NYC Health + Hospitals is the public health system serving New York City, operating as the primary safety net for residents regardless of their ability to pay. This page covers CBC’s work on the system’s fiscal sustainability, operating deficits, City subsidy levels, Medicaid supplemental payments, and efforts to improve operational efficiency.
This page was created with AICBC Insights uses AI to group, analyze and present data and recommendations from CBC's publications. Always reference the cited sources to verify important details..
The incoming Administration should continue efforts to improve Health + Hospitals' quality and efficiency, but also improve its fiscal stability and sustainability.
The City should benchmark H+H’s unit costs and revenue recovery ratios against nonprofit safety net providers in the city to improve H+H’s efficiency and guide the City subsidy level.
H+H’s scope of services should be examined in the context of its share of citywide services, given other safety net and academic medical centers.
The City should work with the State to implement Medicaid reforms that would more equitably distribute State Medicaid support.
The City Office of Management and Budget (OMB) and H+H leadership should develop a new approach to financial planning and budgeting.
Progress toward the benchmarks should be publicly monitored, and H+H leadership held accountable.
The State should better target Medicaid supplemental payments to H+H and other facilities with the greatest need, and finance the nonfederal portion of these payments with State revenues rather than local intergovernmental transfers.
The State should use more equitably the surplus operating revenue earned by large networks from commercial insurers to cross subsidize indigent care on a system wide as well as an intra-institutional basis.
The State should better align Medicaid hospital payment rates to reasonable unit costs of services, and fund with better use of Medicaid supplemental payments, more equitably allocated high commercial insurance payments and other broad based sources.
Key Data
In fiscal year 2024, the City provided $925 million to NYC Health + Hospitals (H+H) in unrestricted subsidy and funding for collective bargaining, which is more than double the $398 million provided in fiscal year 2022.
As of November 2021, the City’s annual subsidies to H+H total $2 billion, which the CBC notes challenges fiscal sustainability if they continue to increase.
In fiscal year 2021, the City’s subsidy to H+H was projected to increase by $266 million due to collective bargaining agreements and increased funding for the NYC Care program.
Potential federal funding cuts to Medicaid and the Essential Plan threaten to reduce revenues for NYC Health + Hospitals while simultaneously increasing demand for its services. To mitigate these risks, the city must prioritize critical services and manage its budget more conservatively, as it has already increased spending to unsustainable levels.
Recommendations related to NYC Health + Hospitals
The City should hold the line on new spending in the Executive and Adopted Budgets.
The City should buttress the General Reserve with at least another $1 billion in fiscal year 2026 to help absorb the immediate blow of federal cuts.
The City should strengthen the Rainy Day Fund by depositing $500 million and reserve the Fund for a short-term emergency like a recession, not for temporary mitigation of recurring federal cuts.
The City should implement a Program to Eliminate the Gap (PEG) to restrain spending growth, focused on streamlining administration, increasing efficiency, and shrinking programs that deliver less value to residents.
The City should end the budget gimmickry and present accurate, reasonable estimates of expenses and revenue, as required by the City Charter.
Key Data
$925 million
— City unrestricted subsidy and funding for collective bargaining provided to H+H in fiscal year 2024.
$398 million
— City unrestricted subsidy and funding for collective bargaining provided to H+H in fiscal year 2022.
$290 million
— City payment for H+H debt service in fiscal year 2024.
$58 billion
— Federal aid to New York State for Medicaid, which provides more than half of patient services revenues for safety net hospitals in the City.
The proposed New York State fiscal year 2026 budget is criticized for increasing spending and taxes while failing to address an $18.2 billion structural budget gap. The state is urged to prioritize fiscal responsibility by restraining spending growth, protecting reserves, and ensuring that changes to NYC Health + Hospitals supplemental payments are contingent on federal approvals.
Recommendations related to NYC Health + Hospitals
Make the NYC Health + Hospitals supplemental payment changes contingent on federal approvals.
New York State Budget Fiscal Year 2024 Major Actions and Fiscal Risks As of First Quarter Update New York City Fiscal Year 2024 Adopted Budget and Outlook
New York City's public hospital system, Health + Hospitals, has experienced rising city subsidies that are not fiscally sustainable. To ensure long-term financial health, the system must implement reforms to reduce its reliance on city funding.
