Balancing the budget? Unions suggest Adams administration takes aim at city’s private hospital prices

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Citing a drain on taxpayers and the city, union groups have warned New York City leaders that it may be overpaying by as much as $2.4 billion in private hospital prices each year.
Photo courtesy Getty Images

With Mayor Eric Adams expected to release his executive budget on Tuesday — seeking an estimated 3% cut to all city agencies except the NYPD — a host of unions under the banner Coalition for Affordable Hospitals proposed city leaders instead take aim at NYC hospital costs, which they estimate cost the city roughly $2 billion annually above what Medicare pays for the same services.

Among the solutions proposed by coalition members at a meeting with the Adams administration on Monday is to restrict hospitals from overcharging on Medicare rates, prevent larger hospitals from using anti-competitive practices, and a call for government entities and Taft-Hartley Union Health Funds to pool their buying power and negotiate significant cost savings for NYC patients.

An inquiry was sent to the mayor’s office for comment, and the Bronx Times is awaiting a response.

Last month, thousands of New Yorkers signed a petition by the Coalition for Affordable Hospitals, which calls on five New York City hospitals — New York-Presbyterian, Mount Sinai Health System, Northwell Health, NYU Langone Health and Montefiore Medical Center — as well as their respective CEOs to provide fair medical prices. The coalition includes a group of nonprofits, unions, advocates, religious institutions, community groups, New York City Comptroller Brad Lander and Manhattan Borough President Mark Levine.

The petition cites a 2020 Rand Corporation study that found New York hospitals charged an average of 302% more than the Medicare reimbursement rate for the same procedures in 2018.

“Hospitals have gotten away with hiking prices on vulnerable patients for far too long,” said Kyle Bragg, president of 32BJ SEIU, an NYC property workers union “Mayor Adams has the opportunity to take the lead in holding hospitals accountable and deliver much-needed savings to the City and the hardworking New Yorkers who keep it running. We should seize this chance.”

Advocates for the Coalition for Affordable Hospitals say that high hospital prices drive down the wages of working people. For example, SEIU 32BJ estimates that if health care costs had increased at the rate of inflation from 2014 to 2023, an additional $5,000 in annual wages would have been available for union members.

“The rising costs of hospitalization is draining the resources of our City,” said Henry Garrido, executive director of DC 37, the city’s largest municipal public sector employee union. “Until we are able to rein in costs wealthy hospitals are charging the City of New York — sometimes quadruple the price of what they charge Medicare for the same procedures in the same hospitals — we will continue to see a decline in funding for the vital and essential services city workers provide to vulnerable New Yorkers.”

Three hospitals named in the petition told the Bronx Times last month that the need to subsidize public or charity care, provisions of higher quality care, and the impact of COVID-19 on hospital financials have led to higher prices. In 2020, health care spending increased 9.7% to $4.1 trillion, growing faster than both the economy (3.4% in that same timeframe) and consumer prices (7%). The 2020 increase was more than double the 4.3% increase in 2019.

In their March report analyzing hospital costs in the city, the 32BJ Health Fund — a collaboration that provides health benefits to union members and their families — cites that while the increase in federal expenditures contributed to the 2020 increase, rising hospital prices were still the primary drive in onerous health care costs. The report also notes that NYC hospitals receive hundreds of millions in property tax exemptions from the city, which they estimate costs New York City taxpayers more than $363 million per year.

The Health Fund said that private hospital systems in New York City charges it on average more than 300% of what they charge Medicare for the same services.

Reach Robbie Sequeira at rsequeira@schnepsmedia.com or (718) 260-4599. For more coverage, follow us on Twitter, Facebook and Instagram @bronxtimes

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