New York City Health and Hospitals Corp. has projected an operating loss of at least $1 billion through June 30, 2011, despite an expected infusion of “hundreds of millions of dollars” of retroactive Medicaid payments.
N.Y. public hospitals could lose $1 billion through 2011
The one-time Medicaid payout, plus ongoing efforts to cut costs and improve efficiency, will help the 12-hospital system close its books this June with an operating gain, said system President Alan Aviles, but operations will “burn through that at a pretty torrid rate.” Aviles said growing demand for subsidized and free care during the recession and cuts to Medicaid, which covers roughly two-thirds of the system's patients, has left it struggling to balance its budget. The amount of the Medicaid payout, for three years of so-called upper payment limit funds, has not yet been finalized by the CMS, but is expected to be “hundreds of millions of dollars,” he said.
The system saw the number of uninsured patients increase by 4,000 in 2009, 36,000 in 2008 and 17,000 in 2007. Aviles said the system has seen the growth among its uninsured begin to level and said the system has limited capacity to accept additional patients.
Aviles said the system will seek to curb the projected 2011 loss with further cost-cutting, which has already trimmed 1,000 full-time positions from the system's payrolls. The system reported an operating loss of $525.5 million on operating revenue of $6 billion for fiscal 2009, the most recent audited figures publicly available.
The $1 billion does not include an estimated $70 million in payment cuts and tax increases under New York Gov. David Paterson's proposed budget for the state fiscal year that begins April 1. However, the grim projection does assume a $300 million cut to the system's disproportionate-share payments, which Aviles said he is lobbying state lawmakers to restore through prioritizing such spending to favor the public health system.
“This highlights that particularly as this economic downturn continues, that public hospitals and other safety net systems that serve a great number of Medicaid patients and uninsured patients are going to be increasingly reliant on disproportionate-share payments to keep their systems afloat and solvent.”
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