In Arkansas, Florida and New Jersey, some people who need long-term care have the option of taking control of the money the care costs themselves rather than being put in a nursing home. They can hire aides, buy equipment or spend it on whatever else they need.

In Arkansas, that means some who before needed help with cooking bought a microwave and others who couldn't do laundry on their own bought washing machines. Then they found they could live on their own.

In Maine, the state hired a company to help people decide what kind of care they needed when they were faced with the prospect of entering nursing homes. Nine years later, the state is spending less on nursing homes and more people are getting care at home.

In Arizona, a company gets a fixed amount of money for caring for those with long-term illnesses. Arizona has among the smallest proportion of its elderly population living in nursing homes of any state.

These states have all taken innovative steps in the face of the twin challenges of sharply rising spending on Medicaid and the desire of people to stay in their homes as long as possible.

New York, which spends far more on Medicaid than any other state, is only now starting to emulate these innovators. A task force appointed by Gov. George Pataki in January recommended that New York set up a program to help people decide what kind of long-term care they need, called NY-ANSWERS. The idea is similar to the one Maine adopted in 1995.

Politics is the reason that New York has found it hard to be as innovative as other states, said the co-chairman of a state Senate task force studying Medicaid.

"Part of it is everything we do is so political it becomes very difficult to maneuver your way through the Medicaid system,'' said Sen. Raymond Meier, R-Oneida County, citing the unions, health-care officials and others who have a stake in the $42 billion system. "I've been in town (Albany) for seven years and I can't figure it out.''

'We need a system-wide reform'

Pataki's top health-care adviser, Robert Hinckley, disputed the notion that the state has not tried innovative approaches to improve care and cut costs. He said the state had a foundation grant to set up a program similar to the one operating in Florida, New Jersey and Arkansas, but it was abandoned because the massive personal-care system in New York City didn't fit the program. He added that the state does have a small consumer-directed care program that now has about 3,500 clients.

"We have tried many approaches such as managed long-term care, personal-directed care, etc.,'' he said. "But (we) believe that now, more than ever, we need a system-wide reform. That is what has led to NY-ANSWERS.''

The early results are promising for states ahead of New York in terms of improved care and greater efficiencies, although those involved in them caution that a lot of money won't be saved immediately.

"The results have exceeded our fondest expectations,'' said Kevin Mahoney, a Boston College social work professor who is overseeing the experiments in Arkansas, Florida and New Jersey. "There have been gigantic improvements in client satisfaction, and the health outcomes have been either as good or better than the control group.''

He has the most complete results for Arkansas, where the program started in 1999. He said the first year was more expensive because more people started using services, but those extra costs were offset by a decline in nursing-home patients in the second year, and that it's likely there will be a savings from the third year and beyond.

Around the nation

In Maine, spending on nursing homes declined 17 percent between 1995 and 2001, according to the state Department of Human Services.

"Back in the early to mid-1990s, there was a recognition that Mainecare (the state Medicaid program) was pursuing a course that was fiscally unsustainable," said state Human Services spokesman Newell Augur. "We needed to do a better job of allocating our resources, and also wanted to provide patients with better choices.''

"We think this system has worked very well,'' said Steve Jennings of the Maine chapter of the AARP. "The key is it's provided by an on objective third party, not by providers, so you get objective information about your options.''

Arizona has kept costs down by holding the number of people in nursing homes to 1.1 percent of its over-65 population — compared to 4.5 percent in New York and a national average of 3.7 percent.

"You've got big institutions and we don't. We never did,'' said Leonard Kirschner, who went to medical school in Albany and who ran the Arizona Medicaid long-term-care system when it was established in 1989, when asked about that difference. Before 1989, Arizona counties paid the whole cost of long-term care.

"We've always had a model that was based on people's desire to stay in the community,'' he said.

And then there's California, which has almost twice as many people as New York (36 million to 19 million) but spends less on Medicaid ($36.8 billion in 2002 compared to $37.1 billion in New York that year).

Golden State spends less

One reason is California pays less for care. For example, the state pays nursing homes a flat $115 a day for nursing-home patients, compared to rates that vary from $192 to more than $300 a day in New York.

Yet not everyone in the Golden State sees this as a good thing.

The $115 a day is "ridiculous,'' said Ann Burns Johnson, head of California's nursing-home association. She said the actual cost for care is about $145 a day, with patients who pay out of their own pocket picking up the slack.

In addition, because there is no allowance for high-cost areas, there are no nursing homes that depend on Medicaid, for example, in San Francisco — the land is too expensive. So the elderly who need to be in homes are sent outside the city.

Johnson pointed out that there are also cultural reasons for the gap in Medicaid spending. For instance, people of Hispanic and Asian heritage, who together make up half of the state (37 percent Hispanic, 13 percent Asian) usually care for their elderly relatives at home. And she said the state has a far more extensive system of private assisted-living facilities than New York.

New York spends so much more than California for three major reasons, according to James Tallon, president of the United Hospital Fund, a think tank and philanthropic group:

• New York has more elderly and disabled Medicaid beneficiaries;

• New York makes more extensive use of the program to pay for health-care costs like mental health and mental retardation;

• Like the rest of the Northeast, people in New York use hospitals more frequently than those in the rest of the country.

"New York and California are the yin and the yang of Medicaid,'' Kirschner said. "New York wants to suck up all the money it can while California doesn't want all those federal rules and regulations.''