Recommendations related to NYC Health + Hospitals
NYCHA and H+H should implement reforms to achieve fiscal stability.
New York City's Health + Hospitals system requires improved fiscal stability and sustainability to ensure it continues to serve as a crucial safety net. To achieve this, the city should benchmark unit costs and revenue recovery ratios against nonprofit providers, examine the scope of services, and pursue Medicaid reforms for more equitable state support.
Recommendations related to NYC Health + Hospitals
The incoming Administration should continue efforts to improve Health + Hospitals' quality and efficiency, but also improve its fiscal stability and sustainability.
The City should benchmark H+H’s unit costs and revenue recovery ratios against nonprofit safety net providers in the city to improve H+H’s efficiency and guide the City subsidy level.
H+H’s scope of services should be examined in the context of its share of citywide services, given other safety net and academic medical centers.
The City should work with the State to implement Medicaid reforms that would more equitably distribute State Medicaid support.
Key Data
$2 billion
— Annual City subsidies provided to Health + Hospitals.
The next New York City Comptroller will play a critical role not only in holding the next Administration and agencies accountable, investing and managing five pension funds with $248 billion in assets, and partnering in $13 billion City debt issuance, but also in spotlighting and promoting New York City’s fiscal…
21,200 is the total number of inpatient hospital beds in New York State—approximately 2.5 beds for every 1,000 people. The pandemic has brought a significant attention to New York's health care system, and some have called for greater hospital capacity to help New York be better prepared for the future.…
The City's subsidy to New York City Health and Hospitals is projected to increase by $266 million in fiscal year 2021, driven by collective bargaining agreements and expanded funding for the NYC Care program. This growth contributes to a total fiscal year 2021 budget of $1,075 million for the agency, representing a 33.0 percent increase from the previous year.
Key Data
$266 million
— The projected increase in the City's subsidy to New York City Health and Hospitals (H+H) for fiscal year 2021.
$808 million
— The adjusted adopted budget for New York City Health and Hospitals in fiscal year 2020.
$1,075 million
— The adopted budget for New York City Health and Hospitals in fiscal year 2021.
33.0%
— The percentage increase in the City-funded budget for New York City Health and Hospitals from fiscal year 2020 to fiscal year 2021.
CBC hosted a special panel discussion of prominent fiscal experts who helped New York overcome some of the most dire crises of the past. They provided insights and lessons from past experiences to help us understand and navigate the looming crisis. Stephen Berger Chairman, Odyssey Investment Partners; Former Executive Director,…
New York City Health + Hospitals faces a persistent operating deficit, averaging nearly $3 billion annually between 2015 and 2017, largely driven by outpatient services and inadequate reimbursement from public insurance programs. To address this, the City and State should implement performance-based benchmarks for H+H leadership and reform Medicaid supplemental payment structures to more equitably distribute funds and incentivize efficiency.
Recommendations related to NYC Health + Hospitals
The City Office of Management and Budget (OMB) and H+H leadership should develop a new approach to financial planning and budgeting.
Progress toward the benchmarks should be publicly monitored, and H+H leadership held accountable.
The State should better target Medicaid supplemental payments to H+H and other facilities with the greatest need, and finance the nonfederal portion of these payments with State revenues rather than local intergovernmental transfers.
The State should use more equitably the surplus operating revenue earned by large networks from commercial insurers to cross subsidize indigent care on a system wide as well as an intra-institutional basis.
The State should better align Medicaid hospital payment rates to reasonable unit costs of services, and fund with better use of Medicaid supplemental payments, more equitably allocated high commercial insurance payments and other broad based sources.
Key Data
$3 billion
— Average annual operating deficit for H+H in fiscal years 2015 to 2017.
46 percent
— Average operating deficit as a share of H+H's operating expenses in fiscal years 2015 to 2017.
$1.7 billion
— Estimated City support to H+H in fiscal year 2019.
$2.0 billion
— Projected baseline budget gap for H+H in fiscal year 2023.
$100 million
— Annual additional City funding pledged by the Mayor for the NYC Care program.
New York State’s $5.3 billion in Medicaid supplemental payments, which are vital for the financial viability of hospitals serving uninsured and Medicaid populations, face significant threats from looming federal cuts and criticized distribution methods. To address these challenges, the State must develop a more equitable strategy for distributing these funds and mitigating the impact of a potential $4 billion reduction in New York City Health + Hospitals' allotment.
