New York City Health & Hospitals reported Thursday that its financial transformation plan is working.
At the end of fiscal year 2019, H&H closed 65% of its $1.8 billion structural budget gap, the health system said.
"Financial stability is a critical part of our transformation plan and our fiscal year end shows that we are on the right track – we are achieving our goals and exceeding our budget expectations," NYC Health & Hospitals' President and CEO Dr. Mitchell Katz said in a release.
More than $500 million in net new recurring revenue and about $400 million in structural expense reduction led to closing part of the gap, said Matthew Siegler, senior vice president for managed care and patient growth at H&H.
That included $216 million against a target of $190 million in revenue cycle initiatives, up from $150 million last year, Siegler said. The health system has focused on signing up the uninsured for coverage – increasing the number of insurance applications in its clinics by 20% – as well as improving its contracting with managed care plans to raise its rates and reduce the number of denials it receives.
Additionally, H&H clocked more than $120 million in revenue through initiatives with the state's Delivery System Reform Incentive Payment, or DSRIP, program, which rewards health care providers for hitting key quality measures, he said.
H&H closed fiscal year 2019 with a $36 million net positive margin: Total revenue of more than $7.51 billion exceeded total expenses of nearly $7.48 billion.
Patient care revenue was $30 million higher than fiscal year 2018, reaching $3.86 billion. Expenses closed at $24 million better than budget, with targeted staffing investments made in nursing and other areas.
Cash on hand at the end of fiscal year 2019 was $776 million, the health system's highest closing cash balance in five years.
Though H&H is concerned with federal uncertainty surrounding Medicaid disproportionate share hospital, or DSH, payments that support safety net institutions such as itself, it's optimistic that payments will be extended, Siegler said.
"Health + Hospitals closes more than half of its $1.8B budget gap" was originally published in Crain's New York Business.