LI hospitals prepare for cuts in Cuomo budget

Andrew Cuomo delivers his State of the State

Andrew Cuomo delivers his State of the State speech. (Jan. 5, 2011) (Credit: AP)

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With the wounds from last year's budget season still fresh, Long Island hospitals are bracing for even deeper cuts when Gov. Andrew M. Cuomo proposes his 2011-12 executive budget Tuesday.

"This is going to be more significant than anything we've ever seen," said Kevin Dahill, president of the Nassau Suffolk Hospital Council.

Last year, some $19.9 million was cut from Long Island hospitals. Over the last 36 months, state lawmakers cut more than $166 million from 23 Island hospitals, Dahill said.

While no figures have been released, reports from health industry officials and in the news media indicate some $2 billion to $3 billion may need to come out of the state's health care budget, primarily from Medicaid, the public insurance program for the low-income and disabled. Cuomo and state lawmakers have to close a state budget gap of about $10 billion.

New York spends about $53 billion annually to provide health care to more than 4.7 million people - nearly one in four state residents - through Medicaid, according to the state Health Department.

While all hospitals are expected to see their state revenue decline, the hardest hit will be the hospital and health care programs for low-income people. Those hospitals could see hiring freezes, program eliminations and possibly layoffs, Dahill said.

 

Push to restructure Medicaid

But while preparing for the worst, health care officials on Long Island say they also are attempting to be proactive in offering suggestions for restructuring Medicaid - including better managing care of the chronically ill, who can be the most expensive to treat.

Cuomo recently formed a Medicaid Redesign Team to solicit ideas to reduce the cost and growth of Medicaid. The team held a public hearing at Hofstra University on Friday as part of a statewide series.

"We are looking at everything. There's no program that is sacrosanct. Everyone understands that we are dealing with a new reality and we need to figure out how to deliver better quality a lot cheaper," said Michael Dowling, president of North Shore-Long Island Jewish Health System and co-chairman of the Medicaid team. Dowling said he couldn't predict how much North Shore's hospitals, nursing homes and outpatient centers stand to lose.

Arthur Gianelli, president and chief executive of Nassau University Medical Center in East Meadow, predicted a $10-million to $20-million loss in Medicaid funding that "the hospital just can't absorb."

The hospital, with an annual operating budget of $550 million, has been aggressively negotiating all of its contracts with labor, suppliers and private insurers and has been seeking more collaboration with North Shore, Gianelli said.

"Some sensitivity needs to be paid to those hospitals that care for a disproportionate number of Medicaid patients," Gianelli said.

"We are very worried about the very existence of this hospital," said Jerry Laricchiuta, president of Civil Service Employees Association Local 830, which represents about 90 percent of NUMC's 3,400 workers.

 

Still focused on growth

At Stony Brook University Medical Center, where more than a quarter of patients are on Medicaid, officials say the threat of cuts isn't getting in the way of expanding and adding new programs that will generate more revenue from patients with private insurance.

"You have to make investments to keep growing. If you stop growing and just get these provider cuts, you're done," Monica Mahaffey, Stony Brook's assistant director of governmental relations.

But Mahaffey said the hospital has gotten used to cutting costs and found $80 million in savings in recent years. "Yes, we're going to have massive cuts this year, but we've been getting massive cuts over the last few years," she said.

Dahill put it more starkly. "The hospitals are shell-shocked," he said. "How many times are we going to go through this?"

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