Zack Hutchins
Director of Communications

For Release — Wednesday, March 17, 1999


ALBANY—The Business Council of New York State, Inc. today called on lobbyists for hospitals and health-care worker unions to "stop scaring New Yorkers" with false claims about impending changes in the hospital industry.

"Once again, the hospital lobbyists and unions are spreading fear instead of facts," said Daniel B. Walsh, president/CEO of The Business Council. "It's one thing to make your best case to the Legislature on the merits. But trying to panic elderly and sick people is simply wrong. It's time for the hospital establishment to stop scaring New Yorkers needlessly."

The Business Council released letters Walsh sent today to leaders of the Greater New York Hospital Association, the HealthCare Association of New York State and Local 1199 of the National Health and Human Service Employees Union.

The union and the hospital lobbying organizations have mounted major advertising campaigns aimed at preserving the nation's most costly taxpayer subsidies for hospitals. A political consultant advising the coalition told The New York Times last week that the groups are "prepared for a multi-million-dollar campaign."

"Some of the claims that have been made, in the name of hospital spending, are truly irresponsible," Walsh said. "Unfortunately, that's been going on literally for a decade now."

Kenneth Raske, president of the Greater New York Hospital Association, told the New York Post recently that, as a result of potential funding reductions, "You're going to see massive service cutbacks" in hospitals. Speaking of President Clinton's budget proposal released in early February, Raske told the Daily News: "We're going to need a bailout for New York hospitals in the near future. The sad part of the whole thing is how it affects the poor and the elderly."

Walsh said The Business Council has reviewed Raske's statements from previous years, and found that this year's apocalyptic warnings are "remarkably similar" to comments made as much as 10 years ago.

In early 1989, when then-Governor Cuomo proposed cost-saving reforms to Medicaid, Raske told Newsday: "We're facing the financial dismantling in one or two years of institutions that took 120 years to build."

In December of that year, the hospital association called for an immediate, $300 million bailout from taxpayers. "If we do not get it, I absolutely forecast major layoffs and service shrinkage," Raske told Crain's New York Business at the time.

In 1990, Newsday quoted Raske, then asking for a $450 million bailout: "Our hospitals have become like patients on life-support systems. But no one is stepping forward with the aggressive therapies that would put us on our feet again."

In succeeding years, Raske kept up the drumbeat:

Data from the U.S. Bureau of Labor Statistics show that hospital employment throughout New York State in 1998 averaged just over 392,000 - down less than 1 percent from a decade earlier. In fact, employment at private, state and local government-funded hospitals grew for years after Raske's 1989 predictions of "major layoffs." Hospital employment peaked at 422,000 in 1993, and has declined modestly in each of the five years since. Overall employment in health care has continued to grow, however, as the industry has shifted away from institutional care.

"The fact is that New York's taxpayers support the most generous health-care system in the nation," Walsh said. "It's also the most costly system. And taxpayers shouldn't have to continue bearing that huge cost."

New York's per-capita spending for Medicaid, $1,352 in 1997, is more than double the national average. The state spent nearly as much on Medicaid in 1997 as did the combined states of California and Texas - each of which has more residents than New York. Governor Pataki's Executive Budget would reduce Medicaid costs for both the state and county taxpayers, while leaving Medicaid funding at the most generous level in the country. Overall Medicaid spending in the coming year would total $29.1 billion in the coming year, up 21 percent from five years ago, with no new reforms. Under the Governor's budget, Medicaid costs would still rise to $28.1 billion, or 17 percent higher than five years ago, according to the state Budget Division.

"The health-care industry is evolving from a high-cost focus on hospitals and other institutions, to higher-quality and more affordable forms of care," Walsh said. "Most hospitals recognize the change and are keeping pace. Contrary to what some would have us believe, there is no 'emergency' in New York's health-care system."

Despite some reductions in recent years, New York's hospital system is still far larger, even after adjusting for population differences, than those in most other states. As of 1996, New York had 4 hospital beds for every 1,000 residents; that was 21 percent higher than the national average.

"If the hospital associations and unions are willing to lift their rhetoric out of the sandbox, we can engage in real debate about the best ways to reduce the high cost and improve the quality of health care for New Yorkers," Walsh said.