Public hospitals in NYC face massive budget deficits

New York City's public hospitals face a deficit topping $400 million for the 2015 fiscal year and could easily surpass $1 billion by 2018, Capital New York reported.

The New York City Health and Hospitals Corp. projects a $430 million budget deficit for fiscal 2015. The gap will likely reach $1.4 billion by 2018.

The system of 11 hospitals provides $700 million in uncompensated care each year, primarily because eight out of 10 patients it treats either lack insurance or are enrolled in Medicaid, according to Capital New York.

Moreover, the system wants to repair infrastructure damage due to Hurricane Sandy, and has ever-escalating pension and other labor costs for its employees. Only 20 HHC employees netted more than $2 million in overtime payments during the 2013 fiscal year, due in part to time-and-a-half or double-time payments they received preparing for Sandy.

Indeed, the deficit could grow by another $350 million if two labor unions that represent hospital employees receive backpay as part of a dispute with the HHC that is currently in arbitration.

"HHC is facing a fiscal crisis," Corey Johnson, who chairs the HHC's health committee, told Capital New York. 

Many New York City City acute care facilities are under financial duress, including a cluster of hospitals in Brooklyn. That has prompted the state to look at a variety of changes in laws governing hospital management, including the ability to fire managers at private facilities if they jeopardize patient care, or to allow for-profit hospital operators within New York State under certain circumstances.

The HHC conducts a variety of cost-saving measures, including turning over its renal care services to a private operator--a move projected to save $150 million over the next nine years but has come under criticism because mortality rates at for-profit dialysis centers tend to be higher than when public or non-profit ventures operate them.

To learn more:
- read the Capital New York article