Recommendations related to NYC Health + Hospitals
The State should create a plan for mitigating and equitably distributing scheduled federal DSH cuts in advance of their implementation to protect public hospitals like New York City Health + Hospitals.
The State should establish a more equitable distribution policy for the full set of supplemental programs to ensure funds are targeted to hospitals with the greatest financial need.
New allocation methods and contingency plans for federal cuts should take into account the role and magnitude of all of the supplemental payments and the interactions among them.
The State should reconsider the source of the nonfederal share of supplemental payments to ensure long-term financial stability for public health systems.
Key Data
$563 million
— H+H UPL funding in the most recent audited year.
$4 billion
— Total reduction in H+H allotment if federal DSH cuts are implemented.
$2.9 billion
— Annual federal DSH cut New York State faces beginning October 1, 2019.
$5.3 billion
— Total Medicaid supplemental payments in New York State.
$3.7 billion
— Total funding for the Disproportionate Share Hospital (DSH) Program.
$1.1 billion
— Funding for the Indigent Care Pool.
NYC Health + Hospitals faces significant financial challenges, with projected out-year budget gaps reaching $1.8 billion despite recent improvements in cash reserves. To ensure long-term stability, the city must balance its increased financial support for the health system with a focus on efficiency savings and sustainable revenue growth.
Recommendations related to NYC Health + Hospitals
The City should support H+H’s aggressive turnaround plan while ensuring it is implemented in a fiscally sustainable and responsible manner, with spending increases offset by efficiency savings and new revenues.
Key Data
$747 million
— Cash on hand at the close of fiscal year 2018.
$137.7 million
— Increase in cash on hand compared to the prior year.
$1.8 billion
— Projected out-year budget gaps for the authority.
$1.8 billion
— Expected level of City support for the authority this year.
30%
— Increase in City support compared to fiscal year 2014.
New York City's emergency medical services system is inefficiently structured, with excessive reliance on expensive fire engine responses for non-critical incidents and a lack of programs to reduce unnecessary ambulance requests. Restructuring the system to prioritize Advanced Life Support ambulances and coordinating with entities like New York City Health + Hospitals to manage chronic care could improve service quality and generate significant taxpayer savings.
Recommendations related to NYC Health + Hospitals
Build on the experience of other cities to develop programs to reduce residents’ unnecessary or inappropriate requests for an ambulance.
Increase the number of and more efficiently staff the ambulances which are best able to respond to the life threatening incidents (known as Advanced Life Support or ALS ambulances) so they can arrive at relevant incidents more promptly.
Dramatically reduce the role of fire engines in responding to medical incidents; they should be dispatched to these incidents only when it is likely the engine will arrive before an ambulance and the fire engine’s staff’s presence will result in quicker, appropriate medical treatment.
Enable one paramedic to staff ALS ambulances so that more are available to respond to the most time sensitive, life threatening incidents.
The City should conduct a thorough assessment of the location, coverage, and workload of fire companies to identify where companies could safely close without jeopardizing response times.
Key Data
$1.1 billion
— Annual spending by the City of New York to provide emergency medical services.
$58.5 million
— Estimated annual savings from a 10 percent reduction in unnecessary or inappropriate ambulance requests.
$1,970
— Estimated average cost of a fire engine response to a medical incident in 2017.
$486
— Average cost of an ambulance run in 2017.
1.5 million
— Number of medical incidents the FDNY responded to in 2017.
38.7 percent
— Share of total incidents in 2017 that were categorized as potentially life threatening.
The City's subsidy to New York City Health + Hospitals is projected to reach $1.8 billion in fiscal year 2019, reflecting the agency's ongoing reliance on significant operating support. To address this fiscal stress, the City may need to fundamentally rethink its approach and relationship to the public hospital system.
Recommendations related to NYC Health + Hospitals
To be effective, the City may need to rethink its approach and relationship to NYC Health + Hospitals.
Key Data
$1.8 billion
— The City’s subsidy to New York City Health + Hospitals (H+H) in fiscal year 2019.
