Cuomo said. “This approach was not about making cuts but redesigning a program whose costs are unsustainable. I commend the MRT chairs Michael Dowling and Dennis Rivera, New York State Medicaid Director Jason Helgerson, Deputy Secretary for Health and the Director of Healthcare Redesign James Introne and all of the Team members for their dedication to this difficult assignment. I would also like to thank the people who attended any of our statewide public meetings to have their voices heard.”

Beginning in January, the MRT held a series of meetings in every region of the state. The meetings were open and transparent, and anyone could offer their ideas for savings either in person or in writing. Meetings were broadcast on the Internet and materials were posted on the MRT’s Web page. The MRT received over 4,000 ideas from New Yorkers that were all evaluated and reviewed.

The recommendations submitted today to Governor Cuomo meets the Governor’s budget target by introducing a global cap on State Medicaid expenditures of $15.109 billion through a variety of mechanisms, including:

* Proposals that would reform the Medicaid payment and program structure and generate $1.138 billion in total state savings
* Eliminating the permanent law statutory cost drivers which generate $186 million in state savings
* Implementing a two-percent across-the-board rate reduction to generate $345 million in savings
* Prepaying certain Medicaid payments to leverage additional enhanced Federal matching funds made possible under ARRA, which generates a $66 million benefit
* Industry-led cost containment initiatives totaling up to $640 million in savings, representing an unprecedented partnership between the state and its healthcare industry. The Medicaid program will be subject to a contingency reduction if this goal is not met

These proposals will benefit both taxpayers and patients. One million New Yorkers will have access to patient-centered medical homes, and within 3 years, almost the entire Medicaid population will be enrolled in some kind of care management.

Specific recommendations in the report include:

* Enacts a Global Medicaid Budget Cap.
* One Million New Yorkers will now have access to patient-centered medical homes (PCMHs). This proposal catapults New York into a national leadership position.
* Major expansion in use of care management. Within 3 years almost the entire Medicaid population will be enrolled in some kind of care management.
* Introduces new controls in personal care and home health that will both reign in out-of-control spending and preserve access to these vital services.
* Reform Medical Malpractice and lower health care costs.
* Streamlines/eliminates program regulations – direct response to stakeholder feedback – in ways that will lower costs for providers and make the program easier to navigate for consumers.

The Team issued its first report ahead of its March 1st deadline and will continue to generate ideas for further reforms and submit quarterly reports until the end of Fiscal Year 2011-12, when it disbands.

New York’s multi-billion dollar Medicaid program is paid for by state, county and federal taxes. In a majority of the state’s counties, Medicaid costs alone account for more than half of the entire county tax levy.

Jason Helgerson, New York State Medicaid Director said, “To try and fix the problems with Medicaid the same way it’s been done the past would only lead to the same failures. The Governor knew we needed a different approach and that’s what the Medicaid Redesign Team is. We brought together experts and stakeholders to work cooperatively to reduce costs and reform the system, and we did it in an open and transparent way.”

James Introne, Deputy Secretary for Health and the Director of Healthcare Redesign said, “We met our targets and we did it through consensus. This report is a package of reforms that will bring unprecedented change to Medicaid, and the team will continue to meet to identify additional savings and reform. I want to thank Governor Cuomo for allowing me to serve with this prestigious and professional group.”

Stephen J. Acquario, New York State Association of Counties said, “The process used to produce this report was extraordinary. I commend Governor Cuomo for his vision to redesign the Medicaid program in a transparent manner, engaging health care experts and the public. The current health care system is unsustainable and these recommendations are an important first step toward reducing costs for governments and improving patient health care outcomes.”

Steve Berger, former Chairman for the Commission on Health Care Facilities in the 21st Century and a board member for the Partnership for New York City said, “This has been an extraordinary, but not perfect process. It is the first time that the state and providers have met together to reshape this program. We don’t agree on all the details, but we agreed on a process for making cuts, building major new structures for behavioral health and moving, finally yet carefully, to achieve the benefits of managed care.”

Michael Dowling, President and CEO of North Shore LIJ Health system said, “New York has no choice but to reduce Medicaid spending, but it does have a choice of between reform or the continued across the board reductions that are not in the best interests of health care providers or the people they serve. These recommendations represent the better option for everybody.”

George Gresham, President of 1199 SEIU United Healthcare Workers East, said, “This process has been a real partnership between the State, industry leaders and our service providers. The results of this effort will help preserve the quality of care for our most vulnerable residents.”

Ken Raske, President of the Greater New York Hospital Association said, “The recommendations of the MRT are groundbreaking for Medicaid programs across the United States. The inclusion of a global cap will clearly contain Medicaid expenditures. The process for arriving at these recommendations was thoughtful and required the untiring work of the team members. I thank Governor Cuomo for his foresight and leadership in making this happen.”

Daniel Sisto, President of the Hospital Association of New York State said, “I want to commend Governor Cuomo for his leadership and vision in deftly addressing this enormously complex and important issue. The MRT recommendations balance the need to address the state’s historic budget deficit with the equally critical need to redesign and sustain the Medicaid program. The Governor’s strategy proved to be a unique and effective method of generating the sometimes painful compromises necessary to secure approval of these recommendations. It is clear that these actions are necessary to protect a Medicaid program that would have collapsed upon itself had we not acted, and that is why I support them.”

