Hospitals Warn Against Paterson's Cuts

A health care industry group warns that medical services in New York would be cut and access to treatment would be more limited if Gov. David Paterson's proposed budget cuts for Medicaid and health care are enacted.

The Hospital Association of New York State issued data Sunday showing that Paterson's proposal would cut more than $771.5 million from hospitals in the next two years.

"We're making these deep cuts, and since 60 percent of the cost of the hospitals is staff, and since we already have a staff shortage, there's literally no way to accommodate this unless you cut services," HANYS president Daniel Sisto said. "We need to find out what services would be reduced."

The new data offers a breakdown of losses by region, and includes how much individual hospitals would lose. For example, Montefiore Medical Center in New York City would lose more than $7.1 million. Strong Memorial Hospital in Rochester would lose about $3.1 million and Erie County Medical Center in Buffalo would lose about $1.5 million, according to the association.

Paterson spokesman Jeffrey Gordon says the state Division of Budget is still reviewing the numbers released by the hospital association.

"Governor Paterson has said that the only way to overcome this unprecedented crisis is through shared sacrifice, and he proposed a plan that reduced spending in virtually every area of the state budget," Gordon said. "The savings he proposed in hospitals represent only one-half of one percent of the hospitals' revenues."

New York City hospitals alone would lose $505 million in the next two years, and $121.7 million before the end of this fiscal year March 31. The association put together the report to inform hospitals around the state of what they could expect to lose if Paterson's recommendations go into effect. The hospitals are expected to report back to the association with plans for what they would cut.

Paterson's proposal would cut reimbursements to hospitals in Medicaid, a double whammy because the federal government matches every Medicaid dollar. So for every dollar the state cuts, hospitals lose two, Sisto said.

New York spends $2,283 per person on Medicaid -- more than any other state in the country and more than twice the national average of $1,026. Despite the cuts, Medicaid spending would still grow 1 percent -- $144 million -- from the 2007-2008 fiscal year to the current fiscal year. Paterson's plan would set total Medicaid spending at $15.3 billion.

The midyear cuts are particularly challenging for hospitals because they have already planned their budgets for the year, Sisto said.

"We've already provided (pay) increases to the nurses, pharmacists and staff at our institutions," he said. "So we can't go back and take those costs out. There's no way at this point in the year to adjust for cuts of this magnitude."

The HANYS study only reflects the $771 million in cuts to Medicaid fee-for-service programs. Millions more would be cut from managed care programs. Data on their cost and proposed savings were not yet available.