Plan proposed to pay NY's big systems $2.5B to bail out Brooklyn hospitals

Financially troubled hospitals in Brooklyn, N.Y., have received millions of dollars in support from the state, including $325 million in 2015. At a recent state budget hearing, Kenneth Raske, president of the Greater New York Hospital Association, made a proposal to help the distressed hospitals survive.

There are 28 Brooklyn hospitals that would likely close without their safety-net status, government subsidies and political pressure, according to a "watch list" issued by the state Department of Health. These facilities are also undesirable from the view of would-be acquirers, making it unlikely they will join forces with a larger system to remain viable, according to Crain's New York Business.

To solve the issues plaguing these struggling hospitals, Mr. Raske proposed the state pay the wealthiest hospital systems $2.5 billion over five years to "adopt and adapt these facilities to the new world," according to the report.

Some large health systems, including New York City-based Mount Sinai Health System and Great Neck, N.Y.-based Northwell Health, want to expand their presence in Brooklyn, making Mr. Raske's plan popular among the hospitals in desperate need of the financial help.  

"Places like central Brooklyn that don't have the more attractive payer mix are in a position where it's more of a challenge to get a larger system interested," said Linda Brady, MD, president and CEO of Kingsbrook Jewish Medical Center in Brooklyn. "This is exactly why the governor put this in his budget proposal, and it's why Ken Raske is advocating for this." In the fiscal year that begins April 1, New York Gov. Andrew Cuomo recommends an additional $450 million for the 28 struggling hospitals.

However, Mr. Raske's plan has already received criticism. A spokeswoman for the New York Health Plan Association told Crain's, "We certainly object to allocating healthcare dollars — which are stretched thin to begin with — to already profitable hospitals that are looking to strengthen market power through consolidation."

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