Elizabeth Swain, Chief Executive Officer of Community Health Care Association of New York State said, “I am honored to have participated in the critical work of the Medicaid Redesign Team. Though with challenge I believe New York will benefit greatly from the thoughtful reforms of this process. In particular I am pleased to see the heightened value and importance of Primary Care and Patient Centered Medical Homes.”

Medicaid Reform: Let’s Do It Right (read the press release from the New York State Nurses)

Recommendations adopted by the Medicaid Redesign Team (click here)

Cuts to New York’s Elderly Rx Program Could Mean Seniors Go Without the Drugs They Need

The EPIC prescription drug assistance program helps older New Yorkers age 65 and older pay for prescription drugs they need. It gives almost 300,000 older New Yorkers the peace-of-mind of knowing they can afford their medications when they need them.

The Governor’s proposals would all but eliminate this potentially life-saving program for older New Yorkers who depend on it and it would undermine a program that for 25 years has guaranteed that seniors don’t leave the pharmacy counter without their medicines.

Please help us protect this vital program by sending a message to your state legislators asking them to reject the Governor’s proposed budget changes to EPIC and to help keep older New Yorkers healthy.

Recipients:
Your State Senator or Senators
Your State Representative or Representatives

Please protect seniors by REJECTING the Governor’s proposed EPIC cuts by visiting AARP’s website:

https://action.aarp.org/site/Advocacy?cmd=display&page=UserAction&id=1079

DiNapoli: Wall Street Bonuses Declined in 2010

Earnings Down from Record High, but Wall Street Has Second Best Year Ever

Cash bonuses paid to New York City securities industry employees declined by nearly 8 percent to $20.8 billion in 2010, about one third less than paid out in 2007 before the financial crisis, according to an estimate released today by State Comptroller Thomas P. DiNapoli. The decline in the cash bonus pool reflects changes adopted by the industry in response to regulatory reforms, such as a shift toward deferred compensation and higher base salaries. Wall Street profits totaled $27.6 billion in 2010, which would be second only to 2009 when the industry benefited from federal bailouts and low interest rates.

“Cash bonuses are down, but that’s not an indicator of a weakness on Wall Street,” DiNapoli said. “Wall Street is changing its compensation practices in response to regulatory reforms adopted in the aftermath of the greatest financial meltdown since the Great Depression. Past practices rewarded short-term gains at the expense of long-term profitability.”

“The industry’s greater emphasis on deferred compensation will hold down tax collections this year, but the State and the City will benefit in future years when taxes are paid on this deferred compensation. A more stable and less volatile securities industry is in the best interests of Wall Street, the City and the State.”

DiNapoli’s office annually releases an estimate of bonuses paid to securities industry employees who work in New York City. Bonuses paid by New York City-based firms to their employees located outside of the City (whether in domestic or international locations) are not included. DiNapoli’s estimate is based on personal income tax trends and reflects cash bonuses and deferred compensation for which taxes have been prepaid. The estimate does not include stock options that have not been realized or other forms of deferred compensation.

Last year, bonus payments extended into March and even April, well beyond the traditional bonus season. As a result, the Comptroller has revised his estimate of the growth in the 2009 bonus pool from 17 percent to 27 percent.

DiNapoli also reported that:

* The profits of the broker/dealer operations of New York Stock Exchange member firms, the traditional measure of Wall Street profitability, totaled $27.6 billion in 2010, making 2010 the second most profitable year on record after the $61.4 billion record set in 2009, which was fueled by federal bailouts, low interest rates, and proprietary trading.

* Strong Wall Street profits combined with a profitable banking sector helped drive
New York City’s tax collections higher in City fiscal year 2011.

* Before the start of the financial crisis, business and personal income tax collections from Wall Street related activities accounted for up to 20 percent of New York State tax revenues, but that contribution has declined to about 13 percent in the current year. Wall Street’s contribution to the City’s budget has declined from 13 percent of City tax revenues to 7 percent.

* The member firms of the New York Stock Exchange devoted nearly 47 percent of their net revenue to compensation (e.g., salary and bonuses) in 2010, which is in line with historical shares before the financial crisis but much higher than the 2009 share.

* Although the size of the cash bonus pool has declined, overall compensation has grown. An examination of the financial statements for selected securities firms indicates that overall compensation was higher by 6 percent in 2010.

* Wages paid to workers in the securities industry in New York City during the first half of 2010 were 21.9 percent higher compared with the prior year, reflecting cash bonuses paid during the first quarter of 2010 for 2009 activities, higher base salaries, and deferred compensation that was realized during that period.

* The securities industry in New York City lost 30,700 jobs during the recession, a decline of 16 percent, or 3.5 times the rate of total job loss in New York City.

* The securities industry in New York City added 3,600 jobs between August 2010 and December 2010, and an examination of trends in employment covered by New York State unemployment insurance suggest job gains may have been even stronger during this period. The New York State Department of Labor is scheduled to release revised employment data in March 2011.

