March 7, 2016
Buffalo is on the rebound, but who’s getting left behind?
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EDITOR’S NOTE / Contents
Jon Lentz Senior Editor
A little over a week ago, the state’s failure to pay its bills on time threatened to stall the SolarCity construction project, a massive solar plant aimed at reviving the Western New York economy. State officials scrambled to find the cash and rushed tens of millions of dollars to the contractors, including some that had already laid off workers. The project, the centerpiece of Gov. Andrew Cuomo’s Buffalo Billion initiative, was back on track. But missing from such day-to-day coverage about the governor’s billion-dollar economic initiative, from the many groundbreakings to the inquiries about contracting, is an exploration of who is actually benefitting from the initiatives driving Buffalo’s resurgence. In our cover story this week, Justin Sondel takes a closer look at the Buffalo Billion and other economic development projects – and illustrates in vivid detail how some residents are still feeling left out.
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EVENT: ON TECH We take a look back at our forward-thinking “On Tech” event, where experts talked nextgeneration technology, and how it will make New York smarter and safer.
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SPOTLIGHT: HEALTH CARE AND HOSPITALS We explore the funding crisis facing New York City’s public hospital system, how Medicaid reforms are threatening the future of safety-net hospitals, and what a $15 minimum wage in New York would mean for home health care.
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BEYOND THE BILLION In the debut of our three-part series, reporter Justin Sondel explores whether Buffalo’s economic resurgence will really help those who most need a hand.
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NEW YORK SLANT In a continuation of our spotlight on health care and hospitals, Karen Ignagni of EmblemHealth says valuebased payment plans will revolutionize the health care system. And the Manhattan Institute’s Paul Howard and Yevgeniy Feyman make the case against large health systems, which are rescuing struggling community hospitals but may be creating a less competitive market in the process.
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BACK & FORTH A Q&A with John Starkey, who is leading the revival of Buffalo’s Lafayette High School under the Internationals Network for Public Schools model.
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CITY COLLEGE OF NEW YORK-1847 HUNTER COLLEGE-1870 BROOKLYN COLLEGE-1930 QUEENS COLLEGE-1937 NEW YORK CITY COLLEGE OF TECHNOLOGY-1946 COLLEGE OF STATEN ISLAND-1956 BRONX COMMUNITY COLLEGE-1957 QUEENSBOROUGH COMMUNITY COLLEGE-1959 CUNY GRADUATE CENTER-1961 BOROUGH OF MANHATTAN COMMUNITY COLLEGE-1963 KINGSBOROUGH COMMUNITY COLLEGE-1963 JOHN JAY COLLEGE OF CRIMINAL JUSTICE-1964 YORK COLLEGE-1966 BARUCH COLLEGE-1968 LAGUARDIA COMMUNITY COLLEGE-1968 LEHMAN COLLEGE-1968 HOSTOS COMMUNITY COLLEGE-1970 MEDGAR EVERS COLLEGE-1970 CUNY SCHOOL OF LAW-1983 MACAULAY HONORS COLLEGE AT CUNY-2001 CUNY SCHOOL OF PROFESSIONAL STUDIES-2003 CUNY GRADUATE SCHOOL OF JOURNALISM-2006 CUNY GRADUATE SCHOOL OF PUBLIC HEALTH AND HEALTH POLICY-2011 GUTTMAN COMMUNITY COLLEGE-2011 CUNY SCHOOL OF MEDICINE-FALL 2016
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THE ALBANY TRAIL
By JEFF COLTIN
219 YEARS OF TREKKING FROM NEW YORK CITY TO ALBANY Ever since Albany became the state capital in 1797, legislators, lobbyists, journalists and a gaggle of others have been making the journey to Albany. And ever since that time, a whole lot of them have been coming from New York City. While much in governance has stayed the same over the past 219 years, the ways to get there and back again have changed a lot.
