Analysis: New York misspends $1.1B in charity care with 'reverse Robin Hood effect'

Though New York's $1.1 billion Indigent Care Pool was created to reimburse hospitals that provide charity care, recent analysis from the Albany, N.Y.-based Empire Center has found a negative correlation between the poverty level of a hospital's patients and the ICP funding the hospital receives.

The analysis found that the ICP, which was created under New York's 1996 Health Care Reform Act, has undergone a number of modifications that have shifted $100 million from high-need institutions to ones of lower need. Only 48 percent of the 180 hospitals funded received grants based entirely on need, while the remaining 52 percent of hospitals received funding based on past funding levels rather than current charity care costs.

Four hospitals, including New York-based Memorial Sloan Kettering Cancer Center, received charity care grants despite sustaining no net loss from charity care. Memorial Sloan Kettering received nearly $12 million in 2016. This is partially due to the fact that part of the program's funding algorithm does not differentiate between patients who pay with cash and those patients who don't pay at all.

"The limited public resources available for hospitals that provide free care to the poor should be distributed in a fair and rational way, and that's not happening now," said Bill Hammond, health policy director at the Empire Center. "Money in the Indigent Care Pool should be following patients, not politics."

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