WEEK IN REVIEW : de Blasio's plan for public hospitals will depend on Albany, real estate forces


Amidst a swirling corruption scandal, the office of Mayor Bill de Blasio (D-New York City) attempted to refocus public attention on his policy work last week by announcing a plan to save the public municipal hospital system.

An advance copy of the plan was provided to The New York Times, which published the first report about the plan on Monday evening.

On one level, the plan appears noble-minded, by declaring that access to healthcare is a human right, but, at the same time, the plan places so much emphasis on hospital occupancy rates and medical insurance rates, seemingly portraying the public municipal hospital system as a business.

In an effort to refocus the work of the public municipal hospital system, the de Blasio administration had already changed its name from the Health and Hospitals Corporation to Health + Hospitals.

News about the plan, which preceded the release of updated details about Mayor de Blasio’s proposed Fiscal Year 2017 budget, competed for headlines with revelations that senior aides and a unregistered lobbying firm key to Mayor de Blasio’s success were served with subpoenas in connection with one aspect of the reported, wide-ranging, Federal corruption investigation into the activities of the de Blasio administration.

By the time some of the key news media outlets were able to focus on the hospital restructuring plan, it was described as long over due, for example, in criticism published on Friday by the Editorial Board of The New York Daily News.

With 11 full-service hospitals, dozens of other healthcare facilities, and over 40,000 employees, Health + Hospitals is the largest public municipal hospital system in the nation. It is also the largest hospital chain in New York City, with a 17 per cent. market share of all hospital stays, according to the mayor’s plan. Mount Sinai and New York-Presbyterian tie for second with each having 14 per cent. market share.

The mayor’s plan examined how Health + Hospitals has faced a competitive disadvantage when compared with other hospital systems, given the target community the public municipal hospital system has been designed to serve : the economically-disadvantaged, as well as undocumented immigrants.

Sometimes these factors have converged, like in the area served by one of the public hospitals, Metropolitan Hospital, in the Upper East Side neighborhood of Manhattan. Metropolitan Hospital is located near the many other large hospitals in the Upper East Side often described as “Bed Ban Alley,” except that Metropolitan Hospital is located nearer Spanish Harlem.

In 2014, Metropolitan Hospital experienced a 38 per cent. vacancy rate of its hospital beds whilst serving a part of Manhattan that was home to an adult population that was estimated to be uninsured at a rate between 17 to 28 per cent., according to statistics published in the mayor’s plan.

The juxtaposition of the fortunes of some public hospitals, compared with some nearby independent hospitals was also glaring.

Kings County Hospital in Brooklyn, with a 13 per cent. vacancy rate for 2014, is located near Brookdale University Hospital, which had a 49 per cent. vacancy rate for 2014, despite the fact that Brookdale University Hospital has been able to obtain hundreds of millions of dollars in subsidies to keep it a going concern, according to a report published in March by City & State.

The imbalance of resources available to the public municipal hospital system, the large hospital chains, and the independent hospitals are one consequence of changes brought about by Obamacare, which makes hospitals lose money, even as some citizens are unable to afford to purchase Obamacare. Obamacare promised to expand medical health insurance coverage by reforming the purchase of healthcare insurance, instead of enacting a single-payer healthcare system.

State efforts have also contributed to the financial stresses facing Health + Hospitals, particularly after Gov. Andrew Cuomo (D-New York) mandated neoliberal economic Medicaid cuts that have also squeezed hospitals that serve patient populations that rely on Medicaid at higher rates than on commercial medical insurance coverage, as noted in the City & State report. Gov. Cuomo has even demonstrated cold indifference to the economic pressures faced by strategic teaching hospitals, such as Long Island College Hospital, which closed despite community demands that the state find a way to keep the hospital open. The closure of Long Island College Hospital also revealed duplicity on Mayor de Blasio's part, since he had campaigned for the mayoralty with assurances that no hospitals would close on his watch.

