'Safety net' hospitals join forces to raise voice in Albany. Here's what they want to do.

'Safety net' hospitals join forces to raise voice in Albany. Here's what they want to do.

POLITICO

Shannon Young

Several New York City “safety net” hospitals have combined forces to enhance their lobbying power in Albany as they seek a boost in state funding and larger structural overhauls to help secure their long-term survival.

The newly formed New York Safety Net Hospital Coalition, which represents nine facilities that serve a large percentage of Medicaid patients in low-income and minority communities, is pressing Gov. Kathy Hochul and state lawmakers to address the “longstanding structural inequities” in how they are paid.

They are also advocating for the state to put aside funding for overdue building repairs, equipment purchases and other capital investments.

Failure to do so, the coalition warns, could lead some of the hospitals to close their doors and put others on the brink of collapse — further exacerbating the longstanding health inequities in communities hit hardest by the Covid pandemic.

“We came together because we wanted to collectively make the case that the two-tier system of health care that exists in the state of New York has to stop,” said Ramon Rodriguez, the president and CEO of Wyckoff Heights Medical Center. “We built the coalition to have a voice. And people who are on the coalition are committed to serving the communities they’re in and essentially saying, ‘You have to have local health care access.’”

The coalition includes St. Barnabas Hospital, Brooklyn Hospital Center, Brookdale Hospital Medical Center, Interfaith Medical Center, Maimonides Medical Center, Jamaica Hospital Medical Center, Flushing Hospital Medical Center, St. John’s Episcopal and Wyckoff Heights Medical Center.

What the new group wants

The group lauded Hochul for including measures in her budget for the fiscal year that starts April 1 to help safety nets, such as the proposed $2.8 billion in payments to support “urgent operating needs.”

But members have argued the governor’s budget proposals — including the payments which would be doled out over four years (or $700 million annually spread across 18 hospitals with Medicaid volumes at 36 percent or greater in their patient mix) — do not go far enough.

The coalition has estimated that more than $1.5 billion is needed across the nine member hospitals in the coming fiscal year to move them away from “crisis cash-management” — or about $1.4 billion after the $128 million in projected "Disproportionate Share Hospital" payments they’re slated to receive.

But even with the state’s expected allocation of $987.6 million for coalition hospitals — and members advocating for $125 million in additional "Vital Access Provider Assurance Program" funds — the coalition estimated that a nearly $300 million budget gap would remain for the nine facilities to achieve a 1.7 percent operating margin, the average in New York.

As such, a coalition spokesperson told POLITICO, it is requesting that the state allocate an additional $292.2 million for member facilities.

“We’re grateful that there is some incremental increase in the funding from what we have been receiving, but it’s not enough,” said LaRay Brown, the CEO of One Brooklyn Health, which comprises Brookdale Hospital Medical Center and Interfaith Medical Center, among other facilities.

“It’s not enough for us to get beyond paying some vendors this week and others next week; it’s not enough to get us beyond just making payroll and maybe having less than a handful of days’ cash.”

There was no immediate comment from the governor's office on the group's requests.

Seeking further reforms

Beyond a cash influx, the coalition hopes to work with lawmakers, unions and others on a budget proposal next year to overhaul the safety net’s funding structure, including the Medicaid reimbursement rate — which currently pays about 67 cents on the dollar for hospital care in New York.

 The nine coalition hospitals serve 45 percent or more Medicaid and uninsured patients. That payer mix, members argued, puts their facilities at an operating loss for nearly all services and makes it hard to invest in things like equipment — a problem not equally felt by hospitals that serve mostly patients with private health insurance.

The coalition noted that the average commercial rates in Manhattan and New York City, “as a whole, are up to seven times higher than the average commercial and Medicaid managed care rates received by [its member] hospitals.”

The nine hospitals have asked state lawmakers to commit to “structural reimbursement reform,” by increasing Medicaid rates so they better reflect the cost of care — not just restoring cuts implemented in recent years, as proposed in the executive budget. The current rate, they’ve argued, has remained stagnant for more than a decade and applies to all providers regardless of their financial position or payer source.

The coalition, however, has lauded the executive budget’s proposed $1.6 billion to finance capital improvements for financially distressed hospitals and other health care providers, calling it “essential to reverse the current two-tier health system.”

“There’s only so much you can do if you’re not sure what your future is going to be,” said David Perlstein, the president and CEO of the Bronx-based SBH Health System, which operates St. Barnabas. “If I get fully funded, and I know I’m going to be fully funded for the next five years, I can plan, I can build, I can even borrow money."

Rodriguez, who said he’s spent decades working in or around New York’s state government, said Hochul is the first governor in his memory to specifically mention safety net hospitals in her budget priorities. He said he’s “optimistic mostly because of the governor.”

Brown agreed that between the state’s current financial situation, new leadership and focus on health inequities — a key priority for Health Commissioner Mary Bassett — the “ingredients are there for us as a coalition to have some success.”

“I think we’re close,” Perlstein added. “I am cautiously optimistic, and maybe a little more. But this is the first step: to make sure there’s equity. And the next step is to make sure that equity is carried on for eternity.”