Need/forgot a password?

Governor Hammers Health Care Providers With $2.5 Billion in Cuts and Taxes

Bookmark and Share

HANYS’ preliminary estimates show that the total impact of the Governor’s proposed 2009-2010 state budget cuts on hospitals, nursing homes, and home care providers is more than $2.5 billion for the 15-month period January 1, 2009 through March 31, 2010. The $2.5 billion figure includes the loss of Medicaid managed care funds and the federal share of Medicaid dollars. It includes more than $1.3 billion in cuts and taxes for hospitals, $850 million in cuts for nursing homes, and $360 million in cuts and taxes for home care.

Cuts and taxes of this magnitude would force providers to curtail medical services and/or lay off staff, jeopardizing access to care for all New Yorkers.

The proposed budget does not address needed reform in the areas of managed care, medical liability, clinical integration, regulatory oversight, or transitional care.

HANYS’ President Daniel Sisto issued a statement that decried the Governor’s disproportionate focus on cutting the health care sector.

“Coming into this budget season, health care providers understood that some reasonable and equitable sacrifice on our part would be necessary, given the current fiscal crisis,” commented Mr. Sisto. “However, the staggering magnitude of the cuts and health care taxes the Governor has proposed goes far beyond reasonable and equitable. Every area of health care is being pummeled, from hospitals and physicians to nursing homes and home health care providers. Yet, each of these providers will face even more patients and residents who need care as the economy continues to weaken and our state’s population continues to age.”

“Following two previous rounds of health care cuts in April and August that combined to reduce funding for health care services by well over $1 billion, these new cuts and taxes will effectively cripple the health care system, jeopardizing life-saving care for millions of vulnerable New Yorkers, especially the elderly, disabled, and very young, who most rely on Medicaid to access essential services,” added Mr. Sisto.

New York State leaders and health care providers are advocating for an increase in federal Medicaid matching funds (see related story below). Known as the Federal Medical Assistance Percentage (FMAP), these matching funds are intended to help states provide Medicaid services to people who need them.

“We must succeed in obtaining an FMAP increase with the help of the our Congressional Delegation. When we do, the additional funds must be dedicated to Medicaid as intended and used to restore the proposed Medicaid cuts,” asserted Mr. Sisto. “As the former Spitzer and current Paterson Administrations have insisted, Medicaid funds must be used for Medicaid purposes. That principle must apply here as well. Increased Medicaid funds from Washington need to be dedicated to Medicaid.”

HANYS strongly disagrees with Department of Health (DOH) assertions that New York’s hospitals and health systems are in good financial shape and can absorb cuts of this magnitude. DOH’s assessment is based on 2007 financial data. A recent HANYS survey of members indicates that hospital bottom lines have dipped to minus 1%.

“The world has changed since 2007 ended,” said Mr. Sisto. “Hospitals, nursing homes, and home care providers have absorbed massive damage to their balance sheets and operating statements as a consequence of the national economy. They have been battered by the implosion of the credit and financial markets and the attendant impact on pension and health benefits for retirees, the evaporation of philanthrophy, and the shrinking value of investment funds.”

HANYS sent members additional budget details yesterday, will send members a more detailed description of the budget proposals this week, and plans to make facility-specific impact estimates available soon.

Published December 17, 2008