Experts question de Blasio's plan to save NYC's public hospital system

Mayor Bill de Blasio’s proposed executive budget throws a $2 billion lifeline to New York City’s financially strapped municipal hospital system, a $700 million increase in baseline spending over last year.

“Our plan does not require the closing of hospital facilities,” de Blasio said in his budget presentation. “And we are not laying off health care workers.”

However, reaction to de Blasio’s long awaited strategy to save NYC Health + Hospitals, the municipal hospital system formerly known as Health and Hospitals Corporation, was decidedly mixed.

Henry Garrido, the executive director of District Council 37, the city’s largest municipal union, noted that the plan does not entail “facility closures and lay-offs and does not penalize the hardworking men and women who help provide a safety net of care to tens of thousands of New Yorkers.”

“We believe that the system is long overdue for the comprehensive re-training that is necessary to ease the transition of some facilities from hospitals to primary care,” Garrido continued, “and expect to work closely with Health + Hospitals to ensure this happens smoothly and effectively.”

The mayor also committed to continue to lobby for an increase in financial support for the public hospital system, the largest in the nation, from the state and federal governments. Under his proposal, the city will also invest $100 million in capital funds to help the system upgrade its clinic and outpatient facilities.

For a number of longtime observers and stakeholders, the plan’s reliance on getting both Albany and Washington to re-visit funding levels and formulas for funding the city’s public hospitals was somewhere between overly optimistic and magical thinking.

In a joint statement, New York City Council Speaker Melissa Mark Viverito and Council Finance Chairwoman Julissa Ferreras-Copeland expressed concern that plan to close the operating gap “is contingent on substantial State and Federal cooperation which has not yet been assured.”

Erin Kelly, a health budget and policy analyst with the New York City Independent Budget Office, echoed the concerns about looking elsewhere for help.

“The fate of this plan relies heavily on counting on Albany and Washington to step up and close the out-year gaps,” Kelly said. “You would also want to see more detail on how they are going to re-position the system, which means re-training and reconfiguring existing facilities from the inpatient model to the outpatient model.”  

Charles Brecher, the research director for the Citizens Budget Commission, the non-partisan fiscal watchdog, called the proposal “disappointing.”

“Transforming this system can’t be done without making painful choices,” he said. “They are essentially saying the same thing they’ve been saying for awhile now: ‘We have a plan and we are sticking with it,’ even though it hasn’t been working.”

During de Blasio’s budget presentation on Tuesday, he said that NYC Health + Hospitals would push for greater “quality and efficiency” and to use the system’s “buying power to reduce the cost of supplies.” The idea of selling off and re-purposing some of the municipal hospitals real estate was also floated, although no specifics properties were identified.

For Anthony Feliciano, director of the Commission on the Public Health System, a non-profit that promotes the participation of the community and labor unions in setting public health policy, the notion the city might sell-off real estate that belongs to NYC Health + Hospitals  requires closer scrutiny.

“We mapped out all of the sites going back to 1968 where hospitals were closed and they were all located in communities of color,” Feliciano said. “Fifty percent of that land is vacant, and almost 50 percent is now luxury housing, and in a couple of isolated cases something like a school was built.” 

Feliciano argued that the local community should be part of such decision making. “All this money finds its way to consultants,” he said, “and zero goes to the community-based groups that already know what’s needed in these neighborhoods to improve public health. ”

Much of what de Blasio surfaced in his proposal was in line with a turn around strategy offered by Dr. Ram Raju, who de Blasio hired in 2014 as CEO of Health + Hospitals. Raju has emphasized the need for the city to pivot from a hospital-centric fee-for-service system to a 21st century community-based and preventive primary and outpatient care model that focuses on wellness.   

“We are implementing long-term sustainable solutions, rather than a Band-Aid fix, to stabilize hospital finances and save our public health care system,” de Blasio said.  

The “unprecedented” infusion of additional financial city support, NYC Health + Hospitals is aimed at reducing an annual budget shortfall expected grow to $1.8 billion by 2020, a 300 percent spike from its current gap. Hospital admissions continue to decline overall and a rapidly consolidating market has hospitals in a fierce competition for paying patients.

Historically, the city’s public hospitals have maintained a longstanding commitment to provide care to all New Yorkers, regardless of their ability to pay or their immigration status. But experts say keeping that commitment has been made far more challenging with the passage of the Affordable Health Care Act in 2010.

While ACA did reduce the number of uninsured, both around the country, and here in New York City, it expressly prohibited undocumented immigrants,  a major portion of the city’s municipal hospital patient base, from getting covered under Obamacare. ACA also cut significantly how much the federal government would pay in the future to support hospital systems, like New York City’s, that continued to see a higher percentage of uninsured  patients.

In May of last year, City Comptroller Scott Stringer flagged this problematic confluence  in a report entitled “Holes in the Safety Net: Obamacare and the Future of NY City’s Health and Hospitals Corporation.”

Earlier this month, the City’s Independent Budget Office released a study that found that after the full implementation of ACA, the percentage of City residents without health care coverage dropped from close to 21 percent in 2013 to down to almost 14 percent in 2014. Yet IBO’s review shows that as of last year, still more than 1 in 4 of the patients using the municipal hospital system outpatient and diagnostic facilities were still uninsured.

Last year a mayoral task force looking at ways to improve immigrant access to health care, reported that some 350,000 undocumented city residents were without health care insurance. Advocates say for this population, the city’s public hospital system is a vital lifeline.   

The mayor will be advised about how best to follow-up on implementation of his strategy by a blue-ribbon panel chaired by First Deputy Mayor Anthony Shorris, Deputy Mayor Dr. Herminia Palacio and Raju.

The mayor and the City Council have until the end of June to reach a budget deal.