1797
The 150 miles from Manhattan to the capital would take three full days by stagecoach. An ad for Van Wyck, Hall and Kinney stagecoaches promises one leaving the city every day at 10 a.m. and arriving in Albany three days later at 9 a.m., all for $7. No long weekends in the district office back then!
1807
The first steamboat, created by Robert Fulton, travels up the Hudson from New York to Albany. The trip took 32 hours – significantly faster than the four days it took a sailing sloop to make the same journey.
1851
Back to the land! Train service starts between New York and Albany, with the express train making the trip in a little over four hours. While steamboat technology had improved enough to make the trip up the Hudson in about nine hours, trains brought travel into the modern era.
1899
With better technology, trains sped up quite a bit. Leaving every morning at 8:30, the New York Central’s Empire State Express could get New Yorkers from Grand Central to Albany in 2 hours and 40 minutes.
1955
The New York State Thruway opens, substantially speeding up car travel across the state. Assemblyman Abbot Low Moffat helped authorize construction of the road in 1942 after years of bearing stop-and-go traffic on Route 9 on the drive up from Manhattan.
2013
Assemblyman Kieran Lalor introduced a bill to eliminate per diems and travel reimbursements for legislators who live within 125 miles of Albany – a move that would encourage two-hour driving commutes for some lawmakers. It died in committee.
Source: “Atlas of the Historical Geography of the United States,” Charles O. Paullin and John K. Wright; “Historic Old Rhinebeck,” Howard Holdridge Morse; Britannica; “The Hudson River and the Hudson River Railroad—1851,” Bradbury & Guild; Canada Southern; “The Spirit of New York,” Bruce W. Dearstyne; state Assembly
2016
These days, a drive from lower Manhattan to the Capitol will take you about three hours. For those in a real hurry, a private plane from LGA to ALB will take you a breezy 61 minutes. And an Amtrak ride is just as fast as it was in 1899 – 2:40 from Penn to AlbanyRensselaer.
Mary A. Griffin named President and CEO of the Life Insurance Council of New York, Inc. (LICONY) Mary A. Griffin joins the Life Insurance Council of New York, Inc. (LICONY) as President & Chief Executive Officer, effective April 4. The February announcement brings an end to an extensive search to replace Thomas E. Workman who has served in these roles since September 1999. Ms. Griffin joins LICONY from Citigroup, where she was Senior Vice President & Director for the New York region in Citigroup’s Global Government Relations Department. “Mary brings a wealth of experience and knowledge to this critical role, and I am thrilled she is assuming this leadership position,” said Timothy A. Walsh, Chairman of the Board of LICONY. “New Yorkers depend on life insurance products to protect their financial and retirement security, and we look forward to working with Mary on the important issues and opportunities facing the life insurance industry.” Ms. Griffin’s career has been spent either as a public servant within New York State government, or within business as a liaison to local and state government. She comes to LICONY with an extensive background in banking and insurance matters. Ms. Griffin joined Citigroup in 2000 and represented the company before the New York State and New York City governments on a variety of legislative and regulatory issues. Prior to joining Citigroup, Ms. Griffin was Assistant Vice President, Government Affairs, for the American Insurance Association (AIA) from 1992 to 2000. While at Citigroup and AIA, Ms. Griffin was directly involved in a number of banking and insurance issues before the New York State Legislature and state regulatory agencies, including corporate tax reform and insurance regulatory reform. She also served as Executive Assistant to the Superintendent, and Legislative Liaison for the New York State Department of Insurance during the administration of Governor Mario Cuomo; as a member of the New York State Assembly Program and Committee Staff; and as a senior legislative aide for Assembly Member Andrew Virgilio.
