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NYC Hospitals Corp. announces cuts

March 19, 2009 3:49:58 PM PDT
The New York City Health and Hospitals Corporation on Thursday announced a plan to reduce its next fiscal year budget by $105 million to address unprecedented financial challenges. Officials say those challenges were created by a $66 million cut to HHC's Medicaid reimbursement already imposed by the state this fiscal year, along with growing expenses resulting from a sharp spike in uninsured patients, increased wage and fringe benefits and the rising costs of drugs and medical supplies.

The gap-closing plan contains projected savings from operational efficiency measures, improved revenue collection,and targeted service reductions that include closing or downsizing 10 hospital-based and 10 community-based programs, and reducing the HHC workforce by approximately 400 positions through attrition and layoffs to take effect by July 1, 2009.

The cutbacks are only the first round of reductions that will be implemented to address a $316 million shortfall for the coming fiscal year.

The city's public hospitals, nursing homes and health clinics also face proposed state Medicaid cuts that would widen the budget gap for the next fiscal year by as much as another $300 million.

"HHC is the single largest healthcare safety net in the state," HHC president Alan Aviles said. "It cost nearly $850 million to care for the 450,000 uninsured New York State residents without health insurance who relied on our services last year. The City of New York has contributed more than $500 million annually to support the cost of serving the uninsured, while the State contributes a mere $50 million."

The HHC plan includes savings of:

  • $23.3 million from operational and procurement efficiencies
  • $34.4 million from optimizing revenue collection
  • $20.3 million from cost reduction measures such as ending consultant contracts, curbing use of per diem staff and cutting the health marketing and advertising budget
  • $26 million from service reductions, staff attrition and layoffs

    The cost-cutting actions most directly affecting service delivery include the closure of:

  • 4 school based mental health programs
  • 4 community clinics
  • 3 satellite pharmacies
  • 2 hospital-based case management programs
  • 2 mental health day treatment programs
  • 1 hospital-based therapy program for TB patients.

    Three other hospital-based programs will be consolidated with reduced staffing for greater efficiency. The service reductions focused on programs that are disproportionately under-funded and would have a limited impact on patients.

    The workforce reduction target of 400 will be reached by not filling approximately 200 expected vacancies over the next three months and 200 layoffs that will occur between now and July 1, 2009, the beginning of HHC's new fiscal year.


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