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Mike Leavitt, Secretary of Health and Human Services


HHS Auditorium


Wednesday, Mar. 16, 2005

"Modernizing Medicaid"

Good afternoon. Thank you all for coming.

I'm delighted to be joined by Governor George Pataki of New York to talk about modernizing Medicaid.

Most of you are well aware that we are encouraging state officials to innovate in order to improve services to Medicaid populations, and New York has shown it can innovate successfully. The section 1115 waiver this Department granted to New York's Medicaid program in the 1990s and expanded in 2001 has allowed New York state government to provide care to 400,000 additional New Yorkers, in a way that saved more than $6 billion over eight years. New York has delivered care to more people in a more efficient and cost-effective manner.

Now, Governor Pataki wants to make his state's Medicaid system even more efficient and modern. He wants to use part of their savings to strengthen New York's health infrastructure so they can cover more people.

This is exactly the kind of innovative success we want to encourage by granting states more flexibility. The New York proposal has merit and we support Governor Pataki's efforts to move it forward. What he and his colleagues are doing is working. And we want to see more of it.

The goals the Governor is trying to achieve with his proposal are important goals to all of us, including this administration broad vision for Medicaid modernization.

One is liberating long-term care. We should eliminate the 1960s bias towards providing long-term care in nursing homes and encourage home and community services that let people live at home.

Another is encouraging e-prescribing and electronic health records. Medicaid can be a catalyst in establishing a system of interoperable electronic health records in America. This is not just good for Medicaid-it's good for our entire system.

We also want to reduce the price Medicaid pays for prescription drugs and create more incentives for Medicaid recipients to be careful consumers. We are conducting a dialogue with governors and members of Congress to advance these principles and modernize Medicaid.

Under our plan, states would be able to serve more people. Medicaid spending would still grow at more than 7% per year, when few other programs are growing at such a dramatic rate. Taxpayers would still spend $5 trillion over ten years. That's a significant investment, and we want that investment to go as far as it can.

We want to spur innovation and partner with states to make Medicaid more sustainable so it continues to serve America's most vulnerable people.

The department will work with New York officials on benchmarks. As soon as the necessary framework is in place, we will work with Governor Pataki and his New York colleagues on their waiver amendment and help them provide care to New Yorkers who depend on us.

I want to thank Governor Pataki for his leadership and invite him to make some comments.

Last revised: March 16, 2005


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