Ms. Griffin said of the opportunity at LICONY, “I have witnessed a great deal of change in business and the public sector, but what has remained constant is the need for collaboration and active discussion to solve the issues that impact the people, the families, and the businesses of New York State.” “A major challenge exists for the life insurance industry to reach the uninsured. Without this critical protection in place, families are at great financial risk upon the death of a loved one. It doesn’t have to be that way,” she said. “My best wishes to Tom, who is a respected leader and a true authority of our industry,” said Ms. Griffin. “I am excited to continue LICONY’s work with our industry and our government to create public policy that encourages people to get the financial protection they need.” “I look forward to continuing the strong LICONY record of advocacy for its members at all levels of New York State government,” she concluded. LICONY is the trade association representing the life insurance industry doing business in New York State. Its member companies provide the vast majority of life, disability income, long-term care insurance and annuity benefits for New Yorkers. LICONY’s membership includes 73 life insurance companies and 22 allied professional firms.
PRIOR EMPLOYMENT Citigroup Global Government Relations Senior Vice President & Director, NY Region
2000 - Present
American Insurance Association Assistant Vice President, NY
1992 - 2000
Executive Assistant to the Superintendent and Legislative Liaison NY Department of Insurance, Administration of Governor Mario Cuomo
1983 - 1992
NYS Assembly Program and Committee Staff
1981 - 1983
Office of Assembly Member Andrew Virgilio
1976 - 1980
EDUCATION Boston College, BA (1975) ORGANIZATIONS Chair, The Business Council Government Affairs Committee Member, Fort Orange Club Member, Finance Committee, Andrew M. Cuomo for Governor Past officer, Albany Academy Parents Association
New York: Life Insurance Council of New York, Inc., 551 Fifth Avenue, 29th Floor, New York, NY 10176, Tel: (212) 986-6181 Albany: Life Insurance Council of New York, Inc., 111 Washington Avenue, Suite 300, Albany, NY 12210, Tel: (518) 436-8417
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INADEQUATE RESOURCES STRAINING OPWDD’S
Capacity for Compassion
Inadequate staff and resources have strained existing developmental disabilities services to the breaking point. The challenge is compounded by the intentional erosion of state operated services even as 11,000 individuals and families are on waiting lists in need of services. It takes a special kind of dedicated person to do this difficult work and it’s not easy to recruit, train and retain them. Please meet one of them: Sarah Moore discovered her capacity for compassion early on in life and it has only grown in her daily work as a Developmental Aide with the New York State Office of People with Developmental Disabilities.
“Staffing is a continuing challenge…every week we have mandated overtime to cover shifts and that leads to more issues because people are always tired.”
WE ARE ALWAYS SHORT-HANDED AND THAT MEANS SOME OF THE COMMUNITY OUTINGS HAVE TO GET CANCELLED, IT MEANS PEOPLE ARE OVERWORKED AND THAT’S JUST NOT GOOD.
“A friend of mine was seriously injured in high school and when I saw the effect his disabilities had on his life and his family, I knew I wanted to pursue a career helping people cope with circumstances like that,” Moore said.
Compassion is a necessary resource for frontline workers like Moore. Under tremendously challenging circumstances, Moore and her co-workers put quality for the individuals in their care as the top priority as they work hard to address the most basic needs. “We have a home with 11 individuals, some with multiple disabilities,” Moore said. “There are three staff for daytime and evening shifts and two staff for the overnight. Our individuals have a range of functioning levels, but we have to help them get up in the morning, clean, dress and feed them, assist them with using the bathroom. We try to take them out to activities in the community because they really enjoy that and it also helps to build awareness and understanding about special needs by people in the community too.”
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“I really love going to work because it feels like family – a lot of the individuals don’t have family coming to see them and sometimes we’re all they have,” Moore said.
“We are always short-handed and that means some of the community outings have to get cancelled, it means people are overworked and that’s just not good. Even having staff from neighboring homes fill in creates upheaval because the individuals get nervous when they don’t know the people.”
Seven years into her career, Moore knows that this work is her calling. While she is optimistic about her future, she notes that the perpetual shortstaffing has affected morale among her co-workers and there are concerns about the Cuomo Administration’s commitment to ensuring necessary stateoperated services. “Job security worries people when we should really be focused on helping the individuals experience better lives.”
