It’s important to stabilize New York City Health and Hospitals Corp.
NYC safety net hospitals can lead the way on reform but need some help
Nearly 15 years ago the New York City Health and Hospitals Corp., the city’s vast public hospital system, was routinely criticized as grossly inefficient and on the verge of being dismantled for delivering what many considered substandard care. Much of the criticism was justified.
While the effort to “break up” and privatize the system was ultimately thwarted, it served as a much-needed wake-up call for the nation’s largest public hospital system to focus on greater efficiency and far-reaching quality improvements.
HHC has made remarkable strides since those difficult days. Quality and operational improvements made since that nadir have transformed the system into a nationally renowned organization delivering effective, efficient and patient-centered care. Indeed, our public hospitals now outscore the majority of New York City’s private hospitals on a host of publicly reported quality and patient-satisfaction measures. In 2008, HHC received the National Quality Forum and the Joint Commission’s John M. Eisenberg Award for Innovation in Patient Safety and Quality—an honor that would have been highly unlikely just a few years earlier.
But despite how far we’ve come, the road ahead is fraught with peril, and the timing could not be more ironic. Even with national healthcare reform a reality, and its potential to vastly reduce the number of uninsured Americans on the horizon, HHC is in serious jeopardy once again. The system faces a projected $1 billion budget deficit that could severely destabilize our infrastructure and compromise access to care.
How did we again arrive at the door of fiscal crisis? Like many hospital systems, HHC struggled with soaring costs for providing care, shrinking reimbursements and the swelling ranks of the uninsured long before the recession took hold. Specifically, over the past three years, the system’s annualized state Medicaid reimbursement has been slashed by $250 million, with another $50 million in cuts approved this year. Further, federal supplemental Medicaid funding for public hospitals is expected to decline by hundreds of millions of dollars, and the number of uninsured that HHC treats has skyrocketed by an additional 60,000 patients. And low Medicaid reimbursement rates for comprehensive primary-care services—a staple of the system’s safety net—generate enormous losses.
The importance of a fiscally stable HHC
Were HHC to flounder, there would be no way to fill the gap, and not just for poor patients.
cannot be overstated. Were it to flounder and fail, there would be no way to fill the healthcare gap left behind, and the poor would not be the only group to suffer. New York City’s remaining private, not-for-profit hospitals, many of whose emergency departments are already strained, would simply be overwhelmed.
Consider the breadth and scope of HHC’s reach. We serve 1.3 million patients annually, including 450,000 without health insurance. The system accounts for 5 million outpatient visits, 225,000 hospital admissions, 25% of all New York City births, 70% of its involuntary psychiatric admissions, 30% of its trauma services and 1 million emergency visits.
To protect and strengthen HHC over the long term, we must secure a reimbursement methodology that supports our focus and core mission of keeping patients and communities healthy through robust primary and preventive care. Fortunately, the new federal health reform law offers hope.
The Patient Protection and Affordable Care Act empowers the CMS to support global capitation reimbursement pilot programs under which an integrated healthcare delivery system such as HHC could receive a single monthly payment to cover all healthcare services needed by Medicaid patients, and perhaps by residual uninsured patients. Unlike traditional Medicaid fee-for-service payments, global capitation encourages investment in primary and preventive care and leads to more cost-effective care that improves the long-term health of patients, including those with chronic diseases, who account for a large portion of most states’ Medicaid expenses and are at higher risk of hospitalization.
This promising payment model would build on the extensive investments in primary and preventive care HHC has already made— investments that are reducing formerly persistent health disparities among New Yorkers. However, initial global capitation rates must be set at a level that will also support the investment necessary for a more robust care management and care coordination infrastructure, an infrastructure that can ultimately pay for itself under the capitated reimbursement model by reducing emergency department visits and hospitalizations.
As the next best thing to truly universal health coverage—there will always be uninsured patients in need of a safety net, including large numbers of undocumented immigrants—the system is now uniquely positioned to benefit from federal healthcare reform by serving as a proving ground for payment reform that aligns with long-term value for our healthcare dollar.
After a long and unparalleled period of stable senior management, along with consistently strong support from Mayor Michael Bloomberg, New York City’s critically important public hospitals are ready to help define how healthcare is delivered more effectively and efficiently in the post-healthcare reform world. As the largest healthcare safety net in America’s largest city, we ask only that government at all levels give us the opportunity and resources to show that it can be done.<<