* The average cash bonus declined by 9 percent to $128,530 in 2010. The average bonus declined slightly faster than the total bonus pool because the pool was shared among slightly more workers than in 2009.

Click here for a chart showing bonuses paid from 1985-2010.

New York’s Vanishing Millionaires–and Other Myths

By Robert Fran

High state taxes are chasing out the rich, according to the antitax crowd. We have it in Maryland, New Jersey, Rhode Island, and Connecticut.

Now comes some new research claiming that taxes are driving the rich out of New York. But like the other research, it contains some fundamental flaws.

The Partnership for New York City, comprised of business leaders, says the state’s “Millionaire’s Tax” has forced some of the state’s most valuable earners and tax-payers to other states. The tax, which applied to those earning $200,000 or more, expires at the end of 2011. But some Democrats want to keep it from expiring.



The Partnership says New York lost a net 1.7 million residents from 1999 through 2008, and the average net worth of people who left was $338,000, citing stats from the Center on Wealth and Philanthropy. (Note, this is before the “Millionaire’s Tax” was imposed).

The report says that from 2007 to 2009, when the Millionaire’s tax was imposed, New York saw a 9.4% decline in state taxpayers who earn $1 million or more. Citing stats from Phoenix Marketing, the Partnership says the number of $1 million earners fell to 345,892 in 2009 from 381,786 in 2007.

It sounds scary. But it isn’t entirely accurate. As the liberal Citizens for Tax Justice points out, the 9.4% decline was actually for people who have wealth of $1 million, not for those who earn $1 million or more. And during that time, the nation as a whole lost wealth and millionaires because of the stock-market swings.

But there is something else to note in the Partnership’s research. The number of millionaires in New York actually increased in 2010–while the tax was in place. New York had 381,197 millionaires in 2010, an increase of 35,000 millionaires from 2009. This again likely reflects wealth gained from the stock market and Wall Street, not from taxes.

Kathryn Wylde, the president and CEO of the Partnership, was kind enough to call me while she was out of the country to clarify. She said the population number is indeed for wealth not income. But when I pointed out that the numbers still failed to prove a link between tax changes and the population of rich people, she said that “anecdotally” she was hearing a lot about wealthy people leaving the state, to lower-tax New Jersey, Connecticut and Florida.

“It’s a very difficult thing to measure,” she said. “We get a lot of it anecdotally. Our evidence is from conversations with lots of high earners and there is an increasing tendency to gravitate to lower-tax places.”

She is absolutely right. Measuring the precise movements of the wealthy is difficult without data. It is even harder to measure the reasons for their movements. And that is why we should take all of these studies for what they are–political talking points with very little supporting data.

It is very possible rich people are leaving New York because of high taxes. But there is little or no supporting evidence.

Do you think the rich are leaving New York because of taxes?

Cuomo’s austerity budget will kill N.Y. jobs: Why not tax the top 5% instead of slashing services?

By Frank Mauro and James Parrott

Missing in Gov. Cuomo’s proposed executive budget is any connection to New York’s unemployment crisis or the adversity affecting millions.

The governor proposes cuts that are economically counterproductive and tragically unnecessary, given the fact that a simple, fair and sensible tax increase on the top 5% of income earners would go a long way toward digging us out of our fiscal hole.

New York’s unemployment has averaged 800,000 in recent months, nearly twice the prerecession level. Half of these people have been out of work for more than six months. If you add in discouraged and underemployed workers, 1.3 million New Yorkers are directly affected by the shortage of work. Among blacks, underemployment is at a Depression-era level of 22%.

New York government is not alone in bleeding red ink; 46 states had to close enormous budget gaps last year, and most face another year of daunting challenge. In fact, New York’s budget gap is far from the greatest – 13 states face larger gaps as a percent of their budgets. Among the 13 are two neighboring states, New Jersey and Connecticut, and several states often held up as economic examples for New York, including North Carolina and Texas.

Yet the prevailing budget winds in Washington rule out anything as sensible as state fiscal relief. And many states are unwisely slashing assistance to the needy, squeezing public-sector workers and reducing critical investments in education and infrastructure. New York should rise above this certain-to-fail austerity budget mentality. But Cuomo’s budget falls for it hook, line and sinker.

You have to go back to the early 1990s to find a New York State budget that invokes such austerity in the midst of broadly felt economic adversity. The number of New Yorkers receiving food stamps has grown by more than 1 million since the recession began. A record 1 million New Yorkers lost employer-provided health insurance in 2009. One in every four residents of the Empire State now relies on Medicaid, and among children, it’s four out of 10. The recession pushed up poverty in 2009 by 300,000.

Yet the governor’s budget ends funding for adult homeless shelters in New York City, freezes the meager public assistance allotment and wipes out funding for summer youth jobs and a host of work support programs.

Legislators taking up the governor’s proposals to slash local aid and state agency operations should keep in mind that, according to the state Labor Department, New York has already lost 44,000 state and local government jobs over the past two years – a greater decline than in the finance/insurance industry or construction, and second only to manufacturing.