DA N N Y D O N O H U E , P R E S I D E N T
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PHOTOS BY ARMAN DZIDZOVIC
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Julie Greenberg
Jay Hershenson
Top brass from City Hall, media, business and beyond gathered at The Capital Grille on Wall Street last month for the debut of City & State’s annual must-read list of the 100 most powerful people in New York City. The luncheon featured remarks from Steve Cassidy, president of the Uniformed Firefighters Association of Greater New York, Julie Greenberg, senior vice president of Kasirer Consulting LLC, and Jay Hershenson, senior vice chancellor of CUNY. To find out who gained power this year, who lost it, and who got dropped, view the full list at cityandstateny.com.
Steve Cassidy
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On Tuesday, Feb. 23, City & State hosted its fifth annual forum on how technology is changing the way New York government and businesses work. At the event, sponsored by Qualcomm, IBM, Juniper Networks, Outfront Media, NYU’s Tandon School of Engineering, Verizon and Capalino+Company, panelists discussed next-generation technology that aims to make New York smarter, safer and more equitable, as well as the innovative ways academia and the public and private sectors are coming together to create more sustainable urban environments. For more on what those experts had to say, read on ...
is proud to support City & State’s 2016 On Technology Forum
Let’s build a smarter planet.
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Smart Cities
Engineering the fabric of citywide connectivity
Learn more at: qualcomm.com/smart-cities
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TECHNOLOGICALLY SPEAKING
City & State’s On Tech event in February featured an all-star lineup of experts and officials on the front lines of technological change in New York City. Check out what they had to say.
GALE BREWER Manhattan borough president “I just want to make sure that the folks in New York are going to be able to participate in this economy. I am just a little worried about that. In the schools, you can’t be a computer science teacher yet because the state hasn’t put that as a line. You have to be an English or math teacher to be a computer science teacher. That has to change. ... Second, I know that Silicon Harlem, for instance, is doing a great job partnering with City College to teach coding and so on, because it’s inexpensive to have that kind of partnership. They’re doing it all through Harlem. But we don’t have the technology for the individuals at an affordable price to learn it all. That’s still an issue for us.”
JESSICA SINGLETON New York City chief digital officer “I think your question is getting at government’s inertia or resistance to change. Government gets a bad rap on that. There are a lot of brilliant and motivated and inspired people in government. If anything, sometimes you just need to find each other. But the people are there, and the brains are there, and the talent is there, and so particularly when it comes to digital managers, for example, sometimes they aren’t the senior-most person in the org chart. So it’s really about empowering people and telling them it’s OK to share best practices, and to share ideas. This is a safe space for innovation, and that’s how the best ideas get into the world.”
JEFF MERRITT Director of innovation, New York City Mayor’s Office of Technology and Innovation “If you look on the outside of a building and see that little gray box, there’s about 818,000 buildings in New York City that have wireless water meters. That means that each of those buildings is transmitting its water usage to a central data hub. That means every year we save about $3 million from not having people have to go into basements and actually read meters. It means that we’ve seen a 50 percent reduction in complaints from consumers about incorrect water bills. We’ve saved about $70 million for individual homeowners because they actually are alerted when there is a spike in their water bill. So it’s not only about making the city run better, it’s about making people’s lives easier, getting a little extra cash in the bank.”
STANLEY SCHORR Assistant commissioner, New York City Department of Information Technology and Telecommunications “We for years at DOITT had heard from various people in communities and the public generally about why can’t the city do free public Wi-Fi. In my mind, it was the idea to do free public Wi-Fi on something that replaced the pay phones would really make it happen better. Because the payphones had advertising on them, they’re all over the city, they would be immediately able to be replaced with something that had Wi-Fi. So we built a plan, coordinated with agencies, we brought it to a certain point. We didn’t get it out during the Bloomberg administration because there wasn’t the momentum at the time. Then the de Blasio administration came in, we immediately met with Jeff Merritt, we had the tremendous support, and extra added emphasis was put on the equity.”
