The New York City Health and Hospitals Corporation (HHC), the largest municipal hospital and health care system in the country, has announced layoffs and service cutbacks as it scrambles to address a budget shortfall numbering in the hundreds of millions.
The public benefit corporation, which serves 1.3 million New Yorkers – 450,000 of whom are uninsured – unveiled a gap-closing plan March 19, aimed at addressing the financial challenges posed by its $316 million budget deficit. The shortfall, HHC says, was brought on by $66 million in State Medicaid reimbursement cuts; $160 million in increased labor and inflation costs; $75 million in affiliation contracts and other non-staff inflation costs; and $15 million worth of declines in interest earnings and city tax levy funding.
As a result, HHC will trim $105 million from its 2010 fiscal year budget. The corporation says it will save $78 million through “operating efficiencies” such as improved revenue collection, and another $27 million by creating 400 vacancies through service cuts, layoffs, a hiring freeze and attrition.
HHC will close 16 health programs and centers across the city, including community clinics at Sunnyside Medical Center and Springfield Medical Center as well as a satellite pharmacy at the Charles R. Drew Center in Jamaica. The Queens locations serve more than 5,000 people.
The layoffs and service cutbacks directly affect labor groups like District Council 37 – the city’s largest public employee union – which says it is “very concerned” about the HCC plan and “will address this issue aggressively.”
In a statement, DC 37 said the “service and workforce reductions are not in keeping with the spirit of the $10 billion that New York State has received from President Obama’s stimulus package for the Medicaid program and the health care safety net.”
The union added that layoffs are the last thing the state and city needs during an economic recession.
However, HHC stressed in a statement that the necessary service reductions focus on programs that have been disproportionately under-funded and would thus have a minimal impact on patients. The corporation said it would re-direct patients to other locations.
As far as future cuts are concerned, HHC placed the onus on Albany.
“Additional reductions, including more service cuts and layoffs, are imminent in order to deal with our current operating revenue shortfall,” said HHC President Alan Aviles. “However, the outcome of the State budget negotiations in Albany will ultimately determine the magnitude of any future cuts.”
