It”™s estimated one in five New York residents is on Medicaid.
A reflection of the economy and of the aging population, Empire State hospitals have had no choice but to adapt and provide continuous care amid funding cuts.
“We began this calendar year with a significant deficit,” said Kevin Dahill, president and CEO of the Northern Metropolitan Hospital Association (NorMet), representing 30 member hospitals in the Hudson Valley region. “Medicaid reimbursements to hospitals were already cut 2 percent. What”™s been debated as we speak in Washington comes on the heels of what”™s already occurred. Hospitals have already had to make cuts in their budget.”
With looming federal reduction in payments to the state, medical facilities will need to examine programs, services and staffing to make up for losses.
“What we”™ve done, as most other hospitals in New York state, is to revamp the way we look at our operations,” said Murray Askinazi, senior vice president and chief financial officer of Lawrence Hospital Center in Bronxville, a Columbia Presbyterian Medical Center affiliate. “We”™re not a large Medicaid hospital, but we will be impacted somewhat by it.”
Lawrence Hospital is looking for ways to streamline its costs and to better utilize its staff.
“We”™ve also put efforts into areas like the ER, which has drawn a significant amount of patients from beyond our traditional zip codes of Bronxville and Yonkers.”
Focusing on its core mission
Westchester Medical Center, a former county hospital now operating as a public benefit corporation, completed a successful debt offering last year and raised $125 million. But, the hospital operates today with a $100 million reduction in annual reimbursements from the county.
“Since this whole economic decline has started, we”™ve gotten out of certain services that are not part of our core mission in providing tertiary care to (the) region,” said Gary Brudnicki, senior executive vice president and chief financial officer of Westchester Medical Center.
He ticked off the demise of service to the Westchester County Correctional Facility infirmary and the shuttering of a hospital-run nursing home.
“We”™re looking closely at all of our expenses,” Brudnicki said. “We have not had any cuts in staffing recently, but we did lay off (non-direct patient care) staff over the past 24-30 months.”
Many costs stem from built-in mandates.
“In 2006 when I got here, there was a $19 million pension expense,” Brudnicki said. “For 2013, it”™s forecasted to be $75 million. We”™re trying to figure out how we can continue to pay this invoice New York state sends us.”
Expanding to meet a growing demand
Dahill said hospitals have had to look at every single entity they”™re doing business with, from who they buy from to who fixes their equipment.
“We”™ve done an incredible amount of work in dealing with our vendors,” Brudnicki said. “We”™ve participated in a variety of joint purchasing arrangements with a variety of hospitals, standardizing some of the medical supplies, which has probably saved us from $8 million to $10 million a year.”
The hospital has just released a strategic plan for 2011 to 2014 that includes a course of action and upgrades to the 1977-constructed campus.
This includes a renovation to the main hospital, the installation of a trauma center and intensive care unit between the children”™s hospital and Macy Pavilion and a medical office building connecting the main hospital to a comprehensive care center.
Brudnicki estimated the hospital has invested about $100 million for the last six years to fund capital needs.
The hospital is also addressing the demand for services.
“What we”™re seeing in the Hudson Valley is ER volumes that have increased,” Dahill noted.
He referred to an influx of patients who have an underlying problem that could have been treated by a primary care physician, but the number of such doctors is dwindling in the county with the trend toward specialized practice.
In addition, that patient number increases when a clinic closes early or a physician doesn”™t accept Medicaid patients. In many instances, an infection or flare-up means a trip to the emergency room, an “inappropriate and very expensive setting,” he said.
Westchester Medical Center”™s emergency room was constructed to handle about 22,000 patients a year; that number is now 44,000 and growing.
“If you call me later today, there will be about 50 or 60 patients waiting to be seen in the emergency room,” Brudnicki said. “It”™s grown substantially. We”™re planning an expansion, which will be a three- or four-year project. It”™s a major need at the medical center.”
