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New York hospitals are reeling as they still struggle to emerge from the coronavirus pandemic — with half the facilities reporting they slashed or eliminated services because of staffing shortages while two-thirds said they’re operating in the red, a shocking new industry report reveals.
“One-hundred percent of hospitals report nursing shortages they cannot fill; over 75% said that other key worker positions cannot be filled — directly impacting the accessibility of healthcare services,” said the study released Wednesday by the NYS Health Care Association.
It revealed that 64% of hospitals report a negative operating margin — meaning they’re spending more than they’re taking in — and 85% report operating margins of less than 3%.
The report said labor and other medical costs continue to rise while pandemic-related government assistance is ending, which means “hospitals’ dire fiscal crisis is likely to only get worse.”
“Hospitals’ continued viability as healthcare providers and key job creators in their communities is in immediate jeopardy,” the report said.
The study said 77% of hospitals report delaying or canceling building and improvement projects as a result of fiscal stress — actions that could erode the accessibility of healthcare services.
The One Brooklyn Health Network — overseeing Interfaith, Brookdale and Kinsgbrook Jewish hospitals — was recently victimized by a cyber hacking incident that shut down its computer data base systems.
About one-quarter of hospitals — 27% — report being at risk of defaulting on existing loans, according to the survey.
The warning comes as hospitals grapple with a potentially challenging winter as they confront a triple whammy of coronavirus, flu and RSV cases.
Some hospitals were hollowed out by a staff exodus precipitated by the grueling once-in-a-century COVID-19 outbreak, said Kenneth Raske, president of the Greater New York Hospital Association.
“The pandemic was hell on the staff. They had the emotional toll of seeing so many patients die,” Raske told The Post. “Some took early retirements and others left in the field.”
Meanwhile, the COVID-19 vaccine mandate for staffers also caused thousands to leave or be fired, others noted.
The shortage forced hospitals to hire more contract workers, whose salaries are significantly higher than in-house staff, which “just blew out the expense budgets,” Raske said.
“Our hospitals continue to face relentless financial pressures, including a pandemic in its third year. Without a financial margin, hospitals cannot invest in the necessary services and facilities to modernize our healthcare delivery system. The hospital community looks forward to working with New York’s policymakers to address this crisis.”
The release of the report comes just weeks before Gov. Kathy Hochul unveils her second State of the State address and budget plan when the legislature reconvenes in January.
Raske said Hochul has been “terrific” in grasping the problem — this year she set aside state funds to pay health care workers bonuses as a recruitment tool.
He said he recently sat down with outgoing state budget director Robert Mujica and recommended that the state increase the Medicaid reimbursement rates to hospitals to help recoup costs.
Medicaid is the government-funded insurance program for the needy but it doesn’t fully cover the costs of services provided, hospital executives complain.
Raske also said the state has to cough up millions of additional dollars to keep safety net hospitals from closing. The state budget provides $800 million in the current budget to medical facilities that operate in the city’s poorest neighborhoods.
He also said Albany needs to intervene to prevent “abuses” from commercial health insurers, who deny bills for services provided to patients at a rate of more than 20 percent — among the highest refusal rates in the country.
Bea Grause, president of the Health Care Association of New York State: “Three out of five hospitals are underwater, and the fourth is on thin ice. We face a very real danger of hospitals closing, patients losing care, healthcare workers losing their jobs and communities losing their lifeblood.
From 2019 to 2022, overall labor costs for hospitals increased by 17%, driven by a 134% increase in hospitals’ contract staffing costs, or average annual increase of 33% per year.
Labor costs aren’t the only challenge. From 2019 to 2022, New York hospitals said drug costs shot up 42%, supply and equipment costs went up 20% and energy costs surged 21%.
“Government help is needed right now to sustain the current workforce, bolster the pipeline of new healthcare workers and fix longstanding reimbursement shortcomings that threaten patient access to care in communities across the state,” the report said.
Hochul spokesman Justin Mason said, “Gov. Hochul is committed to replenishing New York’s healthcare workforce and building the healthcare system of tomorrow, which is evidenced by the historic five-year $20 billion investment she secured for this purpose in this year’s state budget.
“As the legislative session approaches, Gov. Hochul looks forward to working with the legislature to address many of the challenges described in this survey and ensuring that all New Yorkers have access to high quality health care throughout our state.”
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