Fiscal Year 2020: Executive Preliminary Budget Hearing | NYC Health + Hospitals

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Fiscal Year 2020: Executive Preliminary Budget Hearing

Mitchell Katz, M.D., President and Chief Executive Officer
Monday, March 25, 2019



Good afternoon Chairperson Rivera and members of the Committee. I am Mitch Katz, M.D., President and Chief Executive Officer of the New York City Health + Hospitals (“Health + Hospitals”). Thank you for the opportunity to review the FY2020 Executive Preliminary Budget for Health + Hospitals.

It has been an amazing year at Health + Hospitals. We have made great progress executing on the Mayor’s transformation plan. In line with the Mayor’s plan, we are on target to achieve $757 million in revenue-generating initiatives and $430 million in expense-reducing initiatives. Through Q2 of FY 2019, patient care revenue is up $80 million versus this time last year, driven by improved billing and better performance in our value based managed care contracts and we and are just $10 million (or .5%) below the ambitious target we set for this year’s budget. While we have seen a 3.8% decline in inpatient utilization, much of that decline comes in our value-based contracts. That means that, as we do a better job keeping patients healthy, they require few hospital visits, and we capture incentives and additional revenue from health plans. We have many important revenue initiatives just getting off the ground and we expect our EPIC electronic health record and financial system – which is coming on line across all our hospitals this year – to significantly improve our revenue going forward.

On the expense side, we are less than $25 million (or 1%) over our budget due to important investments we have made to improve patient care and to generate revenue in the years ahead. We hired over 340 net new nurses to make sure we deliver the safest and highest quality care possible. We also invested in new staff to improve our ability to bill and collect money from insurance companies. We have offset our investments in new clinical- and revenue- generating staff by reducing the number of temps in our system, eliminating consultants, and making some managerial-level staff reductions. I have made clear to our senior leadership and administrative staff across the system that our number one priority is to invest in patient care and our front-line staff.

A year ago, at my first opportunity to appear before this Committee, we spoke about the concerns around ongoing deficits and how Health + Hospitals would respond to the challenges we face. A year later, despite risks posed by the Trump Administration, Health + Hospitals maintains a balanced five-year financial plan and is well positioned for stability and success. We are investing in new sites and in our current facilities. By the end of 2021, we will have built three new one-stop-shop community health centers in Jackson Heights in Queens, Tremont in the Bronx, and Bushwick in Brooklyn. We are also investing in needed repairs and improvements, including the $52 million in planned capital investment at Metropolitan Hospital. And thanks to the Mayor and members of this Committee’s generous support, we’re making important improvements to Woodhull, Elmhurst, Kings, Roberto Clemente and many of our other facilities.

Building on the great work the Mayor’s Get Covered initiative has done around the city, we are signing up more New Yorkers up for insurance inside of our hospitals. We have increased the number of insurance applications made by our patients by 20% to over 23,000 applications per month. This is great for our patients, who now have the security of knowing their care is covered, and it is great for Health + Hospitals, as we generate an anticipated $40 million in additional revenue this year.

We are getting better at the hard work of billing insurance companies. We have improved at every step of the process – from negotiating better rates with health plans, to more accurately documenting and coding the care we provide, to sending bills more quickly, to collecting the revenue we are owed. Our revenue cycle efforts yielded $150 million in FY 2018 This year, we are on track to achieve over $200 million in revenue – a huge step forward.

We are also improving the patient experience and investing to make sure we better meet our patients’ needs. We have hired 40 new primary care providers, streamlined our operations, and reduced our wait times – patients can now see a primary care provider within one to two weeks. We are investing to make specialty care easier to access at Health + Hospitals. This includes expanding our E-consult system for specialty referrals, hiring new specialists, and adding new clinical services in areas like interventional cardiology, stroke care, and HIV care.

While we are headed in the right direction, we have a lot more work ahead. We need to continue to make the system as great as the people in it, and make it easier to use and more efficient to run. We need to continue to make it easier to get an appointment, to make sure our call center and customer service meets our patients’ needs, and to expand eConsult to all of our specialty clinics. We need to complete our EPIC health record and financial system roll out by the end of this year and to continue our efforts to ensure managed care plans treat us fairly. We also need to deliver on key new initiatives, like opening up retail pharmacies inside our hospitals, opening new ExpressCare urgent care sites to reduce avoidable emergency room visits, and to create a more streamlined transportation system to move patients between facilities in our system.

Great risks remain due to the federal government. The President’s budget would slash Health + Hospitals’ revenue by billions of dollars. Health + Hospitals is already facing potential Medicaid disproportionate hospital share cuts of over $400 million in federal funds the coming year, beginning October 1, 2019, and $600 million in each of the subsequent five years. The President’s budget not only maintains those cuts, but it makes the situation much worse with deeper cuts to Medicare and Medicaid. We are grateful for the past support the Council has provided in opposing these cuts and look forward to working with the Council again to advocate against these cuts.

Additionally, the Department of Homeland Security’s (DHS) proposed public charge rule could impact 350,000 Health + Hospitals patients and affect the public health system financially. In the fall, we launched an aggressive advocacy campaign opposing this cruel rule, along with other City agencies, and are currently awaiting DHS’s decision. The bottom line is – nothing has changed at Health + Hospitals and our patients should continue to seek care without fear at our facilities.

On the State side, the Governor and the Legislature are still negotiating the final details of the budget for the upcoming State fiscal year, which begins on April 1. We are partnering with the Greater New York Hospital Association and other hospitals in our advocacy efforts. It’s still unclear how the final budget will address the pending federal DSH cuts, which are slated to begin on October 1. The bottom line is the enacted State budget must protect public and safety net hospitals that serve the most vulnerable New Yorkers.

Despite these risks, I strongly believe that this will be another great year for Health + Hospitals. We are proud to play a key role in the Mayor’s Guaranteed Care Initiative. NYC Care, our new program for New Yorkers ineligible for insurance or unable to afford the options on the exchange, will begin in the Bronx this summer and will roll out to the other New York City boroughs by 2021. MetroPlus, the city’s public option, is developing new partnerships with other city agencies, adopting new outreach and enrollment-assistance strategies, and establishing new and improved member service options to better serve existing members as well as the estimated 300,000 uninsured New Yorkers who are currently eligible for coverage.

Thank you to this Committee for your tremendous support of Health + Hospitals and for making my first year back in New York so rewarding.