New York Public Hospital Facing a $1 Billion Loss

New York City public hospitals demonstrate difficulties of staying afloat.  That fact that New York City’s public hospitals could lose $1 billion illustrates the difficulty that healthcare systems face in their efforts to stay afloat.  New York City Health and Hospitals Corporation has projected a billion dollar loss through June 30, 2011, despite an expected infusion of “hundreds of millions of dollars” in retroactive Medicaid payments.

The Medicaid payout, as well as cost-cutting efforts and improvements to efficiency will help the 12-hospital system achieve an operating gain as of June 30.  Operations, however, will “burn through that at a pretty torrid rate,” notes system president Alan Aviles.  The growing demand for subsidized and free care during the recession, as well as cuts to Medicaid – which covers approximately two-thirds of the system’s patients – makes balancing the budget problematical.

New York’s public hospitals saw the number of uninsured patients grow by 4,000 in 2009, 36,000 in 2008 and 17,000 in 2007.  According to Aviles, the growth among the uninsured is leveling, but his system has limited capacity to accept new patients.  The $1 billion doesn’t include approximately $70 million in payment cuts and tax increases contained in the New York state budget for the fiscal year that begins in April.  The gloomy forecast assumes a $300 million cut to the system’s disproportionate-share payments, which are financial assistance given to hospitals that serve low-income patients.  Aviles is lobbying New York legislators to reinstate these by prioritizing such spending in the public health system’s favor.

“This highlights that as this economic downturn continues, that public hospitals and other safety net systems that serve a great number of Medicaid and uninsured patients are going to be increasingly reliant on disproportionate-share payments to keep their systems afloat and solvent,” Aviles said.

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