Letting NYC’s Municipal Hospital System go under is not an option

David R. Jones, La Nueva Mayoria / The New Majority

This is a presidential election year which means candidates in the opposing party are bashing everything the current President has done. And the far right’s favorite piñata is the Patient Protection and Affordable Care Act (ACA), President Obama’s historic health reform legislation.

To listen to the collective rants and bitter invectives heaped on the law by the 2016 Republican presidential field you’d think the ACA was some sort of abuse of power on the scale of the Watergate scandal.

Far from it. Sure, the 2010 law was passed along strict party lines when Democrats controlled both houses of Congress, a sore point to this day for Republicans. But politics aside, the ACA has been very good for the nation. It has helped increase access to health care for many low-income Americans, brought down insurance premiums and promoted greater equity in the healthcare system.

Under the ACA, a.k.a. “Obamacare,” more than 17 million Americans who didn’t have healthcare now have it. That includes more than two million New Yorkers – many of them low and moderate income workers -- who have enrolled in affordable, high-quality health coverage through the New York State of Health Marketplace.

But this week a muted constructive critique of the law came from one of the most unlikely quarters: New York City Hall. This criticism is right on the money. Here’s why.

Unintended Consequences

During a briefing on his proposed $82 billion dollar executive budget, which featured major changes for the city’s troubled Health and Hospitals Corporation (HHC), now called NYC Health + Hospitals, Mayor de Blasio argued that while the ACA has indeed helped reduce the ranks of the uninsured, it has also produced some "unintended consequences."

The mayor was referring to a provision in the law that triggers significant reductions in safety-net funding for the city’s hospital system. Health + Hospitals is the major source of care for more than a million city residents, a good number of them poor and uninsured. Federal Disproportionate Share Hospital (DSH) funding, which is allocated through the state, supports hospitals that serve disproportionate numbers of uninsured patients. Right now, the City stands to lose about $800 million in DSH funds starting in FY2018. That’s based on the law’s incorrect assumption that the uninsurance problem would be resolved. In New York City, though, this simply isn’t true.

The potential loss of critical federal funding is also serving to highlight financial problems at HHC. For years now, the city's hospital system has been losing revenues as the market consolidates and competition increases between HHC and other large hospital systems for Medicaid patients to fill beds and cover operating costs.

So where do we go from here? Allowing the city’s hospital system to go under is not an option; too many New Yorkers rely on it. As the mayor made clear, HHC’s mission of serving all patients, irrespective of their legal and insurance status, will not change. There are an estimated 800,000 uninsured city residents, many of them are immigrants, who rely on the system’s hospitals, community clinics and facilities for primary care. These are people who live and pay taxes in New York, but due to their immigration status are ineligible for Medicaid or Marketplace health coverage.

The mayor is proposing several reforms to stabilize Health + Hospitals. They include an infusion of funds to offset sharp revenue shortfalls, expanding community-based models of care, increasing outreach to uninsured New Yorkers, repurposing vacant and underutilized HHC land and emphasizing preventative care.

Prioritize Safety-Net Funds

But the real challenge for the mayor is convincing state and federal officials to spare the city from absorbing the entire burden of the DSH cuts.

Earlier this year, CSS issued a report examining the costs, eligibility and coverage options related to providing cost-effective, affordable and high-quality health insurance to nearly half a million immigrants living in New York who are presently uninsurable due to their immigration status.

The state must step up, and shoulder some of the costs associated with providing coverage to this population. The state is saving $645 million by shifting New York’s documented immigrant population from Medicaid into the new Essential Plan. These funds could be used to help cover New York’s remaining immigrant residents who have been left behind by the ACA. The state can and should also prioritize the allocation of safety-net funds for city hospital systems that serve the largest number of uninsured.

Our municipal hospital system serves more than a million New Yorkers every year. Maintaining it as a viable source of health care for needy New Yorkers must be one of our highest priorities.

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