New York State's inequitable distribution of Disproportionate Share Hospital (DSH) payments disproportionately harms New York City Health + Hospitals, which serves a significantly higher share of Medicaid and uninsured patients than other facilities. With federal funding cuts looming, the state must reform its allocation formulas to ensure funding is directed to the hospitals with the greatest need rather than leaving the city's primary safety net system to bear the brunt of the losses.
Recommendations related to NYC Health + Hospitals
The State should follow through on the recommendation to convene a workgroup to evaluate revisions to the methodologies.
Reforms to the State’s DSH program should be enacted in the current legislative session.
The distribution formulas, particularly that for the Indigent Care Pool, should be revised to direct DSH payments to the hospitals with the greatest need.
State priorities for distributing DSH payments should not leave H+H to suffer DSH cuts alone.
The State should make payments promptly; after DSH funds have been earned and cash is available, the State should disburse the funds without delay.
Key Data
$3.6 billion
— Annual amount of DSH payments distributed to hospitals across New York State.
$1.8 billion
— New York's share of the $12 billion in federal DSH funding, the largest amount of any state.
$724 million
— Projected loss of federal funding for New York hospitals in federal fiscal year 2020 under the latest schedule of DSH cuts.
73 percent
— Share of H+H inpatients that are Medicaid patients, compared to 52 percent in other New York City hospitals.
$759 million
— Losses reported by the 11 H+H hospitals from serving the uninsured.
$2 billion
— Projected deficits for H+H in coming years.
The New York City Preliminary Budget for Fiscal Year 2019 fails to address potential fiscal risks, leaving the financial status of NYC Health+Hospitals and the New York City Housing Authority in a precarious state. Strengthening the financial position of these critical entities is essential for achieving long-term fiscal stability.
Recommendations related to NYC Health + Hospitals
The City should strengthen finances at NYC Health+Hospitals (H+H) to ensure fiscal stability.
NYC Health + Hospitals faces significant financial strain, with the city subsidy required to support its operations ballooning from $607 million in 2011 to over $1.8 billion in 2016. To achieve fiscal stability, the system must pursue aggressive cost containment, shift uninsured outpatient services to the private sector, and address the disproportionate burden of psychiatric care it carries compared to other hospitals.
Recommendations related to NYC Health + Hospitals
A strategy for improving H+H finances may require shifting selected services, notably uninsured outpatient visits, from the public to the private sector.
Decreasing the concentration of psychiatric patients in H+H would potentially improve their care and enable H+H to improve its operations.
Attention can be given to improving the outpatient payor mix.
New State policies with respect to Medicaid payments for outpatient services may be needed to aid H+H’s bottom line.
H+H likely will have to do more cost containment than was evident in Los Angeles.
Key Data
$1.8 billion
— The City subsidy to H+H in fiscal year 2016, which grew from $607 million in fiscal year 2011.
$20,170
— The average cost per discharge at a H+H facility in 2015, which was 22.6% higher than the average at New York City voluntary facilities.
80%
— The share of uninsured clinic visits in New York City that occurred at an H+H facility in 2014.
20%
— The percentage of staffed hospital beds in New York City accounted for by H+H's 11 hospitals.
60%
— The share of schizophrenia discharges in New York City that occur at H+H facilities.
New York City Health + Hospitals faces significant fiscal challenges that may require the city to forgo up to $165 million in reimbursements for fringe benefits and legal claims. Additionally, potential reductions in federal spending pose a substantial risk to the financial stability of the health system and other city services.
Key Data
$165 million
— Potential cost to the City to forgo reimbursement for fringe benefits and judgments and claims due to New York City Health + Hospitals' fiscal problems.
New York State's Medicaid supplemental payment system, which provides $5 billion annually to hospitals, is facing significant federal cuts that will disproportionately impact municipal facilities like NYC Health + Hospitals. To ensure equity, the state must reevaluate its distribution priorities rather than allowing these reductions to fall primarily on public institutions that rely heavily on these funds to cover uncompensated care.
Recommendations related to NYC Health + Hospitals
The State should reconsider its priorities in distributing Medicaid supplemental payments.
Pending cuts should not fall only on H+H, and adjustments, such as reduced payments to voluntary hospitals with limited reliance on supplementary payments, may be needed.
Key Data
$5 billion
— Total annual supplemental payments provided by four separate programs.