What makes no sense is that, despite all this unnecessary pain and calls for “shared sacrifice,” the governor has shunned the one obvious measure that would moderate the severity of budget cuts: extending the personal income tax surcharge paid by the richest 5% of New York taxpayers. Preserving the surcharge, by itself, does not do a lot to help in the coming budget year, since it currently extends through Dec. 31. But it would make a $5 billion difference next year, when the state would otherwise face the second year in a row of deep cuts in school aid, Medicaid, higher education and other areas.

Since Cuomo’s State of the State address, there have been many references to the Tax Foundation’s business tax climate rankings, which put New York dead last among all states. When you look closely at this, however, you have to wonder if it was cooked up by the Fox News fact factory. The states that rank highest (South Dakota, Alaska and Wyoming) depend heavily on mineral extraction taxes, something that has little to do with factors that make a state a smart business location. The things that do make a state a smart business location – a skilled workforce, a good education system and a decent transportation infrastructure – don’t matter in the Tax Foundation’s ranking.

Rather than jumping on the budget-cutting bandwagon, Albany leaders should try to understand why, according to the federal Bureau of Economic Analysis, New York has the highest productivity per worker among the 10 largest states. They should appreciate the role of investments in infrastructure and public services in supporting our economy.

The worst thing about New York’s state and local tax structure is its regressiveness. Middle- and low-income families pay a much higher share of their income than do the richest 1%, who earn 35% of all income, up from 10% in 1980.

Given our challenges, it makes little sense to cut taxes for those who are doing the best. Remember, Washington just extended huge federal income tax cuts at the high end. New York needs to reject budget austerity and instead generate the revenues necessary to help cope with widespread adversity.

Mauro is executive director and Parrott is deputy director and chief economist at the Fiscal Policy Institute.

CSEA: Wisconsin is Ground Zero (with video)

by Rick Karlin

The 150 or so public (with a smattering of private sector) union employees that came to a solidarity demonstration a few minutes ago at CSEA headquarters in Albany may pale in comparison to the thousands who have occupied the Wisconsin state capitol this week, but labor activists said they were standing behind their brethren in the Badger State.

Toting signs that read “We support Wisconsin workers,” and chanting “Hey Hey, Hey Ho, Union Busting Has Go to Go,” local labor officials said the battle raging in Wisconsin is yet another example of how the U.S.’s middle class is under assault.



“Wisconsin is ground zero,” said Kathleen Scales, Executive Director of the Capital District Area Labor Federation.

Most of those at the Friday afternoon rally said they realized the changes proposed by Wisc. Gov. Scott Walker go far beyond anything that’s been discussed in New York. Walker has presented legislation that would pull collective bargaining rights for public unions (except police and firefighters) for all but salary issues. He’s also looking for big increases in health and pension payments from the unions.

But there was plenty of anger, largely about what union members view as a pass given to the rich in the form of tax cuts in recent years, which they say have led to current budget shortfalls.

“It’s an assault by the very rich on the middle class,” said Joe Seeman, a union activist and MoveOn member. “I don’t know if they are going to get away with it in Wisconsin,” he said of Walker’s plan. “It wouldn’t happen here.”

Others shared the belief that Gov. Andrew Cuomo, while looking to cut state workers costs and playing hardball with talk of potential layoffs, probably wouldn’t try outright union busting. He is, after all, a Democrat (Walker is a Republican) and New York is the bluest of blue states (Wisconsin, though, has a long history of labor activism as well as progressive politics).

“I don’t think he’s the type of individual that would allow that to happen in New York State,” Sharon DeSilva, a lawyer and PEF member, said of Cuomo.

Watch the video:
http://bcove.me/xbf30jf0

Cuomo Adviser Takes Pay From Health Industry

by Nicholas Confessore

When Andrew M. Cuomo married Kerry Kennedy in 1990, Jeffrey A. Sachs served as an usher. When Mr. Cuomo’s daughter Michaela was born, he asked Mr. Sachs to be her godfather. When his marriage fell apart years later, Mr. Cuomo stayed in Mr. Sachs’s triplex near the United Nations.

Since Mr. Cuomo’s election as governor last fall, Mr. Sachs, 58, has taken on a powerful role among his health care advisers as the administration confronts crucial decisions, including how to overhaul New York’s $53 billion Medicaid program.



But at the same time, Mr. Sachs, known to many in Albany as “Andrew’s best friend,” is working as a paid consultant to some of the biggest players in the New York health care industry, including Mount Sinai Medical Center, NYU Langone Medical Center and the state’s largest association of nursing homes, all of which have financial interests at stake in the coming Medicaid changes.

Mr. Sachs, whose firm is named Sachs Consulting, has never registered as a lobbyist, which would require him to divulge his clients and fees to the state ethics commission.

Through a spokesman, Mr. Sachs said that none of his contacts with state officials constituted lobbying under state law, which broadly excludes anyone who advises clients on how to influence public policy, among other exceptions.

After inquiries from The New York Times, a spokesman for Mr. Sachs released a statement late Tuesday saying that Mr. Sachs had “frozen all contact on behalf of clients with state officials for the duration of the Cuomo administration.”

