Health and Hospitals Corp., prepares to slash 10 percent of its workforce

The combination of a $1 billion budget deficit and constant cuts to statewide healthcare subsidies has New York-based Health and Hospitals Corp. (HHC), the largest public hospital system in the country, bracing to slash 3,900 positions--roughly 10 percent of its workforce.

In 2011 alone, HHC's budget gap is expected to grow by 86 percent to a staggering $1.5 billion, according to the Wall Street Journal. A good portion is due to uncompensated care. HHC is the largest provider of uncompensated care in New York City, having served more than 450,000 uninsured patients in 2009, notes a report from the city's Independent Budget Office released today. Those uninsured patients cost HHC an estimated $492 million. 

Add to that Gov. David Paterson's plans to cut more than $1 billion in healthcare subsidies throughout the state--$250 million of which would have gone to hospitals--and the fact that employee pensions have increased by more than $280 million since 2004, and it's easy to see the conundrum facing HHC. Health insurance costs for the system's employees also have doubled to $190 since 2004. 

"No hospital in the country is exempt from the crushing economics facing the healthcare industry," New York Mayor Michael Bloomberg told the Journal.

Alan Aviles, HHC's president, added that because 70 percent of the system's budget comprises personnel costs, lowering expenses "will simply not be possible" unless jobs are cut. 

To learn more about HHC's plight:
- read this Wall Street Journal article
- here's the report from New York City's Independent Budget Office (jump to p. 48)
- read this review of HHC's financial challenges outlined by Aviles