$3.6 billion
— Amount of the $5 billion total that comes from the Disproportionate Share Hospital (DSH) program.
$2.2 billion
— Total supplemental payments received by H+H hospitals.
$1.1 billion
— Net gain for H+H hospitals after accounting for funds provided by New York City.
$370 million
— Amount of net annual cuts in 2018 that New York City municipal hospitals are slated to bear.
$659 million
— Projected impact on New York of the nationwide DSH payment decrease.
The NYC Preliminary Budget for FY2018 faces critical questions regarding economic assumptions, citywide savings, and the funding of major municipal programs, including the $1.5 billion budgeted for homeless shelters and $17 billion in unmet capital needs for the New York City Housing Authority. Additionally, the budget must address the fiscal stability of NYC Health + Hospitals and potential labor-related health care savings bonuses.
This presentation, from the CBC panel discussion "The Berger Commission: 10 Years On," reviews how health care services in New York City have evolved since the New York State Commission on Health Care Facilities in the 21st Century, known as "The Berger Commission" issued its recommendations in 2006.
New York City Health + Hospitals saw a 6% increase in MetroPlus enrollment during fiscal year 2016. Despite this growth, the total number of unique patients served by the system continued to decline for the second consecutive year.
Key Data
6%
— Increase in MetroPlus enrollment for New York City Health + Hospitals in fiscal year 2016.
New York City Health + Hospitals has faced challenges in maintaining patient volume, with a 2.4 percent decline in the first four months of fiscal year 2016 compared to the same period in the previous year. While MetroPlus enrollment reached 472,251 enrollees in fiscal year 2015, the system is now tasked with expanding market share to ensure financial viability.
Key Data
0.6 percent
— Increase in unique patients served by New York City Health + Hospitals in fiscal year 2014 compared to 2013.
1.2 million
— Total number of unique patients served by New York City Health + Hospitals in fiscal year 2014.
0.3 percent
— Decrease in patients served by the system in the fiscal year following 2014.
2.4 percent
— Decline in patients served by New York City Health + Hospitals in the first four months of fiscal year 2016 compared to the same period in fiscal year 2015.
472,251
— Total number of MetroPlus enrollees reached in fiscal year 2015.
The Bond Buyer Maria Doulis of the watchdog Citizens Budget Commission and Howard Cure of Evercore Wealth Management dissect New York City’s $82 billion budget with Bond Buyer Northeast regional editor Paul Burton. They explore efficiencies, debt management, reserves, the economy, the capital budget and Mayor Bill de Blasio’s plan…
New York City is increasing its operating subsidy for NYC Health + Hospitals by $799 million, a tenfold rise to $877 million, to offset declining revenues from Medicaid-related support. In addition to this direct funding, the city is providing further support by forgiving reimbursement for medical malpractice claims and debt service, while requiring the agency to develop a plan to become more self-sufficient.
Key Data
$799 million
— The increase in City operating funding allocated to NYC Health + Hospitals.
$877 million
— The total amount of City subsidy for NYC Health + Hospitals in fiscal year 2020.
10.5 percent
— The portion of NYC Health + Hospitals' current budget represented by the direct City subsidy.
91 percent
— The growth rate of subsidies to independent agencies, which is driven primarily by NYC Health + Hospitals.
New York City's public hospital system faces a growing fiscal crisis with projected deficits reaching $1.8 billion by 2020, despite receiving $497 million in emergency support and ongoing debt service forgiveness. To maintain a balanced city budget, officials must move quickly to implement a viable financial plan with specific savings initiatives rather than relying on general strategies.
Recommendations related to NYC Health + Hospitals
The city must follow up effectively and move quickly to stop the bleeding of cash at Health + Hospitals to ensure the city's budget remains balanced.
The newly appointed commission must create a viable financial plan to address the hospital system's fiscal crisis.
The city must identify and implement specific savings initiatives rather than relying on general strategies to solve the hospital system's fiscal crisis.
Key Data
$160 million
— Additional funding allocated to New York Health + Hospitals in the fiscal year 2017 executive budget.
$180 million
— Value of debt service payments for Health + Hospitals forgiven by the city in fiscal year 2017.
$497 million
— Emergency support provided by the city to bail out the hospital system in the current fiscal year.