Mr. Sachs will remain a health care adviser to the governor, and the spokesman, Jesse Derris, did not rule out Mr. Sachs’s participating, if asked, in general discussions of health care policy.

Mr. Cuomo’s spokesman, Josh Vlasto, issued a statement soon after Mr. Derris, saying, “Nobody in the administration knows his clients, nor could it possibly matter, since Mr. Sachs has said he won’t represent anyone before the state, so the innuendo of the story is totally irrelevant.”

The influence Mr. Sachs has been wielding since Mr. Cuomo’s election on Nov. 2 has startled some in the state’s tight-knit health care world.

In December, according to correspondence obtained by The Times, the director of a state-run psychiatry institute said that he was fired after Mr. Sachs, unhappy that the director had clashed with one of his clients, pressured a top state official to dismiss him.

And, as Mr. Sachs advised Mr. Cuomo on his transition and health care policies, state officials have made decisions that surprised many in the health care industry but were favorable to Mr. Sachs’s clients. After inquiries from The Times, the administration abruptly rescinded one of the decisions.

In addition to helping Mr. Cuomo recruit senior staff, Mr. Sachs has quickly emerged as a leader on the governor’s 27-person Medicaid redesign team, the group that is drawing up the governor’s plan to pare billions in spending from the program.

“His membership on the Medicaid team is worrisome to us because he has clients that are not disclosed,” said Judy Wessler, director of the Commission on the Public’s Health System, a nonprofit group that opposes Mr. Cuomo’s proposed cuts.

The Cuomo administration appears sensitive about the governor’s relationship with Mr. Sachs. When Mr. Cuomo announced the members of the Medicaid redesign team, Mr. Sachs was identified only as “chairman of the John F. Kennedy Jr. Institute for Work Education,” a nonprofit development organization, omitting his work at Sachs Consulting.

Mr. Sachs, a nonpracticing dentist who earned his degrees at the State University at Stony Brook, is known as much for his cultivation of the powerful and famous — he was a friend of the late John F. Kennedy Jr. and a board member of the Leonardo DiCaprio Environmental Foundation — as for his shrewd understanding of health care systems.

His influence began to build late last year, as the Albany establishment, especially officials in the Paterson administration who wished to remain in state government, prepared for Mr. Cuomo’s arrival.

Though he was never formally named to Mr. Cuomo’s transition team, Mr. Sachs played a major role, participating in interviews of candidates for top health care jobs and running some of the interviews, according to people involved in the process.

Mr. Sachs was also an early advocate of the “Wisconsin model” of Medicaid, under which the governor would set a target for spending reductions and then appoint a task force of industry stakeholders to apportion the cuts. The approach has political appeal for the governor, in that it entices would-be opponents of spending reductions to participate in the plan rather than protest it. But it also endows the unelected team members with immense power.

Mr. Sachs made recommendations to Mr. Cuomo and his aides about whom to appoint to the Medicaid team, which Mr. Cuomo formed through an executive order in January. During the transition, Mr. Sachs also helped assemble a four-person policy team to begin meeting with state agencies about the best approach to reducing Medicaid spending. The team included James Introne, an executive at ArchCare, the Roman Catholic hospital network, and Bruce E. Feig, an executive deputy commissioner at the state’s Office of Mental Health.

Mr. Sachs knew them both well: Mr. Introne was his former boss and mentor and Mr. Feig his assistant in the Carey administration. Mr. Feig later worked for Sachs Consulting before taking his current job in 2007.

On the recommendation of Mr. Sachs and others, Mr. Cuomo later appointed Mr. Introne, a veteran of state government and large health care organizations, as deputy secretary for health, the top health care policy job in the administration. Mr. Cuomo has also kept Mr. Feig in his job as the No. 2 official at the Office of Mental Health.

While he was helping Mr. Cuomo assemble his health care staff, Mr. Sachs’s name arose in an unusual personnel matter, one that held great interest for one of his clients, NYU Langone Medical Center.

For at least a year, NYU Langone had had strained relations with Dr. Harold S. Koplewicz, a well-known psychiatrist who founded the hospital’s child psychiatry center but left in 2009 to start a competing research and clinical center.

Relations worsened because Dr. Koplewicz, who also served as director of the Nathan S. Kline Institute for Psychiatric Research, a state-run psychiatric center in Rockland County that also has a research affiliation with NYU, refused to allow NYU to screen those he hired at the institute, among other issues.

During an October meeting between Mr. Sachs and Dr. Koplewicz, Mr. Sachs suggested the doctor resign from the Kline Institute, people briefed on the meeting said. Should he lobby too aggressively to keep his job, Mr. Sachs warned, Mr. Cuomo, then widely expected to win election, might choose to close down the institute.

In a later meeting in December, Michael F. Hogan, state commissioner of mental health, told Dr. Koplewicz that he had been warned by Mr. Sachs that his reappointment by Mr. Cuomo would be jeopardized if Dr. Koplewicz did not resign, according to the people briefed.

Afterward, Dr. Koplewicz wrote Dr. Hogan a letter detailing his accomplishments as director of the institute and complaining of the pressure being exerted by Mr. Sachs.

