New York hospitals on the verge of staff shortages, financial hardship: report

New York hospitals have reeled as they still struggle to emerge from the coronavirus pandemic – with half of facilities saying they have cut or suspended services due to staff shortages, while two-thirds said they are in the red, reveals a shocking new industry report.

“One hundred percent of hospitals report nursing shortages that they cannot fill; Over 75% said other key positions cannot be filled – directly impacting the accessibility of health services,” according to the study released Wednesday by the NYS Health Care Association.

It found that 64% of hospitals report a negative operating margin – meaning they spend more than they take in – and 85% report an operating margin of less than 3%.

According to the report, labor and other medical costs continue to rise while government support linked to the pandemic ends, meaning “the dire hospital financial crisis is likely to only get worse.”

“The continued viability of hospitals as healthcare providers and key jobs in their communities is at imminent risk,” the report said.

According to the study, 77% of hospitals report delaying or canceling construction and improvement projects due to budgetary stress — actions that could affect the accessibility of healthcare services.

One Brooklyn Health Network – which oversees Jewish hospitals Interfaith, Brookdale and Kinsgbrook – was recently the victim of a cyber-hacking incident that shut down its computer database systems.

Brookdale Hospital, One Brooklyn Health.
Brookdale Hospital, one of several in the city facing staffing and other problems in the wake of the pandemic.
Paul Martinka

About a quarter of hospitals — 27% — say they are at risk of defaulting on existing loans, according to the survey.

The warning comes as hospitals grapple with a potentially challenging winter as they face a triple hit of coronavirus, flu and RSV cases.

Some hospitals have been hollowed out by a staff exodus sparked by the grueling once-a-century COVID-19 outbreak, said Kenneth Raske, president of the Greater New York Hospital Association.

“The pandemic has been hell for the staff. They’ve had the emotional toll of seeing so many patients die,” Raske told The Post. “Some took early retirement, others stayed in the field.”

Kenneth Raske.
Kenneth Raske, head of the Greater New York Hospital Association, speaks about staffing shortages and financial struggles at local hospitals, fueled in part by the grueling coronavirus pandemic.
Shannon De Celle

Meanwhile, the COVID-19 vaccination mandate for employees also resulted in thousands leaving or being laid off, others noted.

The shortage forced hospitals to hire more contract workers, whose salaries are significantly higher than in-house staff, which “just blew spending budgets,” Raske said.

“Our hospitals continue to face relentless financial pressures, including a third-year pandemic. Without a financial margin, hospitals cannot invest in the necessary services and facilities to modernize our healthcare system. The hospital community looks forward to working with New York policymakers to address this crisis.”

The report’s release comes just weeks before Gov. Kathy Hochul will present her second state-of-the-state speech and budget plan when the Legislature reconvenes in January.

Raske said Hochul had an “excellent” understanding of the issue — this year she allocated government funds to pay bonuses for health workers as a recruitment tool.

He said he recently sat down with outgoing state budget director Robert Mujica and recommended that the state increase Medicaid reimbursement rates for hospitals to recoup costs.

Medicaid is the federally funded insurance program for those in need, but it doesn’t fully cover the cost of the services provided, hospital leaders complain.

Raske also said the state needs to spend millions of extra dollars to keep hospitals from being closed with safety nets. The state budget currently allocates $800 million to medical facilities operating in the city’s poorest neighborhoods.

Kingsbrook Hospital in Brooklyn.
Kingsbrook Jewish Hospital is part of One Brooklyn Health, a safety net hospital that faced a cybersecurity attack.
Paul Martinka

He also said Albany must step in to prevent “abuses” by commercial health insurers, which reject bills for services provided to patients at a rate of more than 20 percent — one of the highest rejection rates in the country.

Bea Grause, President of the Health Care Association of New York State: “Three out of five hospitals are under water and the fourth is on thin ice. We face the very real danger of hospitals closing, patients losing care, medical workers losing their jobs, and communities losing their lifeblood.

From 2019 to 2022, total labor costs for hospitals increased by 17%, driven by a 134% increase in hospital contract labor costs, or a compound annual increase of 33% per year.

Labor costs are not the only challenge. From 2019 to 2022, New York City hospitals reported drug costs increased 42%, supplies and equipment costs increased 20%, and energy costs increased 21%.

“Government assistance is needed now to maintain the current workforce, strengthen the pipeline of new healthcare workers, and address long-standing reimbursement shortfalls that are threatening patient access to care in communities across the state,” the report said.

Hochul spokesman Justin Mason said: “Gov. Hochul is committed to increasing New York’s health workforce and building the health care system of tomorrow, as evidenced by the historic five-year investment of $20 billion she has secured for this purpose in this year’s state budget.

“As the legislative session approaches, Governor Hochul looks forward to working with the Legislature to address many of the challenges outlined in this survey and to ensure that all New Yorkers across our state have access to quality health care.” New York hospitals on the verge of staff shortages, financial hardship: report


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