There are dark storm clouds on the horizon for hospitals and healthcare providers in the New York State budget. According to reports released in October by the New York State Division of the Budget and the New York State comptroller, the state is planning to delay more than $2 billion in Medicaid payments in order to avoid violating a "global cap" on Medicaid that was signed into law by Gov. Andrew Cuomo in 2012. This is not the first time the state has delayed payments - leading to an ever-growing budget gap that threatens payments to New York's hospitals and healthcare providers.
The latest deferment of Medicaid payments was not revealed until May, and now the deficit is projected to reach $3 billion to $4 billion. There are several factors that contributed to the deficit over time - including the escalating cost of healthcare nationwide, the state's takeover of the counties' annual increases in Medicaid costs in 2015, and the state's passage of the $15 minimum wage law in 2016 . However, delaying Medicaid payments over and over again could have devastating consequences.
New York's hospitals and health care providers must be paid for their services. Did you know that a large share of hospital reimbursement comes from Medicaid, which does not cover the cost of care? In the Rochester area, 68 percent of inpatient discharges and 60 percent of outpatient visits are covered by Medicare and Medicaid. It's astounding that hospitals are only reimbursed 73 cents for each dollar of care provided.
It's also important to remember who is covered by Medicaid. In the Southern Tier, 1 out of 3 children are covered by Medicaid . In addition, 48 percent of deliveries of babies are covered by Medicaid. Medicaid also covers grandparents - including 73 percent of Southern Tier nursing home residents. Finally, it covers low-income residents - including 30 percent of ER visits, clinical visits, and outpatient surgeries. Medicaid allows hospitals to provide care to the most vulnerable populations.
In addition, upstate New York is vastly different from New York City. Upstate New York hospitals have some of the lowest operating margins in the nation. Some of the small, rural hospitals are struggling to keep their doors open. Cutting Medicaid would be devastating - some hospitals would close, forcing patients to drive long distances to receive medical care. In addition, thousands of jobs would be eliminated because hospitals are among the largest employers in their communities.
It's imperative that our state legislators understand the challenges facing hospitals in Rochester, the Finger Lakes, and the Southern Tier. That's why Pandion Healthcare: Education & Advocacy is strongly opposed to legislation that would exacerbate the problem - including government-mandated staffing ratios. Legislation proposed by a down state labor union would force rigid, one-size fits all staffing ratios on all hospitals - regardless of their size or location. Upstate New York hospitals simply can't absorb another unfunded mandate.
Our representatives in state government must pass a responsible budget that protects Medicaid. In addition, they must reject legislation that disproportionally impacts upstate New York, such as government-mandated staffing ratios. We need to protect our hospitals and health systems, which generate $6.3 billion in economic activity and $715 million in tax dollars. It's time to give our hospitals and health systems the respect and funding they deserve.
Travis Heider is president and CEO of Pandion Healthcare: Education & Advocacy, which is a not-for-profit 501(c)3 association comprised of 17 hospitals and their related health systems in the nine counties of Monroe, Livingston, Ontario, Wayne, Seneca, Yates, Allegany, Steuben and Chernung. Pandion Healthcare: Education and Advocacy works closely with the Healthcare Association of New York State (HANYS) and the American Hospital Association (AHA), collaborating on many issues and activities.