Statewide Report
New York’s Hospitals and Health Systems Improve the Economy and Community
$192,000,000,000
Economic activity
The economic activity generated by hospitals through jobs and the purchasing of goods and services makes up 9.6% of the state’s entire gross domestic product. Data are mainly from 2021 New York state hospital cost reports.
856,000
Jobs generated
Hospitals and health systems are often the largest employers in communities, generate many more jobs and are top 10 private sector employers in every region of New York. Data source: New York State Department of Labor 2021.
$53,200,000,000
Payroll expenditures
New York hospitals’ #1 investment is in their people, including direct salary and benefits to their employees. Data are mainly from 2021 New York state hospital cost reports.
$28,200,000,000
Tax dollarsgenerated
New York hospitals generate significant tax dollars and stimulate the economies of local communities and the whole state. Data are mainly from 2021 New York state hospital cost reports and state/federal tax tables.
$17,200,000,000
Community benefitsand investments
Adhering to their charitable mission, hospitals cover the cost of care provided to people in need; subsidize care and services to low-income, elderly and under-served communities; and continuously invest in many community health initiatives. Data source: 2020 IRS Form 990 Schedule H, reported by hospitals. This figure does not include the billions more in community benefit provided by New York’s 22 public hospitals, which are exempt from filing this IRS form.
60,300,000
Outpatientsprovided care
7,300,000
People treated in theemergency room
2,200,000
People admittedto hospitals
204,000
Babies delivered
51%
Reimbursement from Medicare and MedicaidIn New York, 71% of inpatient discharges and 58% of outpatient visits are covered by Medicare and Medicaid.
A large share of hospital reimbursement comes from Medicare and Medicaid, which do not cover the cost of care. This underpayment is driven by large volumes of inpatient and outpatient services provided to individuals covered by these public insurance programs.
Critical Condition
The COVID-19 pandemic placed extraordinary stress on the nation's and New York's healthcare system. Today, New York state's hospitals remain in crisis. They face a national healthcare worker shortage, uncontrollable expense increases, fewer places to discharge patients, concurrent public health crises, stagnant infrastructure and market changes that leave hospitals increasingly serving only the sickest and most vulnerable patients.
As a result of circumstances beyond their control, hospitals statewide need urgent help to sustain their services. According to a fall 2022 survey* by New York's state and allied regional hospital associations, New Yorkers are losing access to healthcare services amid escalating care delivery costs and persistent workforce shortages — and providers expect access to medical services to further deteriorate.
Key survey findings:
- 49% of hospitals report reducing and/or eliminating services to mitigate staffing challenges while ensuring their most critical services remain available.
- 100% report a nursing shortage they cannot fill; over 75% commented that other key worker positions cannot be filled directly impacting the access to healthcare services.
- There was a 134% increase in hospitals' contract staffing costs, an increase driven by the need to appropriately staff for patient care with the only nursing resources available.
- Costs for drugs, energy and supplies are also up and hospitals expect this trend to continue in 2023.
- As a result of these cost challenges and lagging revenues, 64% of hospitals report a negative operating margin (losing money when comparing care-related revenue and expenses); 85% report negative or unsustainable operating margins (margins of less than 3%).
- Including one-time pandemic relief, the median margin reported by New York hospitals and health systems hovered around break even in 2020 and 2021 but has deteriorated to negative 3.7% in 2022.
Crisis on top of crisis
New York's hospitals have no breathing room to absorb escalating expenses as their reimbursement from Medicare and Medicaid — hospitals' highest-volume payers and the insurers for more than half of all New Yorkers — continues to be far below the cost of care and completely inadequate. For each dollar of care provided by New York's hospitals, Medicaid pays just 61 cents; Medicare pays 84 cents.
Immediate help needed
While relief funding helped stabilize the healthcare system in the first two years of the pandemic, there is no new support on the horizon.
Government help is needed right now to sustain the current workforce, bolster the pipeline of new healthcare workers and fix longstanding reimbursement shortcomings that threaten patient access to care in communities across the state. The state and federal governments must immediately provide new funding, enact common sense policy changes and make no cuts to existing vital healthcare funding.
*This fiscal survey was a joint effort of HANYS, Greater New York Hospital Association, Healthcare Association of Western and Central New York, Iroquois Healthcare Association and the Suburban Hospital Alliance of New York State. Responses are from hospitals and health systems in all regions of the state with a participation rate that reflects over 90% of the revenue New York hospitals and health systems generate on an annual basis. See the full survey results.
