This week, we began the annual process of working through the proposed budget for the State of New York. On Tuesday, Governor Custom delivered his budget address. This is followed by release of a large list of documents relating to the budget that one can find at the Governor’s website
The budget process is an interesting and complicated one. The Governor’s executive budget will now undergo some modifications both by the Governor and ultimately by the legislature. Eventually, a budget will be passed along with the enabling legislation that is required. Historically, until Governor Cuomo came into office, New York State budgets were always late. Even though we expect an April 1 budget, it was often August, September, or October before budgets were finalized. During the Cuomo administration, budgets have been produced on time, and so there is an expectation that all of the budget wrangling and advocacy efforts will be over by April 1.
There are numerous healthcare provisions in the Governor’s budget that will impact us. I have attached two analyses, one from the Medical Society of the State of New York, and one from the Healthcare Association of New York State. These briefly review many of the provisions that will impact the healthcare industry.
Of particular note for us is the SUNY and SUNY Hospital proposed budget. The budget for SUNY overall is proposed to be flat with 0% increase. The budget in dollars for the three SUNY hospitals is budgeted to go from $88M in the current fiscal year to $60M in the next fiscal year. Were there to be no change in this, it equates to about a $9M cut in support for University Hospital.
One might ask why does University Hospital get any support at all? Is the University Hospital share of the $60M allocated to the three SUNY hospitals sufficient? The history of direct state subsidy/support is that it was initiated a number of years ago to help the hospital to cover the excess costs associated with its unionized labor force, and with union negotiated contracts in which the hospital has no participation. Over the years, as labor costs have risen, this subsidy has shrunk and the gap between the two has grown. Recently, especially with increasing pension costs to University Hospital, the gap continues to rise. While we at University Hospital are grateful for any support that is provided to us to help ensure that we can continue to operate and meet our missions, I think all of us at University Hospital wish the level of support was commensurate with the mandated costs.
We will continue to look at the impact of such a cut. We will continue to lobby to see if additional dollars can be allocated either through the State or through SUNY to help support the hospital. While this cut by itself may not mandate program closures, program consolidations, or a reduction in workforce, the combination of all the cuts that we are subject to from state, from federal government, and from the insurance industry will eventually cumulatively force us to make programmatic cuts and/or reduction in work force. We continue to diligently find ways to save dollars, to increase revenues, and to work smarter for our patients in Central New York. The issues we have are not unique. The proposed reduction in state support simply exacerbates them, and will force us work smarter to find solutions.