“As you explained — and I appreciate your candor — you have been pressured by NYU through Jeff Sachs to have me resign as a condition for your reappointment as commissioner of mental health,” Dr. Koplewicz wrote in the letter.

In a response sent the following day, Dr. Hogan did not dispute Dr. Koplewicz’s account but suggested that he had been insufficiently cooperative with NYU and the Office of Mental Health.

“Accordingly, your service as director, Psychiatric Research Institute, will end effective Jan. 13, 2011,” Dr. Hogan wrote.

Dr. Koplewicz and Dr. Hogan both declined to comment, though neither disputed the authenticity of the letters. One day after Dr. Koplewicz was fired, Mr. Cuomo announced Dr. Hogan’s reappointment as commissioner of mental health.

Mr. Vlasto, the Cuomo spokesman, said Dr. Koplewicz’s firing was unrelated to Dr. Hogan’s bid for reappointment.

“Dr. Koplewicz was dismissed after a yearlong saga,” Mr. Vlasto said. “His dismissal had absolutely nothing to do with the reappointment of Commissioner Hogan.”

Mr. Derris, in a separate statement on Tuesday night, said: “Dr. Koplewicz had issues for over a year with his job performance, and lost his position because of it. The implication that Jeff Sachs had anything to do with his dismissal is pure fiction.”

Dr. Koplewicz’s departure shocked some local officials in Rockland County, who had admired his work and pressed administration officials fruitlessly for an explanation.

“I made several phone calls advocating for his continuing in that position, and did not get any kind of response,” Assemblywoman Ellen Jaffee, a Democrat of Rockland, said.

Even as Mr. Sachs was helping shape the incoming administration’s health care team, he was promoting his clients’ private interests.

In December, the Department of Health issued a so-called emergency rule change granting Mount Sinai Hospital of Queens, a Sachs Consulting client for the last eight years, additional Medicaid reimbursements worth millions of dollars.

The hospital had been seeking the rate change for at least five years, officials there said, and it was not clear why it was finally issued during the waning days of the Paterson administration.

But two people with knowledge of the decision said that Mr. Sachs personally phoned state officials, including Lawrence S. Schwartz, the top aide to then-Gov. David A. Paterson, to discuss the hospital money. At that time, Mr. Schwartz was under consideration by Mr. Cuomo for a job in the new administration. Mr. Schwartz now works for Mr. Cuomo as a senior adviser.

Separately, two weeks ago, Mr. Introne ordered the freeze of undisbursed grants under a program intended to encourage efficiencies in New York’s health care system. They included a $62 million disbursement, approved after a two-year review, that would underwrite the planned merger of SUNY Downstate Medical Center and Long Island College Hospital, a struggling institution in Brooklyn.

The delay startled officials at both hospitals, in part because Mr. Cuomo’s budget, released earlier in the month, had already authorized other financing related to the merger. The decision threatened to imperil the merger, without which LICH would be forced to close. But the delay had one potential beneficiary: Brooklyn Hospital Center, a Sachs client, which stood to absorb most of LICH’s patients should that hospital close down.

The following day, a spokesman for Mr. Cuomo said that the administration had decided to hold up all the grants as part of a review likely to take two to three weeks. After local officials protested the decision and after inquiries from The Times, the administration announced three days later that the LICH grant would proceed.

Both Mr. Introne and Mr. Sachs declined through spokesmen to say whether they had ever discussed the grants.

But Mr. Sachs’s position on the grant was well known: He had been telling others in the industry for months that the grant to LICH was a mistake and that the state needed a more comprehensive approach to address hospital financing in Brooklyn and Queens.

“What Jeff said is, ‘This is crazy,’ ” said Stephen Berger, who sits with Mr. Sachs on the Medicaid redesign team. “ ‘You’re dealing with one hospital. We have four or five there. Why are you dealing with one hospital when the others are falling like dominos?’ ”

DiNapoli: Wall Street Bonuses Declined in 2010

Earnings Down from Record High, but Wall Street Has Second Best Year Ever

Cash bonuses paid to New York City securities industry employees declined by nearly 8 percent to $20.8 billion in 2010, about one third less than paid out in 2007 before the financial crisis, according to an estimate released today by State Comptroller Thomas P. DiNapoli. The decline in the cash bonus pool reflects changes adopted by the industry in response to regulatory reforms, such as a shift toward deferred compensation and higher base salaries. Wall Street profits totaled $27.6 billion in 2010, which would be second only to 2009 when the industry benefited from federal bailouts and low interest rates.

Cash bonuses are down, but that’s not an indicator of a weakness on Wall Street,” DiNapoli said. “Wall Street is changing its compensation practices in response to regulatory reforms adopted in the aftermath of the greatest financial meltdown since the Great Depression. Past practices rewarded short-term gains at the expense of long-term profitability.”

“The industry’s greater emphasis on deferred compensation will hold down tax collections this year, but the State and the City will benefit in future years when taxes are paid on this deferred compensation. A more stable and less volatile securities industry is in the best interests of Wall Street, the City and the State.”

