Public hospitals face budget shortfall

Public hospitals face budget shortfall
By Patrick Donachie

New York City’s hospitals are facing a potential multibillion-dollar shortfall in the coming few years, according to a new report from the New York City Independent Budget Office.
Although Mayor Bill de Blasio’s administration has developed a “transformation plan” in concert with the New York City Health + Hospitals public system, it is uncertain that the proposals will stave off the projected deficit. The report called it the “steepest fiscal challenge” the hospital system had faced in memory.

“Declining revenues — due to factors ranging from a decrease in inpatient care to challenges propelled by the Affordable Care Act — coupled with rising expenses leave the hospital system with a projected cash shortfall of $6.1 billion over the 2016-2020 period,” the report said.

The system operates 11 hospitals throughout the city, including Elmhurst Hospital Center and Queens Hospital Center in Jamaica. The city has increased the financial support to NYC Health + Hospitals in fiscal year 2016 with a $2.4 billion investment. Though the city’s budget projects investments total more than $2 billion for the public hospital system in each of the next four years, the hospital system is still projecting a deficit.

Additionally, the city often pays the public hospital system for supplemental Medicaid, which is offered to health care facilities that provide care to higher rates of Medicaid or uninsured patients. A full 45 percent of NYC Health + Hospital visits are from Medicaid enrollees and 25 percent are visits from the uninsured. In contrast, 24 percent of the city’s adult population is enrolled in Medicaid and 14 percent is uninsured.

The public hospital system intends to improve revenue by boosting outpatient services and pushing for greater reimbursement for Medicaid or uninsured patients. H+H also intends to decrease costs in order to bring the shortfall under control.

“Although the mayor has explicitly precluded closing entire hospitals, dismissing staff or privatizing services,” the report said, “H+H has already begun reducing staff through attrition and plans to further reduce personnel and other maintenance expenses by downsizing inpatient or other underused services.”

Despite internal reforms, the report noted that 52 percent of the anticipated fiscal appropriations would come from state or federal sources. About $1.4 billion of this relief has already been approved, but the remainder still awaits agreement between state and federal agencies and the hospital system. The report also specifies that the system must quickly devise a way to downsize inpatient care while expanding outpatient care to boost revenue and cut expenses.

Reach reporter Patrick Donachie by e-mail at pdonachie@cnglocal.com or by phone at (718) 260–4573.