The mayor’s plan envisions restructuring the services provided by Health + Hospitals away from expensive hospital stays to greater clinic-based healthcare delivery. The making of material changes to healthcare services in New York is governed by state health officials in Albany, who certify the healthcare needs of communities. Because there are political aspects to making changes to the provision of healthcare services, it is notable that it is not known if Mayor de Blasio consulted with state healthcare officials before producing his restructuring plan for Health + Hospitals.

Several advance questions were submitted by Progress Queens to the City Hall press office, but those questions were unanswered.

An inquiry made by Progress Queens to State Sen. Kemp Hannon (R-Garden City), chair of the State Senate committee on healthcare, confirmed that Mayor de Blasio had not checked with him about the changes called for in the mayor’s hospital restructuring plan. A request made by Progress to the press office of Gov. Cuomo to determine if the mayor’s office had consulted with the governor’s office was not answered.

Given the precarious financial shape of some independent hospitals located near some of the public hospitals within Health + Hospitals, materially down-sizing the complex healthcare service provided by public hospitals almost irreversibly leads to a direction of permanently downsizing healthcare services for communities, because of the political challenges to force state officials to recertify the need for a full-service hospital for a community once existing hospitals have either been allowed to close or have agreed to voluntarily downsize into inferior healthcare facilities as a result of financial distress.

In the past, political tension between Mayor de Blasio and Albany officials have led to frustrating experiences for the mayor, most visible in how state officials have made it difficult for Mayor de Blasio to exert long-term control over the public municipal school system.

The mayor’s plan also envisions repurposing and selling some of Health + Hospital’s real property for community facilities, including for affordable housing and supportive housing. That the mayor’s plan to restructure key public municipal assets again involve the disposition of city real property worries government reform activists, particularly since some aspects of the reported, wide-ranging Federal corruption investigation of the de Blasio administration has centered on whether Mayor de Blasio has been providing city approvals to real estate developers and lobbyists, who have also acted as supporters of his various campaign committees.

To translate the restructuring plan into policy, the mayor has promised to appoint a blue ribbon panel. Information made public by the mayor indicated that that panel had yet to be appointed, but, according to a source, who spoke with Progress Queens, the panel had already been formed by mayoral staff, and that there were conflicts of interest apparent amongst some of the panelists.

Because the mayor may need to obtain state approvals for material changes to Health + Hospitals and has preëmptively created the possibility that real estate speculators may be able to bid on municipal real property, the fate of the mayor’s plan for Health + Hospitals may be unduly influenced by Albany politics and real estate forces, when what a key public health activist formerly employed for the now-shuttered St. Vincent’s Hospital told Progress Queens said that the fight should instead be about finding the dollars necessary so that Health + Hospitals, and its cornerstone healthcare facilities, such as Bellevue Hospital, can carry out the mission of providing life-saving healthcare services to New Yorkers as a matter of human right.

Mayor de Blasio’s restructuring plan envisions retraining hospital employees to become clinical employees, for example, so that there are no net job losses, and the plan also calls for maximizing enrollment in healthcare insurance, including one administered by Health + Hospitals, so that insurance coverage can pay for patients seeking services at Health + Hospitals.

Healthcare insurance industry changes, such as capitation, impose caps on payments made to healthcare providers. Mayor de Blasio’s restructuring plan for Health + Hospitals embraces such conditions, even though such conditions transfer unpredictable financial risk from healthcare insurance corporations to healthcare providers. The plan also nobly calls for stabalising and seeking new federal and state funding for the public municipal healthcare system at a time when political realities are hostile to such efforts. Indeed, even if political conditions were ideal at the present, the fiscal realities facing hospitals, public or private, have generally made it impossible for financial analysts to make reliable long-term economic projections for hospital managers, given the constant free-market pressure on healthcare insurance reimbursement rates and legislative changes to public health funding, the latter which is a function of capricious election cycles.

Reference Documents

2016-04-26 Health + Hospitals - Transformation Report [Scribd]