The nation's largest public hospital system is in dire financial shape and needs to restructure its finances, Bloomberg News reported.
New York City's Health and Hospitals Corp. (HHC) is projected to lose more than $1 billion during its current fiscal year, which ends on June 30, and finish up with $104 million of cash on hand. That sounds like a significant amount, except it would only fund the massive hospital system's operations for six days--far below the margin of safety for most privately operated hospitals and healthcare systems.
"It's time for them to sit down and see how to restructure the operation," Ken Bleiwas, deputy comptroller for the state of New York, told Bloomberg. "It's not sustainable."
HHC appointed a new chief executive officer in 2014, Ram Raju, M.D. The orthopedic surgeon said at that time that he was looking to amp up the system's fiscal savvy and improve on the collections from payers.
The system had also been troubled by employees apparently gaming the overtime system. In fiscal 2013, 20 employees earned nearly $2 million in overtime, with one clerical employee logging 2,500 hours of overtime. And despite a plan in place to cut 1,000 jobs in order to save money, HHC's payroll increased by more than 900 instead.
About 80 percent of HHC's patients are either enrolled in Medicaid or are uninsured. Although New York State expanded Medicaid eligibility under the Affordable Care Act, cuts in Disproportionate Share Hospital payments are expected to rise from $180 million in fiscal year 2017 to more than $508 million in fiscal 2018. Partly as a result, deficits for the system will likely grow to $2 billion by fiscal 2019, according to Bloomberg.
Last year, Raju unveiled a low-cost health plan intended to bring more paying patients into the HHC system. Not only is enrollment way below original projections, nearly 90 percent of the enrollees are Medicaid patients, according to Bloomberg.
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