$180 million
— Amount committed annually by the city to support the hospital system in future years.
$1.8 billion
— Projected deficits for the hospital system growing to this amount by 2020.
The fiscal year 2017 budget includes $160 million in additional funding for NYC Health + Hospitals, alongside the forgiveness of $180 million in debt service payments. However, the system's financial stability remains at risk because its savings plan relies heavily on uncertain federal Medicaid waivers and revenue increases.
Recommendations related to NYC Health + Hospitals
The City must secure Medicaid revenue waivers from the Federal government to ensure the viability of the NYC Health + Hospitals savings plan.
NYC Health + Hospitals must increase MetroPlus revenues to avoid placing additional stress on the City’s coffers.
The City must implement expense reductions within NYC Health + Hospitals to mitigate the risk of mushrooming budget gaps.
Key Data
$160 million
— Additional funding allocated to NYC Health + Hospitals in fiscal year 2017.
$180 million
— Debt service payments for NYC Health + Hospitals forgiven by the City in fiscal year 2017.
NYC Health + Hospitals faces mounting fiscal pressures and is reportedly at risk of running out of cash, necessitating a credible turnaround plan. The January budget provided $337 million in one-time support, with the expectation that the upcoming Executive Budget will include a comprehensive strategy and potentially further city assistance.
Recommendations related to NYC Health + Hospitals
The Executive Budget should include a credible turnaround plan for NYC Health + Hospitals formulated with consultants.
The City should provide additional support for NYC Health + Hospitals if required by the turnaround plan.
Key Data
$337 million
— One-time support for NYC Health + Hospitals included in the January budget.
The New York City preliminary budget for fiscal year 2017 increases spending by 4.5 percent without raising tax rates, relying on economic growth and rising property values. While the budget provides support to NYC Health + Hospitals to address its cash crunch, it lacks a comprehensive savings plan or a significant boost in reserves to prepare for future economic downturns.
The New York City Health and Hospitals Corporation faces a severe fiscal crisis, with projected deficits reaching $1.7 billion by fiscal year 2018 and cash reserves expected to be exhausted by 2016. To ensure long-term sustainability, the organization must implement aggressive expenditure controls, optimize its MetroPlus managed care plan, secure equitable funding for uninsured care, and establish a more stable financial relationship with the City.
Recommendations related to NYC Health + Hospitals
HHC will need to intensify its efforts to make service delivery more efficient and reduce unneeded hospital capacity.
MetroPlus should seek to retain more of its members' utilization at HHC facilities by attracting patients to in-house providers.
HHC should advocate for available state tax exemptions and funding sources conditioned on greater participation by voluntary hospitals in caring for the uninsured.
HHC and municipal leaders should develop more rational and stable guidelines for funding HHC.
HHC should explore capitated payments for the uninsured that reflect the cost of providing care and incentive payments for implementing state-of-the-art care management models.
Key Data
$668 million
— Deficit run by the Health and Hospitals Corporation in fiscal year 2013.
$645 million
— Estimated deficit for the Health and Hospitals Corporation in fiscal year 2014.
$1.7 billion
— Projected imbalance between revenues and expenditures for the Health and Hospitals Corporation in fiscal year 2018.
$2.2 billion
— Annual revenues of the MetroPlus Medicaid managed care plan operated by the Health and Hospitals Corporation.
467,823
— MetroPlus enrollment growth from 2005 to 2014.
700,000
— Estimated number of New Yorkers who will still be left uninsured despite the Affordable Care Act.
The New York City Health and Hospitals Corporation faces a projected $3.2 billion cash shortfall by fiscal year 2018 and a $4.8 billion GAAP deficit, driven by declining revenues and rising costs. To ensure fiscal stability, municipal leaders must develop rational funding guidelines, including potential capitated payments for the uninsured and incentive payments for effective care management models.
Recommendations related to NYC Health + Hospitals
City leaders should develop more rational and stable guidelines for funding HHC in its efforts to meet its mandates, including capitated payments for the uninsured that reflect the actuarially-based cost of providing care.
City leaders should implement incentive payments for state-of-the-art care management models that improve quality and reduce costs.
HHC leaders can advocate for conditioning available tax exemptions and funding sources on greater participation by all voluntary hospitals in sharing the burden of caring for the uninsured.