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JILL RENSHAW Product manager, Verizon IoT - Smart Cities “One of the projects that we did with one of our partners, (Global Traffic Technologies), with the transit signal priority on one of the major bus routes in the city. This bus has 60,000 riders a day, and to be able to make that ride be on time or on schedule by being able to shift the traffic signals if needed, that increases the ridership. Now they know they can depend and rely on that. So if I have more people riding the bus, and I’m going to have less traffic overall, I’m going to have a more satisfied public.”
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KEN DIRCKS Director of technology consulting services, New York public sector, IBM “When we go into an organization and somebody wants a really big change, one of the first things we ask is, do they have the plumbing? We don’t mean the data infrastructure – the city has that. We mean the organizational plumbing. Do they have the wherewithal and connections and people to get this thing done? The Mayor’s Office of (Technology and) Innovation didn’t exist five or 10 years ago. The Mayor’s Office of Data Analytics didn’t exist 10 years ago. So they’ve got it. And on the tech side, they do have the plumbing. So it’s all there.”
KATHLEEN WARNER Executive vice president, New York City Economic Development Corporation “New York in particular has shown its innovation, its resilience, its creativity by leap-frogging over the last few years in terms of venture capital coming into this area, by building on incredible legacy industries that we have, and becoming really an innovation hub globally. Money is coming into this area, companies are coming into this hub, and it’s really a testament to New York City itself in being super-smart about catalyzing and bringing people together to amplify the city as an innovation leader globally.”
MAYA WILEY Counsel to New York City Mayor Bill de Blasio “The tech sector loves to talk about disruption. Our metric should be smart cities as disruptive of inequality. They fundamentally have to disrupt inequality. I’m very pro-technology, and we need the advances we’re getting. What we also need, though, is to make sure everyone in our diverse human ecosystem in this city, in this state, in this nation, are able to actually have the tools that technology offers, make use of them and create these human ecosystems that are not only identifying the problems that need to be solved, but figuring out how they get solved.”
C&S: Qualcomm is a partner on the LinkNYC project, which is converting pay phones into Wi-Fi hubs. How is that going? KA: It’s setting the bar for all other cities globally on how to really reimagine city infrastructure. If you think about the transformation we’ve seen in smartphones, or phones in general, where a phone used to do one thing and now it does hundreds of things, we strongly feel that infrastructure and city services should do the same. So we’re working with the different departments across New York and really thinking through how can we use the infrastructure that’s there today … you’ve got all these old pay phones that are rarely used, except for a weapon every once in a while, or to hide from rain, so how do we make it multipurpose? How do we reimagine it and transform it into something that’s super useful for the people who live in New York City? We were able to work with the city, very rapidly, actually, after the RFP, and we have 19 units installed now. What that means is we’re actually taking out all of the old pay phones and putting in these interactive kiosks. Those interactive kiosks actually are bringing a lot of revenue back to the city, so they’re paying for themselves, but they’re also providing a huge service. KIVA ALLGOOD Vice president, business development, smart cities and industrial IoT, Qualcomm Technologies
C&S: This will be paid for through advertising? KA: One hundred percent through advertising. Outdoor advertising, they each have 55-inch, very bright and brilliant screens on them. But those can also be used for city services. If there’s an Amber Alert, the city has the ability to post that information on the screens right away, including pictures. If there’s a disaster or an evacuation route, that also serves as a way to get citizens that information, too. C&S: Could these be used to detect noise, traffic or air pollution? KA: We’re working with the city right now on trying to figure out what type of sensors would make the most sense. So definitely if you think about pollution, pollution is tied to traffic and traffic congestion, so how do you have a predictive element there. There are also even event type things, so you hear noise, we’ve heard about gunshot detection, there are a lot of other thumbprint detection and computer intelligence (tools) that can be used. Because these are going to be so pervasive, 7,500, up to 10,000 units, throughout the city, we can definitely figure out a type of sensor array that would add the most value. So we’re working with the city on that right now.
