Hospital leaders warn of possible layoffs without federal support

August 13, 2020

By Shannon Young

08/12/2020 03:39 PM EDT

Hospital leaders warned Wednesday that, absent federal support to offset coronavirus-related revenue losses, facilities across New York could be forced to lay off workers who helped shepherd the state through the height of its Covid-19 outbreak.

Greater New York Hospital Association President Kenneth Raske and Healthcare Association of New York State President Bea Grause told Senate and Assembly lawmakers that the suspension of elective medical procedures, an increased number of Medicaid recipients and a drop off in routine care due to the pandemic have left hospitals in dire financial straits.

While New York hospitals have received about $9 billion in federal support, Grause said, that funding is “just a drop in the bucket” when facilities across the state are expected to see up to $25 billion in losses and new expenses by April 2021, according to one analysis completed for HANYS.

That shortfall, she testified, will only exacerbate hospitals’ “already precarious financial situation.”

Raske said that while the federal government stepped up to provide initial support, “that will not carry the day totally on this issue.”

“Here’s the bottom line: Every hospital in New York state is going to lose money this year. The question is, how much?” he said at the Legislature’s joint public hearing on Covid-19’s impact on hospitals.

GNYHA is lobbying for state and local relief that will help stabilize New York’s budget, Raske said. Hospitals across the state, however, are already looking at ways to cut costs, including potential layoffs.

“Think of the conundrum that we’re in: We just asked our staff to do heroic things and now we’re going to turn around because our revenues have collapsed? And we’re going to turn around and send out a layoff notice?” he said. “How terrible is that?”

Contending that “additional provider cuts are unthinkable,” Grause further cautioned that state cuts to Medicaid would effectively be doubled through the loss of federal matching funds and could result in the loss of needed health care services throughout New York.

New York City Council Member Carlina Rivera, who also testified at the daylong hearing, agreed that additional cuts — like those being floated in Albany — “would be devastating.”

“A 20-percent cut would be catastrophic considering how our communities of color, specifically, with those underlying conditions, we always knew that they deserved more funding,” she told lawmakers. “To cut those services now, I think, would be such a disservice to every New Yorker because we see similarities in other cities and towns and villages all over New York state.”

Rivera further called for more transparency around how federal funding has been allocated to New York hospitals.

Elisabeth Benjamin, vice president of health initiatives at the Community Service Society, cited a recent CSS analysis of CARES Act funding that found while NYC Health + Hospitals received $68 million per hospital, New York Presbyterian, alone, got $570 million.

“That’s not fair,” she said. “It’s just not a correct allocation. It’s also misallocated around the state.”

The Legislature, which heard testimony as part of a series of hearings on Covid-19’s impact on New York, is grappling with how to close a $14 billion budget hole this year — and a $16 billion gap in the next year.

Gov. Andrew Cuomo has offered federal actions will influence whether New York moves forward with 20 percent cuts to localities, education and health care.