Monday, January 5, 2009

"Help your hospital"

No question: Governor Patterson and the State Legislature face a huge task as they address the multi-billion dollar shortfall in the 2009-2010 state budget.

In an earlier posting, I alluded to concerns expressed by the Syracuse hospitals about the state’s budget, even before the Governor announced his proposed taxes and cuts. A newspaper story about hospitals' concerns, prompted a response from the Commission of Health that, in turn, resulted in a follow-up by the Hospital Executive Council.

In mid-December the Governor unveiled the budget proposal, one month earlier than customary. The proposal included a complex series of reductions and increases that would generate a net reduction in state health care spending of some $3.6 billion in the coming fiscal year.

The impact on Community General Hospital next year would be to reduce overall revenue by some $636,000. For all four Syracuse hospitals, the cumulative hit would amount to a negative $5.4 million, the majority of it affecting Crouse Hospital.

Help Your Hospital is a new website, sponsored by the Healthcare Association of New York State (HANYS), that allows the public to see the impact of the state budget on each and every hospital. It also provides a way for anyone concerned about the impact on the local hospital to communicate about it with elected officials.

With the budget complexity, it may not be obvious that one of the Governor’s proposals is a tax on hospitals – not on hospital profits but on overall revenue (“gross receipts”). That means not-for-profit hospitals in New York State would have to pay a 0.7% assessment on every dollar they receive, i.e., $7,000 for each $1 million of revenue.

As non-profits, New York’s hospitals don’t generate a return for any owners or shareholders. They are tax-exempt facilities operated in the public interest. Many hospitals do not have funds left over as a positive bottom line at year-end. For example, in 2008 every dollar of the approximately $120 million Community received was used to pay nurses, doctors, and other employees; to buy medical and surgical supplies; to pay utility bills, insurance premiums, and maintenance, etc. There was nothing left at year-end for reinvestment in Community's patient care, and there is nothing left in our budget for 2009.

Yet, if the Legislature passes the state budget, as proposed, Community will have an additional expense of some $636,000, representing the net effect of the Medicaid cuts, the revenue tax, as well as offsetting revenue increases.

The Help Your Hospital website allows anyone to look up the impact a hospital has on its local economy -- and it makes it easy to send a letter to members of the Legislature.

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