Greater NY hospital association: Wealthier hospitals should bail out struggling institutions

One of the most influential regional hospital lobbies in the country is suggesting that its richer members "adopt" hospitals that are on the brink of financial insolvency.

That proposal, made by the Greater New York Hospital Association, does come with a small catch--the state of New York should sweeten the deal by kicking in $2.5 billion, according to a New York Observer opinion piece.

Why should the state pony up so much money? Because many New York City safety-net hospitals in the outer boroughs are on the financial precipice, and could leave large portions of the Big Apple without a safety-net provider.

The hospitals at risk, the article noted, include Kingsbrook Jewish Medical Center, Brookdale University Hospital, Interfaith Medical Center, and Wykoff Heights Medical Center in Brooklyn and St. John's Episcopal Hospital in Queens. State regulators have put all of these hospitals on their "watch list." Each of them has a mere 15 days of cash on hand.

Hospitals in the New York area are already suffering from other collateral issues. The recent collapse of the Health Republic Insurance co-op has left them holding the bag on about $200 million worth of bills. And less recently, the city's hospitals had to brace for cuts in Medicaid reimbursement. In 2010, the venerable St. Vincent's Medical Center in Lower Manhattan closed its doors.

Although the Observer supported some sort of bailout by the more powerful private hospitals of their safety-net brethren, it concluded it should only do so if it makes financial sense and not at the behest of the state government.

To learn more:
- read the opinion piece