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Economic & Community Benefit Analyses:

Statewide Report

New York’s Hospitals and Health Systems Improve the Economy and Community

Economic Activity icon

$188,000,000,000

Economic activity

The economic activity generated by hospitals through jobs and the purchasing of goods and services makes up 10.6% of the state’s entire gross domestic product. Data are mainly from 2020 New York state hospital cost reports.

Jobs generated icon

867,000

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 2020.

Payroll expenditures icon

$51,600,000,000

Payroll expenditures

New York hospitals’ #1 investment is in their people, including direct salary and benefits to their employees. Data are mainly from 2020 New York state hospital cost reports.

Tax dollars generated icon

$27,600,000,000

Tax dollars
generated

New York hospitals generate significant tax dollars and stimulate the economies of local communities and the whole state. Data are mainly from 2020 New York state hospital cost reports and state/federal tax tables.

Community Benefits and Investments icon

$13,200,000,000

Community benefits
and 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: 2019 IRS Form 990 Schedule H, reported by hospitals. This figure does not include the billions more in community benefit provided by New York’s 23 public hospitals, which are exempt from filing this IRS form.

Outpatients Provided Care icon

49,500,000

Outpatients
provided care
People Treated in the Emergency Room icon

7,000,000

People treated in the
emergency room
People Admitted to Hospitals icon

2,100,000

People admitted
to hospitals
Babies delivered icon

207,000

Babies delivered

The hospital-specific patient volume figures in this report are from 2020, the latest year available. Patient volume patterns were severely impacted by the COVID-19 pandemic in 2020. Even with surges of COVID-19 patients across the state, inpatient volumes were down 11% on average from 2019 to 2020; emergency room visits dropped by 20%, with overall outpatient volumes dropping by 12%. While each hospital experience during 2020 was different, these downward volume trends show just part of the pandemic’s impact on healthcare utilization and hospital financials statewide.

Reimbursement icon

51%

Reimbursement from Medicare and Medicaid

In New York, 70% of inpatient discharges and 61% 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.

Statewide financial challenges

The past two years have been incredibly challenging for New Yorkers and the hospitals and health systems that serve them. As this persistent pandemic continues to stretch our health system to its limits, our state’s healthcare providers continue to courageously rise to the challenge. New York hospitals and their care teams have saved the lives of more than 200,000 people diagnosed with COVID-19 as of January 2022, discharging them back into the community.

This extraordinary effort has taken a fiscal toll on our hospitals. In 2020, New York’s hospitals collectively recorded the lowest negative operating margin in 20 years (-1.4%) and a $3 billion downward margin swing from 2019 to 2020.

These losses, extreme even in a normal year, were partially mitigated by federal support via the creation of the Provider Relief Fund. Without this federal support, our hospitals would have suffered an unfathomable statewide average operating margin of less than -10%.

Unfortunately, this vital federal support has expired and will not address fiscal challenges associated with our response to delta, omicron and future COVID-19 waves.

Now, more than ever, we must support our healthcare providers — the health of New York’s people and economy depend on them.

Key fiscal data points for New York’s hospitals and health systems:

  • Hospitals statewide reported a -1.4% average hospital operating margin (compared to 5.5% nationally in 2020).
  • Collectively, New York’s hospitals reported the narrowest average operating margin in the country in 2020.
  • 49% of New York’s hospitals reported negative operating margins in 2020 (83% if federal Provider Relief Funds and state supportive funding are not considered).
  • 55% of New York’s hospitals reported fair or poor financial condition in 2020 (70% if federal Provider Relief Funds and state supportive funding are not considered).
  • Collectively, New York’s hospitals reported the 7th worst commercial insurance reimbursement rate in the country.
  • For each dollar of care provided in New York: Medicare pays 89 cents; Medicaid pays 61 cents — the value of public reimbursement levels has declined from previous years mainly from the increase in costs required to appropriately staff and deliver care.