Will New York's Medicaid revamp lead to hospital closures?

As New York begins an ambitious plan to remake its Medicaid program, some hospitals throughout the state may close their doors, although few will likely go without a fight.

It recently obtained a Medicaid waiver from the Centers for Medicare & Medicaid Services, and aims to cut unnecessary hospital readmissions by at least 25 percent, according to Crain's New York Business.

That means overall hospital admissions statewide may fall by as much as 5 percent in the coming years. The state's acute care facilities are being offered an additional $8 billion in Medicaid funding ($6.4 billion in the Greater New York City area) if they meet some complex performance guidelines. Hospitals have to submit their applications to participate in the streamlining by the end of the year.

State officials hope that the Empire State's hospitals may collaborate to decide which facilities may eventually close, but there appears to be a reluctance among many to step forward.

"We have been talking forever about the need to move away from the acute care system," said Stephen Berger, chairman of Odyssey Investment Partners, told Crain's New York Business. "But no one has offered their institution up for closing."

Moreover, hospitals are under pressure from unions that represent large numbers of their employees. "(We) will fight the wholesale closing of hospitals without a plan to provide comparable jobs," Kevin Finnegan, political director for 1199 SEIU Healthcare Workers East, which represents 275,000 healthcare workers in the state, told Crain's New York Business.

Representatives from the Greater New York Hospital Association said that streamlining is certain, but whether facilities close remains to be seen.

Meanwhile, hospitals in the upstate cities appear willing to use medical homes and similar strategies to cut Medicaid readmissions, but there is no talk of any facilities closing.

For more:
- read the Crain's New York Business article

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