East End hospitals face state cuts


Eastern Long Island’s three hospitals could lose $2.8 million under the executive budget New York State Governor David Paterson has proposed. Hospital administrators fear that the cuts could mean a loss of services and programs or drive their hospitals deeper into deficit spending.

Mr. Paterson’s proposed 2009-10 budget, aimed at eliminating the largest deficit in state history, calls for slashing $1 billion in funding for hospitals, including $64.4 million on Long Island. He calls his $3.5 billion in total health care cuts a “savings package that will help rein in unaffordable growth in New York’s Medicaid program.”

His budget seeks to limit Medicaid spending to $16.0 billion. The plan provides for an increase of 3.8 percent over 2008-09, down from a planned 12 percent increase to $17.3 billion.

According to the Healthcare Association of New York State (HANYS), Southampton Hospital would lose $1.4 million under the proposed budget, and Peconic Bay Medical Center in Riverhead would lose $1.2 million. Eastern Long Island Hospital in Greenport, stands to lose $246,000. The three hospitals comprise the East End Health Alliance, through which they coordinate their operations.

“I’ve been in the business 20 years, and I’ve never seen this level of proposed cutbacks by the state in any one year,” Peconic Bay’s chief executive, Andrew Mitchell, said Monday.

Alliance spokesman Paul Connor III, the president of Eastern Long Island Hospital, said Monday that the cuts would be a mix of slashes to Medicaid reimbursement to hospitals and a shift in how health care providers are 
compensated for inpatient and outpatient care. “It’s very complicated 
and far reaching,” he said of the proposals.

The governor’s plan calls for greater funding to primary and preventive care, at the expense of outpatient care, he said.

Mr. Connor said the hospital industry agrees that outpatient care should be better funded, but it finds the premise that hospitals are being overcompensated for inpatient care unfounded. He warned that “re-basing” Medicaid dollars from hospitals to outpatient clinics will result in a funding shift away from Long Island to New York City, where there are more clinics.

The alliance hospitals are in the midst of examining how they would have to accommodate the budget if it goes through and are preparing a detailed impact report to bring to Albany later this month, Mr. Connor said. On January 27, representatives of the East End Health Alliance will join other hospital administrators from across the state for a HANYS “lobby day” in the state capital, in an attempt to persuade legislators to reject the cuts.

Mr. Connor said he is somewhat hopeful that the incoming Obama administration will provide New York with a stimulus package that will grant some relief to the state. “New York has been disproportionately affected by this financial downturn,” he said, adding that federal help could stave off Medicaid cuts.

Medicaid provides about 8 percent of patient revenue at Southampton Hospital, according to spokeswoman Marsha Kenny. And a $1,362,000 cut, as proposed, would cause the hospital’s total revenues to drop by approximately 1.6 percent.

Southampton Hospital has been operating at a deficit for several years. In 2006, it was $3.15 million, and it shrank to $1.77 million in 2007. President Robert Chaloner had predicted that the deficit could be eliminated by the end of 2009, but that goal is looking less likely as the economy spirals downward and the state tightens its belt.

“These are Draconian cuts that would have significant impact to the services of all hospitals, including Peconic Bay,” Mr. Mitchell said.

Peconic Bay provides between about $7 million or $8 million in free health care to the community to begin with, he noted. “That’s only going to rise in this period of economic downturn, as people are losing their health benefits.”

Between the cuts and the nation’s economy foundering, hospitals are in a “perfect storm,” he said.

Peconic Bay’s annual budget is about $100 million, so the governor’s proposed cuts amount to only about 1 percent of the medical center’s budget. But that is still a significant amount, the hospital executive said. “If you’re providing 7 or 8 percent of your budget already in uncompensated care, and you’re struggling every year just to break even, a 1 percent reduction equal to a million dollars is a huge reduction.”

At this point, it is too early to assess what services and jobs at Peconic Bay will have to be eliminated if the cuts are passed, Mr. Mitchell said. He said New York State hospitals have already gone through “a tremendous amount of cost cutting, staff reduction, etc., in order to become more efficient providers of services.”

“There’s not a whole lot more hospitals can give at this point,” said Michael Fraser, a HANYS spokesman, adding, that hospitals have suffered a disproportionate share of state budget cuts.

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