New York safety nets 'strapped for cash': 2 health system CEOs speak out

The CEOs of two safety-net health systems in New York have spoken out about the effects of low Medicaid reimbursement rates. They called upon the state's capital to take action in a Dec. 8 opinion piece for City & State

David Perlstein, MD, president and CEO of New York City-based SBH Health System, and Ramon Rodriguez, president and CEO of New York City-based Wyckoff Heights Medical Center, wrote the piece. 

The authors began by listing current challenges in the healthcare industry: the "tridemic" and workforce shortages. These issues are "particularly acute" for the state's safety-net hospitals and "Albany must act now to ensure these hospitals and the communities they serve are not left behind," they argued. 

Safety-net hospitals primarily care for marginalized communities, the authors wrote. Since so many of these patients are covered by Medicaid — and Medicaid only reimburses hospitals 61 cents for every $1 spent on patient care — safety-net hospitals often see low or negative operating margins, according to the authors. The state has not increased Medicaid rates since 2008, causing reimbursement to stall while care costs keep rising.

Since safety nets do not see a large number of wealthier, privately insured patients, the losses are difficult to offset, making it hard to build capital to address short-term needs, the authors wrote. They may be unable to buy COVID-19 supplies, invest in preventive programs and address aging infrastructure. 

"For far too long, this inadequate reimbursement structure has left safety net hospitals strapped for cash," the authors wrote. "We often find ourselves needing to choose between investing in the latest technology needed to equitably care for our patients and updating our units to reflect our commitment to and respect for our patients." 

Dr. Perlstein and Mr. Rodriguez called upon state legislators to modernize Medicaid reimbursement rates in the upcoming budget season. 

"If long-term investments are not made, the health of many New Yorkers will hang in the balance," they wrote. "Gov. Hochul, the time is now to make your mark."

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