In some of the poorest neighborhoods of Brooklyn, some hospitals are struggling thanks to Medicare and Medicaid not keeping up with growing hospital expenditures. New York’s Department of Health made a watch list of 28 hospitals which were open thanks to government help and political pressure, but still considered undesirable by acquirers.
In 2015, almost $325 million was given to the 28 listed hospitals, with another $450 million being budgeted for the facilities for the 2016 fiscal year starting on the first of April. While there are potential adopters of the hospital systems, many are not willing to risk.
Kenneth Raske, the chief executive of the Greater New York Hospital Association, proposed a $2.5 billion incentive for hospitals willing to adopt the ailing facilities.
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Insurers don’t like the idea of the big systems getting even bigger. A spokeswoman for the New York Health Plan Association called Raske’s plan a taxpayer-funded bailout of hospitals. Facilitating these mergers would give the state’s sprawling health systems more leverage in negotiations.
“We certainly object to allocating health care dollars—which are stretched thin to begin with—to already profitable hospitals that are looking to strengthen market power through consolidation,” she said.
That’s not the only way health systems are challenging insurers. The shift toward managing patients’ health rather than treating them when they’re sick has also motivated systems to start offering insurance products, such as Northwell Health’s CareConnect, making mergers and partnerships more likely so a network can better control costs.
Still, with systems interested in growing, Kingsbrook’s Brady believes Raske’s plan might be the catalyst that could finally help the hospital find a suitor.
Currently, $195 million in funding is budgeted for restructuring hospitals, clinics, nursing homes and home care agencies.
Photo by Matthew Rutledge via Flickr CC License