TurnON the true value of your digital communications.
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OUTFRONT’s ON Smart Media is enabling the future of digital communications for New York’s transit network. An ecosystem comprised of elegant, highly functional, cost efficient hardware, an app-driven content platform, and a cloudbased management system empowers transit operators and brands to reach their audiences with unparalleled precision and impact.
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SMART + EQUITABLE = A BETTER NYC By MINERVA TANTOCO WHAT HAPPENS IN New York City can inspire other cities around the world and have a positive global impact. This is especially true when it comes to technology, which has the potential to transform and improve urban life. That’s why it is so important that we lead by example, setting the stage for the future of cities by building a Smart + Equitable City – a place where everyone has access to the benefits tech provides. New York City, one of the fastest growing tech sectors in the U.S. with 10 percent growth in 2015, is using its smart city strategy to attract talent, improve access and nurture innovation. What does it mean to be both a Smart + Equitable City in 2016? For New York City, it’s not just about cool tech (although the tech is very cool), it’s about using tech to improve the lives of New Yorkers: building a more responsive government with realtime information, generating cost savings and impact by using better data, increasing equity in the delivery of services through enhanced analytics and using city infrastructure and resources more efficiently via sensors and other digital tools. A Smart + Equitable City also places a premium on technology for the public good, democratizes society, provides equal opportunity in the tech economy and closes the digital divide for women and minorities. With our diversity of industries and people, a unique combination of density and variety, New York City is the perfect “living lab” for the smart city industry – including urban and civic tech. To broaden opportunities for more New Yorkers, we will grow our tech talent in all five boroughs. New York City spearheads initiatives such as Computer Science for All, a 10-year plan to provide computer science education to all public school kids, which became the model for a nationwide program announced by the White House last month. The
NYC Tech Talent Pipeline provides training for New Yorkers by partnering with industry leaders to develop the talent they specifically need. Internet access today is as essential as running water or electricity. Without it, it is nearly impossible to participate in the digital economy. New York City needs free or affordable access to broadband for all New Yorkers in order to flourish. The LinkNYC Wi-Fi hotspots, launched recently by Mayor Bill de Blasio, will replace our old payphones with the largest, fastest, free public Wi-Fi network in the world. The city is also investing in increasing broadband access at NYCHA housing developments. Innovation will be the key to solving many of the toughest urban problems. The focus on equity will guide the usage and distribution of tech for the greatest public good. Worldwide, the dialogue has shifted to the future of innovation and of cities as the drivers of the economy in the digital age. With New York City’s Neighborhood Innovation Labs and Neighborhoods.NYC, we bring the tech strategy to the communities and neighborhoods it is meant to serve. The Mayor’s Office of Technology and Innovation also issued a “call for innovations” to address the inequity of access in New York City. Some of those proposals will be piloted this year. There will be more to come. Technology can be harnessed to imagine and do new things or improve how we already operate – more efficiently, responsively and equitably. We’re looking forward to continuing to show how New York City leads the way, from smart homes to smart neighborhoods, to smart city, to a smart and more equitable planet. Let’s take this journey as One NYC, together. Minerva Tantoco is New York City’s chief technology officer and leads the newly created Mayor’s Office of Technology and Innovation.
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engineering.nyu.edu
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As Buffalo shows signs of an economic resurgence after years of decline, there are questions about whether the people who most need a hand up will benefit. This is the first story of a three-part series exploring the impact of the Buffalo Billion and other state investments aimed at revitalizing Western New York.
BEYOND the BILLION BUFFALO IS ON THE REBOUND, BUT WHO’S GETTING LEFT BEHIND?
