Governor Andrew Cuomo released his proposed state budget this week. As anticipated, it is filled with deep budget cuts, reorganization of state government, and consolidation of state agencies.
It doesn’t take a very deep reading of the budget to quickly realize that SUNY, and more importantly, University Hospital would be significantly impacted if the budget were passed as proposed. Huge hospital cuts are included:
- Complete removal of state support to University Hospital ($37.3 million per year). (These are dollars that historically have been provided to the hospital to make up for the higher costs we incur for state negotiated labor contracts.)
- Approximately $7 million in Medicaid reductions due to the Medicaid redesign initiative.
- Changes to disproportionate share payment formulas and retirement contributions, each which have multi-million dollar impacts.
To give you a perspective, all of this is on a hospital budget of about $600 million per year.
The historical and perhaps expected response from us would be to yell loudly that the cuts are huge, and that it will be impossible for us to stay in business, that we should close the doors to the hospital today, or at the very least, that we will have to stop providing key services like trauma care, burn care, Poison Control Center, and a host of sub-specialties. To me, it makes no sense to respond in this manner. I would rather step back, and ask all of us to step back, look at what’s happening in the state, and ask ourselves “what is the new Governor is trying to accomplish”? We should then try to figure out how we can be part of the solution rather than being part of the problem.
New York State is facing a serious budget deficit of about $10 billion per year. There is no question that this deficit needs to be closed, and that all New Yorker’s, employed by the state or not, will have to share in the solution. By all reasonable standards, the Medicaid expenditures in New York State are enormous in comparison to nearly every other state in the nation. Any of us who are property owners know this when we pay our property taxes, and note the line for “state mandated programs”. Clearly this has to change. At the same time, places like Upstate New York are in economic distress. This Governor needs to provide the nucleus for economic development and job growth.
At Upstate and at University Hospital we sit at the center of these seemingly conflicting goals: cost cutting and economic development/job growth. I truly believe the Governor sees the unique nature of our institution and the services we provide to an ever-increasing swath of New York State geography and citizenry. There is no question in my mind that he and his staff see us as an engine of economic development and job growth for the region. Activities like our acquisition of Community General Hospital and our goal for a 5% clinical growth and 10% research growth are vital to this economic development and job growth strategy. In my mind, and I am certain in that of the Governor and key individuals in Albany, Upstate University Hospital is not closing its doors, not going out of business, and in fact, has to grow over time.
Why then would the Governor want to take away $37 million dollars? It is important to remember that the submission of the Governor’s budget is the start of a process, not the end. As in all years, the budget will be negotiated from this point going forward. The Governor is clearly looking for leverage points in his efforts to consolidate, cut expenses, and get state workforce/benefits and other obligations under control. As these negotiations move forward, I think all of us should ask ourselves how we can be helpful. I would suggest that each of us, in our daily jobs, could find a way for University Hospital to save a dollar. We could find a way to make it easier to get the next patient into and through our system, thus enhancing our revenues. We should think creatively about everything we do, how we are organized, and look for the suggestions that will help us grow, help us implement a more regional vision while maintaining a patient focus and a laser-like attention to quality of care.
At the end of this budget season, I am certain that University Hospital will still be in business, will still be growing, and will still be providing services to a wide geography of New York State. We will be viewed as the primary driver of economic growth, development, and job opportunity in Central New York. It’s not time for us to whine about the budget woes. It is time for all of us to roll up our sleeves and collectively figure out how to make our vision and forward progress real.