Bulletin #13: June 15, 1999
Hospitals want still more money. How much is enough?
How much could ever be enough money for New York hospitals? Based
on the complaints from the hospital lobbyists and unions, there seems to be
no answer. After all, New York is already the leader in state spending on hospitals,
well ahead of larger states such as California and Texas. As of 1997, the $3.3 billion
Albany spent on hospitals represented more than 11 percent of the total for
all states. Our population was less than 7 percent of the nation's.
The hospital establishment says those billions of dollars are not enough - and that we
certainly can't reduce our sky-high hospital spending, not even just a little. Doing so,
they claim, would force massive layoffs of direct-care workers and diminished quality of
care. Yet private-sector hospital employment is growing - by 2,800 jobs in the past
year. The new growth comes after repeated "the-sky-is-falling" warnings from the
hospitals. Meanwhile, more care is being delivered outside institutions, and jobs are
growing there, too.
Take the 'devastation' claims with a grain of salt.
The hospital lobby's cry of devastation is getting old - literally, as well as figuratively. For a
decade or more, the hospital representatives have been claiming disaster was right around the
corner (and, surprisingly, their claims are still credited by some of the state's leading newspapers).
But there's no denying that the bottom line for many hospitals improved significantly
during the mid-1990s. Voluntary, proprietary and public hospitals statewide had a net
profit of $97 million in 1994, Health Department data show. That figure rose steadily in
following years, producing a cumulative total of some $2 billion for the 1994-97 period.
The Greater New York Hospital Association says its member hospitals had a total
margin of 1.8 percent in 1998, excluding unrealized investment gains and certain capital
assets. That figure was down from the previous year, but still represents tens of millions
of dollars in profits.
Now, the hospitals are again predicting devastation. They say the solution is not only to
reject Governor Pataki's new cost-saving reforms, but to reverse those that the
Legislature enacted on a bipartisan basis four years ago. The 1997 and 1998 data show
that institutions have done pretty well, thank you, under the existing Medicaid rules.
How can anyone seriously argue that we have to go backward now?
