New York City Health + Hospitals can cut its deficit by up to $1.8 billion annually if it can bring its revenue and expenses in line with other safety net hospitals, according to a Citizens Budget Commission report released Dec. 16.
The report found that NYC Health + Hospital's financial performance lagged other counterparts that also take care of a large proportion of Medicaid patients.
In particular in fiscal years 2015 through 2017, NYC Health and Hospitals had an average operating deficit of nearly $3 billion, or 46 percent of its operating expenses. This compares to other safety net facilities with deficits that average 15 percent of their operating expenses.
The commission also found that most safety net hospitals recovered 77 percent of associated patient care costs from Medicaid insurers, while NYC Health + Hospitals recovered just 53 percent. NYC Health + Hospitals recovered 42 percent from commercial insurers, compared to 90 percent for other safety net insurers.
To cut its deficit, the commission recommended that NYC Health + Hospitals develop an approach to financial planning and budgeting that uses benchmarking. The commission also advised that the system push for changes to how the state distributes money to safety net facilities.
"H+H is on the right track. It is starting to increase revenue recovery and control spending. But it should be able to do more, like its counterparts," said Andrew Rein, president of the commission. "Its subsidy should not be set based on whatever results happen to be achieved. Benchmarking H+H to safety net hospitals sets the right bar to improve financial performance and stabilize and reduce the need for city subsidy."
The Citizens Budget Commission is a nonprofit, nonpartisan organization that provides recommendations to improve the finances for New York City and the state of New York.
To access the full report, click here.
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