Statement of HHC President Alan D. Aviles In Response to Passage of National Healthcare Reform Bill
Mar 26, 2010
The new federal healthcare reform legislation is very good news for tens of millions of uninsured Americans, including those who have been denied coverage because of pre-existing conditions. However, the phase-in of expanded coverage under the new federal law does not begin in earnest until 2014.
In New York City, we are fortunate to have the nation’s largest public hospital system, which for decades has served as the next best thing to universal coverage for a substantial portion of our 1.4 million uninsured city residents. In the near term, as we await full economic recovery, the number of uninsured New Yorkers is likely to continue to rise. Even four years from now, as expanded coverage unfolds, there will still be many in our City who will remain without insurance because they can’t afford it, or because they are undocumented immigrants who are prohibited from purchasing insurance under the new legislation. In light of this reality, it is all the more critical that HHC, our city’s vast healthcare safety net, remain fiscally stable.
The New York City public hospital system is not merely the safety net for the uninsured. We run six trauma centers, two regional perinatal centers, and one burn center, while delivering nearly 25 percent of the City’s babies, providing 40 percent of the entire City’s hospital-based psychiatric care, and rendering more than 5 million outpatient visits annually.
Unfortunately, HHC faces exceptional fiscal challenges borne of several factors, including the rising cost of caring for tens of thousands of newly uninsured patients seeking care at the same time as state budget cuts have led to a nearly $250 million reduction in our annual Medicaid reimbursement. HHC is advocating strenuously in Albany against further destabilizing reductions to our Medicaid funding, and especially for critical continued access to at least the $300 million in additional federal Disproportionate Share Hospital (DSH) funding authorized in last year’s state budget. DSH funding is the lifeblood of our system and is the primary financial resource that enabled us to serve more than 450,000 uninsured patients last year.
While moving toward expanded coverage is a major milestone, we know cost containment pressures will only escalate as coverage expands. There is much work ahead to ensure that the implementation of reform results in healthcare that is not only more equitable, but also more effective and efficient. If we are going to sustain near-universal access to healthcare, we must redesign our reimbursement system so that it pays not merely based on the intensity and quantity of service provided, but on reliable measures of quality and efficacy.
Our reimbursement system must promote the best possible outcomes at the lowest possible cost and provide incentives for more effective management of the chronic diseases driving so much of our long-term healthcare costs. Embedded within the recent healthcare legislation are the seeds of such essential payment and delivery system redesign reforms, with funds allocated for pilot and demonstration initiatives to create accountable care organizations, collaborative care networks, global capitation and other promising models of more effective and efficient care delivery.
With a relatively advanced electronic medical record system, HHC is well-positioned to work with the federal government and New York State to demonstrate how a large, integrated healthcare system can render cost-effective care that improves long-term outcomes, and thereby reduces long-term costs, for our predominately low-income patients, especially those patients with chronic illnesses including asthma, diabetes, hypertension and congestive heart failure. We look forward to continuing to move aggressively toward a more cost-effective delivery system model and aligning it with a more rationale reimbursement model as the implementation of health reform unfolds.
Finally, we are heartened that the final health care reform legislation will lessen the proposed reduction of federal DSH funding that supports the mission of public hospitals and other safety net institutions. Especially in diverse urban communities like New York City, where the presence of many undocumented immigrants and other factors makes it difficult to gauge the ultimate size of the residual uninsured population post-reform, it is not clear how much DSH funding will still be needed to help keep safety net systems solvent. We must be careful that cost-saving measures such as the reduction of DSH funding, based on theoretical calculations about how many individuals will obtain coverage, do not destabilize an essential component of our nation’s healthcare delivery infrastructure.
The public system has been an essential part of healthcare in New York City during a century of previous failed attempts at comprehensive healthcare reform. We will remain indispensable to a healthy City in the post-healthcare reform era ahead.
Contact: Ian Michaels (HHC)