Federal COVID-19 relief funds distributed during the pandemic have provided critical financial support to New York City Health and Hospitals (H + H), but reliable funding and timely payments from all government sources are needed to maintain the nation’s largest fiscal health system, according to a report released today by state comptroller Thomas P. DiNapoli.
“H + H’s core mission of serving all city residents, including the most vulnerable, puts the system under constant financial strain. The pandemic has only added to this challenge, ”said DiNapoli. “H + H administrators took steps to shore up the finances of the system, and federal funding provided critical relief when COVID first hit New York City. Senate Majority Leader Schumer and the New York City Congressional delegation fought hard to get H + H the money it had from the Federal Emergency Management Agency , which should contribute to critical cash flow. Going forward, however, the system needs help from all levels of government to stay solvent and prepare for future emergencies. “
The challenges facing H + H are daunting. Its patient base reflects the underlying socio-economic and health disparities in the city. Likewise, more avoidable hospitalizations and lower health care coverage rates are more likely in low-income communities, where the majority of H + H patients live. These communities were also more likely to have people with underlying conditions that increase the risk of contracting and having severe cases of COVID-19.
Pandemic-tested operations and finances
At the start of the pandemic, H + H struggled with shortages of supplies and the capacity of emergency rooms and intensive care, particularly at Elmhurst Hospital. However, as the pandemic unfolded, H + H took on an important role in planning and responding to the city’s public health emergency.
H + H faced structural fiscal challenges before the pandemic, including declining service utilization, reduced federal funding, and a large portion of uninsured and Medicaid-insured patients who are, on average, less likely to reimburse H + H for the full cost of the services. H + H’s ability to manage its finances and balance its budget has required regular grants from federal, state and municipal governments.
The crisis created by the COVID-19 pandemic came as H + H stabilized its financial situation through its transformation plan. Since 2015, H + H has implemented initiatives under this plan to reduce costs and increase revenue collection by improving billing procedures, negotiating higher insurance rates and attracting and retaining customers. patients.
The pandemic has put more pressure than ever on H + H and has strained the physical and human resources of its facilities. He acted early to expand capacity, increase telehealth to treat patients remotely, and launch new initiatives such as the Test & Trace Corps. The system hired 1,305 technical specialists and hired 4,000 nurses to handle increased operational demands.
As of June 23, 2021, H + H had administered one million vaccines (11% of vaccines given in the city), 76% of which were given to people who identify as belonging to ethnic or racial minorities. This compares to 73% for independent hospitals and 56% for other hospital systems in the city.
H + H estimates that the total costs related to its COVID-19 response will reach $ 2 billion through fiscal year (FY) 2022, excluding $ 3 billion in costs for the Test & Trace program. Total COVID-related spending is also expected to increase as new variants continue to spread, which will continue to strain the system’s finances.
Critical government support
Receiving federal COVID-19 relief funds early in the pandemic helped support H + H’s financial position in the short term, as they provided direct support for activities related to the public health emergency. The pandemic-related costs of $ 788 million in fiscal 2020 were offset by receiving more than $ 1 billion in relief funds for providers. However, subsequent delays of $ 590 million in reimbursing FEMA created financial pressure. While these funds have received preliminary approval, it is not known when the funds will be released to H + H.
Federal aid enabled H + H to end fiscal 2020 with a closing cash balance of $ 688 million and largely meet its profit target for the year as part of its transformation plan . In total, H + H achieved $ 1.3 billion in savings in fiscal 2020.
The longer-term outlook for federal support for H + H also remains uncertain. Federal legislation passed in 2020 caused another delay in planned reductions in additional Medicaid payments, which are expected to return in fiscal year 2024. In order to reduce uncertainty about its future funding levels, H + H has worked with federal, state and city government. governments to update the way H + H will receive certain additional Medicaid payments, with the goal of not only providing additional revenue, but also getting the payments on a more reliable and consistent schedule. However, these payments have not yet received federal approval.
H + H’s most recent financial plan estimates that H + H will realize savings of $ 747 million per year from previous cost reduction efforts starting in fiscal 2021, and $ 1.2 billion in new ones. savings, including $ 611 million in additional new Medicaid payments. In addition, the budget assumes that planned reductions in additional federal Medicaid payments of $ 580 million will be delayed. City-funded support for H + H is expected to exceed $ 2 billion in fiscal years 2022 to 2025, compared to $ 1.3 billion per year between 2012 and 2015.
The DiNapoli report stresses the importance of providing reliable and timely payments from all levels of government in the future. He also recommends that H + H continue its efforts to improve billing and coding, work with insurance companies to increase reimbursement rates, retain new patients won during the pandemic, promote primary care and preventive measures in underserved communities and plan for future health crises.
Report
NYC Health + Hospitals Check Up: The Impact of COVID-19
Track state and local government spending at Open Book New York. As part of State Comptroller DiNapoli’s open data initiative, search millions of state and local government financial records, track state contracts, and find the most requested data.
