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City’s Public Hospitals Fear Huge Loss in Subsidies
The city’s public hospital system, the largest in the nation, is facing a fiscal crisis because New York State is threatening to cut its financing for the care of poor patients at a time when the number of uninsured patients has soared, city officials said Sunday.
The cuts, included in Gov. David A. Paterson’s executive budget proposal, could drain from the public hospitals up to $370 million, much of it in federal financing, and shift the money to programs in voluntary, or private, hospitals, the city officials said.
The officials said the cutbacks were the latest in a series of steps by the state to close a huge deficit by pulling back on longstanding budget commitments.
State budget officials said, however, that much of the proposed cutback was the result of federal stimulus money running out. They added that the governor’s proposal also called for the State Legislature to enact cuts to private hospitals, and that some of that money would go back to the public hospitals.
Yet the dispute between the state and the city goes deeper, with both sides at odds on how much would be cut and how, and even on where some of the money comes from.
Alan D. Aviles, the president of the city’s Health and Hospitals Corporation, which runs the 11-hospital public system, said the proposed cuts would severely weaken the system, putting it on a downward spiral similar to that faced by the city’s Roman Catholic hospital system. New York’s last Catholic hospital, St. Vincent’s in Manhattan, is now near bankruptcy and struggling to avoid shutting down.
“If you look at the Catholic system and St. Vincent’s, the instability in that system didn’t happen overnight,” Mr. Aviles said Sunday in a telephone interview. “Four or five years down the road here, we have to be looking at a replay of what happened to the Catholic medical system.”
The current budget struggle not only pits the state against the city, it also pits the public hospital system, the main safety net for the poor, against the city’s private, nonprofit hospitals, many of which are also struggling under the burden of a large number of poor patients.
City officials said they had learned just last week that unless the Legislature stepped in, the governor’s budget would slash $370 million from the public hospitals, including $70 million in Medicaid reimbursements and a nearly 50 percent cut, or $300 million, in a federal program called Disproportionate Share Hospital payments, which subsidizes institutions with large numbers of indigent patients.
For many years, the hospital corporation received about $330 million annually in disproportionate share payments, Mr. Aviles said, but in each of the last two years the agency received an additional $300 million to help it care for the steep increase in uninsured patients. In the governor’s proposal, he said, the public hospital system would lose all of that $300 million increase unless the Legislature approved $187 million in cuts to the same program for private hospitals.
If the Legislature reduces payments to the private hospitals, he said, under the executive budget city hospitals would receive whatever disproportionate share money was left in the state’s allocation. He said state officials had told him that the balance would amount to $109 million.
At the same time, he said, the number of uninsured patients treated by city hospitals has increased 14 percent over the last four years, to nearly 453,000 from 396,000, with most of the increase coming as the city plunged into recession in 2007 and 2008. The public hospitals now provide almost half, or 48 percent, of all uncompensated clinic visits statewide, according to hospital corporation data.
State officials acknowledged the basic situation described by Mr. Aviles but said the reduction would be far smaller than he predicted.
They said a large part of the increase in disproportionate share money for the public hospitals had come from federal stimulus money, which had now run out. But they said that Mr. Paterson’s budget anticipated that the Legislature would cut disproportionate share money to private hospitals, and that if it did, all $187 million in savings would be shifted to the Health and Hospitals Corporation.
“We’re very attentive to the impact on H.H.C.,” John Ulberg, director of health care finance for the State Health Department, said Sunday.
Mr. Ulberg and Wendy Saunders, the governor’s deputy secretary for health, said that with their more optimistic projections, the cut to the public hospitals would total $31.5 million.
But Mr. Aviles said that only a small amount of the shortfall, about $30 million, involved stimulus money, and that the proposed cuts, if fully enacted, would significantly add to the budget deficit of nearly $1 billion that the public hospital system was already facing. He said the system, which has a budget of $6.5 billion, would be forced to consider layoffs, on top of 1,000 jobs lost through attrition over the last year, and reductions in some of its specialty programs, like bariatric, or weight-loss, surgery.
He said he hoped that New York City would soften the blow by continuing to provide its matching portion of the contested disproportionate share payments, which comes to $150 million, but he added, “Certainly that is not a foregone conclusion.”
Politics in the New York Region
A Cannabis Mess: Gov. Kathy Hochul has ordered officials to come up with a fix for the way New York licenses cannabis businesses amid widespread frustration over the plodding pace of the state’s legal cannabis rollout.
N.Y. Budget: Both of New York’s legislative chambers have announced their budget proposals. They have until April 1 to hash out a spending plan with Gov. Kathy Hochul, who unveiled her proposal in January.
Covid Deaths: Former Gov. Andrew Cuomo was subpoenaed to appear before a House subcommittee to answer for his administration’s handling of nursing homes during the pandemic, a development that could further damage his chances at a political comeback.
Redistricting: After rejecting a congressional map proposed by the state’s bipartisan redistricting commission and seizing control of the drawing process, Democrats adopted new district lines that would improve their chances of winning the House majority in November, but not drastically.
Long Odds: Republicans selected Mike Sapraicone, a former police detective who runs a security firm and positions himself as a moderate, as their preferred nominee in a long-shot bid to unseat Senator Kirsten Gillibrand of New York.
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