DiNapoli’s office annually releases an estimate of bonuses paid to securities industry employees who work in New York City. Bonuses paid by New York City-based firms to their employees located outside of the City (whether in domestic or international locations) are not included. DiNapoli’s estimate is based on personal income tax trends and reflects cash bonuses and deferred compensation for which taxes have been prepaid. The estimate does not include stock options that have not been realized or other forms of deferred compensation.

Last year, bonus payments extended into March and even April, well beyond the traditional bonus season. As a result, the Comptroller has revised his estimate of the growth in the 2009 bonus pool from 17 percent to 27 percent.

DiNapoli also reported that:

* The profits of the broker/dealer operations of New York Stock Exchange member firms, the traditional measure of Wall Street profitability, totaled $27.6 billion in 2010, making 2010 the second most profitable year on record after the $61.4 billion record set in 2009, which was fueled by federal bailouts, low interest rates, and proprietary trading.

* Strong Wall Street profits combined with a profitable banking sector helped drive New York City’s tax collections higher in City fiscal year 2011.

* Before the start of the financial crisis, business and personal income tax collections from Wall Street related activities accounted for up to 20 percent of New York State tax revenues, but that contribution has declined to about 13 percent in the current year. Wall Street’s contribution to the City’s budget has declined from 13 percent of City tax revenues to 7 percent.

* The member firms of the New York Stock Exchange devoted nearly 47 percent of their net revenue to compensation (e.g., salary and bonuses) in 2010, which is in line with historical shares before the financial crisis but much higher than the 2009 share.

* Although the size of the cash bonus pool has declined, overall compensation has grown. An examination of the financial statements for selected securities firms indicates that overall compensation was higher by 6 percent in 2010.

* Wages paid to workers in the securities industry in New York City during the first half of 2010 were 21.9 percent higher compared with the prior year, reflecting cash bonuses paid during the first quarter of 2010 for 2009 activities, higher base salaries, and deferred compensation that was realized during that period.

* The securities industry in New York City lost 30,700 jobs during the recession, a decline of 16 percent, or 3.5 times the rate of total job loss in New York City.

* The securities industry in New York City added 3,600 jobs between August 2010 and December 2010, and an examination of trends in employment covered by New York State unemployment insurance suggest job gains may have been even stronger during this period. The New York State Department of Labor is scheduled to release revised employment data in March 2011.

* The average cash bonus declined by 9 percent to $128,530 in 2010. The average bonus declined slightly faster than the total bonus pool because the pool was shared among slightly more workers than in 2009.

Click here for a chart showing bonuses paid from 1985-2010.

Latest health advice: Eat less

By MVP CEO Dave Oliker

The USDA recently released its new guidelines on what Americans should eat. Here’s the short answer: Less.

Meanwhile Michelle Obama’s “Let’s Move” campaign just celebrated its first anniversary of encouraging families to eat better and be more active.

Two-thirds of Americans are now either overweight or obese. We obviously need to eat less and move more. But what business is that of the federal government?

Very simply, overweight people are frequently unhealthy people who use more health care dollars. They are far likelier to suffer from diabetes, hypertension, and heart disease. Recent estimates of the annual medical costs of obesity in the United States are as high as $147 billion.

A government concerned about rising health care costs has a clear interest in our collective waistlines.

So, yes, the government should be urging us to be healthier not just for ourselves but for the country.

Does urging work, though? I remember pushing myself as a kid to earn a Presidential Physical Fitness Award. It was a certain number of pull-ups, sit-ups, and so on, and I was proud when I got my certificate “signed” by President Kennedy. That was in the Sixties. Now I’m in my sixties, and I still struggle to eat right and get enough exercise. As for the USDA guidelines, “eat less” may be a new one, but they’ve issued plenty of good advice in the past that Americans ignored while getting heavier and heavier.

Ultimately it’s about personal responsibility-each person deciding what’s for lunch. But what if people refuse to make good choices? Should the federal government take more aggressive measures? Some local governments are. There are counties that ban trans fats, states that are considering a tax on sugary drinks, and cities and towns that require calorie counts to be posted on menus.

Maybe we simply need more motivation to make better decisions. A growing list of larger employers who self-insure their employees (and as payers, are aware of the effect of obesity on health care costs and on productivity) are giving premium incentives to employees who have healthy BMIs or are trying to reach them. Could that sort of thing work with health insurance nationwide?

When does public health trump personal freedom? At what point are we as a nation paying too much for too many bad personal choices?

Mayor Bloomberg Presents FY 2012 Preliminary Budget

Outlines Plan to Close $4.58 Billion Deficit without Tax Increase or Additional Cuts to City-Funded Services

City’s $5.2 Billion in Savings and Growing Economy Prevented More Cuts Caused by State Budget; State Action Required to Avoid Further Reductions

Nearly $2 Billion in Additional City Money Committed to Education to Cover State and Federal Funding Losses

Mayor Michael R. Bloomberg today presented a Fiscal Year (FY) 2012 Preliminary Budget and an updated four-year financial plan. The Mayor outlined a plan to close a $4.58 billion deficit with no tax increases for New Yorkers and without additional cuts in City-funded services. The plan relies on $5.2 billion in savings generated though nine rounds of deficit closing actions taken by City agencies, additional tax revenues that reflect the City’s continually improving economy and $600 million in actions taken at the State level. The budget outlines the steps required to compensate for a loss of $2.1 billion in State funding, returned to the City, as detailed in the proposed State Executive Budget, and for the pre-existing $2.4 billion City deficit.

