Efforts to rein in costs in New York City's public hospital system have done nothing to slow its precipitous financial losses, which topped $420 million in the first six months of fiscal 2016, which began last July. Losses ballooned to more than seven times their size compared with the same period the previous year, according to unaudited financial statements posted online Monday.
At this point, the $337 million emergency boost Mayor Bill de Blasio announced in January may not be enough to keep the ailing health system going, State Comptroller Thomas DiNapoli wrote in a report on the city's financial plan released Monday. The mayor's office has decided to step in and create a new restructuring plan for NYC Health + Hospitals, due out in the spring. It may need to include an even greater financial commitment from the city, the comptroller said.
The administration has told NYC Health + Hospitals the new plan will closely align with its Vision 2020 agenda, which was announced last year, a spokesman for the health system said in a statement. Vision 2020 set a number of projects in motion, including an extensive expansion of outpatient services and a mission to enroll 1 million New Yorkers in the network's MetroPlus Health Plan by 2020.
DiNapoli attributed the health system's dire financial straits primarily to outside forces, including a high proportion of uninsured patients, more health care providers competing for Medicaid patients and reduced federal funding. But he also cited high overhead costs in the network and reissued his call for NYC Health + Hospitals to create a more realistic financial outlook than the one it released last June.
Medicaid payments are less than the hospital system had projected, and cost-containing initiatives it anticipated would generate $309 million each year beginning in fiscal 2016 are missing their targets, the comptroller said. Instead of reducing staff, which was expected to generate a third of those savings, the network has hired more people.
However, the comptroller noted that NYC Health + Hospitals is taking steps to remedy that situation. It recently formed a committee to better manage personnel decisions, which is starting to get results.
NYC Health + Hospitals' financials show its operating expenses rose by 5.9%, to nearly $4.5 billion, in the six months ended in December 2015, while operating revenues dropped by 2.7%, to $4.1 billion.
After paying the city back for medical malpractice and debt service costs owed from fiscal 2015, NYC Health + Hospitals projected that it will close fiscal 2016 with a cash balance of $104 million, enough to meet its obligations for only six days.
"NYC Health + Hospitals is the largest provider of uninsured care in the city. We are working with the city, state and federal governments to ensure that we are adequately compensated for that care," a spokesman for the health system said in a statement.
"Ailing public hospital system may need another resuscitation, comptroller says" originally appeared in Crain's New York Business.