New York State has a long-standing commitment to supporting its most vulnerable populations through Medicaid-funded services for older adults and those requiring long-term care. However, rising costs and an increasingly complex healthcare landscape have created challenges that demand innovative solutions. As New York seeks to align its healthcare system with evolving needs, the time has come to adopt integrated care models that promote sustainability, efficiency, and improved outcomes.
The Program of All-Inclusive Care for the Elderly (PACE) offers a clear path forward. This model has consistently demonstrated its ability to reduce healthcare costs while enhancing patient outcomes by integrating medical, social, and behavioral health services under one umbrella. PACE allows older adults to age in place by expanding access to home- and community-based services (HCBS). These services empower individuals to remain in their homes rather than institutional settings, which not only aligns with patient preferences but also reduces system-wide costs. Despite these clear benefits, New York has not approved a new PACE program since 2011, leaving this proven model underutilized in the state.
Integrated care models like PACE deliver significant advantages. By addressing social determinants of health—such as transportation, housing, and nutrition—these programs take a whole-person approach that improves both health outcomes and quality of life. At the same time, they streamline administrative processes, reducing bureaucracy for patients and providers alike. Nationally, PACE has shown remarkable success in reducing duplicative services, unnecessary hospitalizations, and other inefficiencies that drive up costs in fragmented care systems.
As the state considers reforms, it should prioritize integrated care models that promote collaboration, simplify care delivery, and align incentives across payers and providers. This could include a phased approach to transition eligible individuals from partial capitation and fee-for-service models to fully integrated plans, such as PACE or Medicare Advantage Plus (MAP). By setting clear benchmarks for integration and incentivizing innovation, the state can create a roadmap for meaningful progress.
To fully realize the potential of integrated care, New York must also address existing barriers to expanding PACE programs. Simplifying the regulatory framework and providing financial incentives for organizations willing to invest in PACE would go a long way toward increasing access, especially in underserved areas. Additionally, collaboration between managed long-term care plans and PACE could enhance the continuum of care for patients, ensuring they benefit from the strengths of both models. Nonprofit and community-based organizations, which have a history of delivering high-quality, cost-effective care, should also be given opportunities to expand their reach and impact.
Addressing misaligned incentives between Medicaid, which is state-funded, and Medicare, which is federally funded, remains a critical priority. Strengthening partnerships between state and federal entities will enable shared savings arrangements that reward innovative, high-performing care models. New York has an opportunity to lead the way in aligning these funding streams to support integrated care more effectively.
As Medicaid cost control becomes a pressing issue, piecemeal reforms that add complexity without meaningful benefits must be avoided. Instead, the state should take bold, decisive action to embrace integrated care models that deliver both financial sustainability and improved outcomes. By prioritizing proven programs like PACE, fostering collaboration among stakeholders, and removing barriers to innovation, New York can honor its commitment to aging populations and build a long-term care system that is both effective and enduring.
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