“By tightening our own belt for years and growing our economy, we’ve kept our house in order and closed our own budget gap without further cuts,” said Mayor Bloomberg. “Our sound management will help avoid the worst impacts of State cuts, but we can’t compensate for the full loss in State funding. So if we have to lay teachers off, we have to ensure we can keep the very best. The budget also relies on actions at the State level – to make cuts equitable and allow us to produce our own savings. We’re ready to do our part to help the State, but we don’t deserve to be penalized for our responsible actions. If the State does not come through, layoffs and service cuts will be more severe.”

The City’s Improving Economy

City tax revenues are forecast grow above previous projections, increasing from $39.0 billion to $40.0 billion in FY 2011 and from $40.8 billion to $41.9 billion in FY 2012, producing an additional $2.1 billion in revenues.

The increase in revenues was driven by economically sensitive tax revenues, which include personal income, sales, business, and real estate taxes. Economically sensitive tax revenues are projected to be $24.3 billion in FY 2012, and are approaching, but still below, pre-recession levels. In FY 2008, prior to the national recession, $25.7 billion in economically sensitive taxes were generated.

Factors contributing to the continued rebound in City tax revenue include:

* Job creation in New York City occurring at a faster rate than the rest of the nation.
* A record 48.7 million visitors to New York City in 2010.
* New York City’s commercial real estate market remaining the strongest in the U.S.

Education

The current State Executive Budget reduces education funding to the City for FY 2012 (the school year starting in the fall of 2011) by $1.4 billion. This massive reduction in funding comes at the same time as the City loses $850 million in Federal stimulus dollars used to support teacher salaries.

To prevent catastrophic personnel losses in the City’s school system, the Preliminary Budget provides a major increase in City funds dedicated to education, bringing the total amount of City funds used to replace lost Federal and State dollars to $1.86 billion.

City funded spending on education has increased from $5.9 billion in FY 2002 to $13.6 billion in FY 2012.

The State has not maintained a similar commitment to education in New York City. In FY 2002, State and City funding comprised a nearly equal portion of non-Federal spending on education. In FY 2012, City funding will comprise 62 percent of non-Federal spending and State funding will only comprise 38 percent of non-Federal spending.

Despite the City’s continued, strong commitment to education, State education cuts and the need to balance the budget mean that reductions in the size of the City’s teaching force are still required. A total reduction of 6,166 teaching positions will be eliminated, including 4,666 via layoffs.

State Social Service Cuts

The current State Executive Budget eliminates $403 million in funding for social services, health and criminal justice. The City’s Preliminary Budget uses $124 million of City funds to restore cuts to preserve the most essential services.

The remaining $279 State funding cut includes the elimination of:

* 15,000 Advantage Rental Subsides – $192 million
* Title XX Funding for Senior Centers – $27 million
* 5,500 Summer Youth Employment slots – $8.5 million

State Actions Required to Achieve Balance

The Preliminary Budget relies on three changes at the State level to achieve a balanced budget and avoid further cuts in services. Those changes are:

* Equitable Distribution of State Revenue Sharing Funds – $200 million. Currently, the State Executive Budget eliminates 100 percent of revenue sharing funding to New York City, while cutting only two percent from every other recipient in the State. A change to an equitable and uniform cut of one-third for all recipients would increase the City’s revenue sharing funding by $200 million.
* Moderate Reform of the Variable Supplement Fund – $200 million. The Variable Supplement Fund provides a guaranteed annual $12,000 payment to non-disability retired members of the New York City Police and Fire Departments.
* Additional State Education Aid – $200 million. The State Executive Budget reduces education funding to the City by $1.4 billion. A restoration of $200 million will demonstrate the State is honoring some of its obligations under the Campaign for Fiscal Equity settlement and will correct some of the major imbalance in State versus City funding in New York City schools.

If the actions above are not taken at the State level, the City will be forced to initiate a new round of agency gap closing actions to save $600 million. Given the cumulative impact of the $5.2 billion in gap closing actions already taken, an additional $600 million in actions would have a major impact on City services and personnel.

Capital Spending

In order to reduce the increasing costs of annual debt service payments, the Preliminary Budget reduces the City’s ten-year capital construction program, excluding water projects, by 10 percent – from $39.8 billion to $35.8 billion. The reduction will reduce forecasted debt service costs over ten years by $807 million.

Headcount

The City’s full-time and full-time equivalent headcount currently stands at 293,903. The City’s December 31, 2001 full-time and full-time equivalent headcount was 311,804.

Out-Year Gaps

The Mayor also announced today that while the Preliminary Budget for FY 2012 presents a balanced budget, New York City will still face budget gaps of approximately $4.9 billion in FY 2013, $4.8 billion in FY 2014 and $5.0 billion FY 2015.