Cure for NY’s Sick Hospitals
New York City’s 11 public hospitals are in dire financial straits. City hospital chief Dr. Ram Raju has laid out a plan to put these hospitals on the road to financial wellness, but his scheme is a sugar pill.
Worse, these city-run hospitals aren’t the only ones in critical condition. At least a dozen other hospitals across the five boroughs are floundering financially.
Unlike the city’s public hospitals, refuges for the uninsured, these other facilities have no reason to be kept on life-support with taxpayer dollars.
They’re medical money pits that offer mediocre care and dilapidated facilities. They should be closed or sold to investors who can upgrade them. But politicians and unions stand in the way.
In 2013, mayoral candidate Bill de Blasio mugged for the cameras as he got arrested while protesting the closing of Long Island College Hospital.
LICH was bleeding $13 million a month, but de Blasio, the hospital unions and assorted activists opposed replacing it with a new emergency department operated by NYU Langone.
De Blasio demagogued the issue all the way to an election-night victory, then supported the conversion plan.
To help more politicians cynically fight against hospital closings, New York state senators are pushing a bill called the LICH Act.
It should be called the Demagoguery, Demonstrations and Delay Act. It invites every elected official in the state — even members of Congress, who have no say over local hospitals — to object to closings.
The legislation promotes protest. It doesn’t prevent hospitals from failing. They have empty beds because medical advances mean patients don’t have to spend many nights, or even one night, even after an operation.
Successful hospitals emphasize outpatient care and operate satellite ERs, and primary-care clinics.
Or they merge with other hospitals. Bigger is better. Small hospitals lack bargaining clout, get paid less by insurers and pay more to suppliers. Rating agency Moody’s warns small hospitals all over America are headed for trouble.
In New York, they are also being dragged down by exorbitant labor costs, with fringe benefits adding a staggering 50 cents to 60 cents to every dollar of wages.
You — the taxpayer — pay for these rich benefits wrung from failing hospitals.
Last month, Service Employees International Union 1199 bragged that because “thousands of our 1199 sisters and brothers have called and e-mailed state legislators,” the state budget includes $285 million to keep 28 hospitals open and save 25,000 union jobs.
Instead of wasting your money, the state should let investors purchase hospitals, upgrade them and forge viable health-care networks. But New York law prohibits that.
Jill Furillo, head of the state nurses’ union, claims “for-profit health-care does not work.” Sorry, but the facts prove otherwise. A new Harvard analysis shows that investor-owned hospitals do better financially without diminishing care.
“They stabilized a bunch of institutions that were not financially stable, and they did not hurt patients,” says Harvard’s David Cutler. “We did not see that there were higher mortality rates, even for vulnerable populations,” adds lead author, Karen Joynt.
Privatization is the answer for many failing hospitals, but it’s not an option for the city’s 11 public hospitals. “I never see venture capitalists lined up outside my door,” says Raju.
No wonder. HHC hospitals take care of 45 percent of the city’s uninsured, including newcomers. These are sanctuary hospitals.
Tax dollars are their only means of support. Contrary to Raju’s recovery plan, it’s unrealistic to predict a near doubling of paying customers by 2020. Hospitals all over the city are competing aggressively for patients.
So if city hospitals are going to continue needing taxpayer support, the least officials can do is control their costs. Instead, de Blasio did the opposite: Last year, he negotiated contracts with hospital unions that promise far more than HHC can afford.
True, the mayor said he’d cover the higher costs out of the city’s budget. But what happens when the economy sours and his budget is squeezed?
Or, as the Citizens Budget Commission asks, when de Blasio’s not the mayor any more and the contracts are still in effect? HHC will fall off the fiscal cliff.
City politicians need to address the challenges facing our hospitals responsibly, before the hospital capital of the nation turns into the hospital graveyard.
Betsy McCaughey is a senior fellow at the London Center for Policy Research and Chairman of the Committee to Reduce Infection Deaths.