HHC will need to intensify its restructuring efforts to realize savings of the magnitude required by fiscal year 2018.
HHC needs to continue to grow enrollment and increase returns for MetroPlus.
Key Data
$3.2 billion
— Projected accumulated cash shortfall by fiscal year 2018.
$4.8 billion
— Projected accumulated GAAP deficit by fiscal year 2018.
$668 million
— HHC deficit in fiscal year 2013.
$1.7 billion
— Projected budget gap in fiscal year 2018.
$7.6 billion
— Estimated total revenue in fiscal year 2014.
$9.8 billion
— Projected expenditures in fiscal year 2018.
The New York City Health and Hospitals Corporation faces significant fiscal challenges that are detailed in a budget profile produced in partnership with City & State. This profile provides an overview of the agency's financial situation as of September 2014.
The Health and Hospitals Corporation successfully reduced its medical malpractice settlement and judgment costs by 33 percent between 2003 and 2013 by taking financial responsibility for claims and implementing internal risk management and safety initiatives. This strategy of holding agencies accountable for their own legal costs is recommended as a model for other city agencies to reduce their own rising settlement expenditures.
Recommendations related to NYC Health + Hospitals
The City should include the cost of settlements and judgments in agency budgets so that these costs become a more explicit part of each City Commissioner’s responsibility.
Agencies should create an internal Law and Claims Department to take over malpractice cases and attempt to reduce the number of claims.
Agencies should implement initiatives to improve safety and to eliminate errors such as infection prevention measures, pharmacy robots, electronic medical records, and automated medication administration.
Agencies should analyze claims to identify practices, shifts, precincts, units, or officers that open the department to legal liability.
Agencies should act quickly to address any issues that are identified through claim analysis.
Key Data
$674 million
— Settlements and claims expense in the fiscal year 2015 budget.
54 percent
— Share of total settlements and judgments in fiscal year 2013 for which HHC and the NYPD were responsible.
$82.7 million
— Settlements and judgments against HHC for medical malpractice in 1992.
$195.4 million
— Settlements and judgments against HHC for medical malpractice in 2003.
$130.6 million
— Settlements and judgments against HHC in fiscal year 2013.
33 percent
— Reduction in HHC settlements and judgments between fiscal year 2003 and fiscal year 2013.
The fiscal year 2015 budget increases the City's financial support for the Health and Hospitals Corporation, which faces significant budget deficits and capital needs. City leaders are urged to analyze the finances of the corporation and collaborate with its leadership to develop strategies that ensure its long-term financial viability.
Recommendations related to NYC Health + Hospitals
City leaders should analyze the finances of New York City Health and Hospitals Corporation and work with their leaders to develop plans to improve their financial viability.
The fiscal year 2015 preliminary budget addresses the city's retiree health liability by restoring $1 billion to the Retiree Health Benefits Trust Fund and increases future annual reserves from $300 million to $600 million. These measures aim to mitigate budgetary risks, including the precarious financial status of the New York City Housing Authority and the Health and Hospitals Corporation.
The New York City Health and Hospitals Corporation faces significant fiscal challenges as its expenses for pensions and benefits outpace revenues, while critical Medicaid supplemental payments are increasingly jeopardized by federal budget cuts. Without identifying new funding sources or achieving greater operational efficiencies, the corporation faces projected operating deficits exceeding $1.7 billion by fiscal year 2016.
Recommendations related to NYC Health + Hospitals
HHC must redouble its efforts at delivering services more efficiently to avoid a dramatic reduction in services for needy residents.
The HHC and the City must identify sources for these funds to replace any lost supplemental Medicaid payments.
HHC may need to implement steeper expenditure reductions and layoffs should the current plan fail to achieve savings goals.
Key Data
$1.6 billion
— Annual revenues expected from special Medicaid supplementary payments.
$1.7 billion
— Projected operating deficit for HHC in fiscal year 2016.
$218 million
— Amount of personal service expenditures reduced by trimming full-time employee headcount.
2,500
— Number of full-time employees trimmed by HHC between 2009 and early 2012.
$1.7 billion
— Total capital commitments made by the City for HHC in fiscal years 2002 through 2011.
$911 million
— Projected cash-defined operating deficit in fiscal year 2016 if unspecified gap-closing actions fail to materialize.
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