Story by JUSTIN SONDEL Photos by BRENDAN BANNON
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EVERY WEEKDAY EVENING for the last few months, Tuan Jones has roused himself to take the drive to his graveyard shift job helping packages from Canada reach their intended destinations in the United States. Jones, who is short and trim, with soft eyes that are almond in color and shape, returned to his hometown of Buffalo about two years ago after spending nearly a decade and a half in the Navy as an air conditioning and refrigeration specialist, living in Jacksonville, Florida, for the majority of his time away. While in Florida, the selfproclaimed “hometown boy” would often read about the Queen City and feel the pangs of homesickness. “It sucked,” he said. For years he saw the headlines that made Buffalo into a punchline for the rest of the country. The Bills. The Sabres. The weather. The job losses. Even in Florida, Jones felt the cruelty of the nation’s condescension. But Buffalo’s story has started to change. Instead of news about factory closures, Jones was reading stories about job gains, low unemployment and a construction boom in the years leading up to his return. The first signs of a resurgence started percolating in the early 2000s with the advent of the Buffalo Niagara Medical Campus, an umbrella organization of health care providers, institutions of higher learning and neighborhood associations that manages more than 6 million square feet of clinical and research space, spread out over 120 acres just east of downtown. Since then, dozens of projects throughout the region have been completed or are taking shape. Construction is going at such a fast clip that union leaders have said they won’t be able to fill all the jobs. As Buffalo’s fortunes fluctuated, Jones’ desire to come home never wavered. “For me to be all the way down there and to have my family all the way up here, I didn’t feel nothing, anything,” Jones said. “I had to have a lot of friends in Florida just to fill the void of family up here.”
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However, since returning, Jones, now 42, has struggled. Last May, after being out of a job for more than six months, he entered a training program at Buffalo State College in advanced manufacturing, a yearlong commitment that will qualify him for entry-level positions at Buffalo’s manufacturing outfits, where employers have been searching fervently for talent in recent years. His goal is to find a job that will offer the sort of stability he needs to stay in Buffalo, with his family. “I’m glad I did come home,” Jones said. “It’s just the fact that opportunities, they are slower than what they should be.”
From 1990 to 2010, employment in Western New York was essentially flat. Over the same period, the number of jobs across the nation grew 31 percent. While young people moved away seeking other opportunities, no one was coming to Western New York to replace them. There were more than 530,000 people living in Buffalo at the 1960 census. Today the number hovers around 260,000. Compounding the problem of population loss was white flight. Even as the overall regional population fell, many suburban communities swelled as the city’s white residents – who were more likely than minorities to keep their
“MY FATHER PRET T Y MUCH TAPPED ME ON THE HEAD AND SAID, ‘YOU KNOW GOING TO SCHOOL IS NOT GOING TO GET YOU NOTHING IN BUFFALO. TRYING TO GET YOU A JOB IS NOT GOING TO GET YOU NOTHING IN BUFFALO.’” - Tuan Jones
THE FALL Buffalo’s decades-long decline is the stuff of civic horror stories, but it certainly is not unique. Cleveland, Detroit, Milwaukee – all industrial powerhouses of the Rust Belt – also felt the impact of an economic freefall beginning in the 1960s. Their declines were of the same magnitude, or worse. Factory jobs, the bread and butter of the Rust Belt, were driven south and out of the country. For decades, Western New York hemorrhaged jobs during recessions and then slowly gained some of them back. Company after company announced it was shuttering its Queen City operations, either closing shop completely or heading for greener pastures with warmer temperatures and fewer labor laws.
jobs or get new ones as the bottom fell out of the economy – fled the city. After decades of disinvestment, Buffalo – a once-bustling economic behemoth that at one point was home to the most millionaires per capita in the nation – had become a collection of hollowed out neighborhoods with pockets of intermittent stability and a few bastions of old money. In recent decades politicians, advocates and community leaders have grappled with those economic realities. Countless officials have vowed to return Buffalo – the home of the Pan-American Exposition, the Larkin Soap Company, Bethlehem Steel, and the gateway from the Midwest to the East Coast – to its grandiose former self. But those vows repeatedly went unfulfilled.
The cruel misfortunes of the city’s sports teams and routine blizzards contributed to its reputation as a national punching bag: four consecutive Super Bowl losses. Endless winters. Even worse, a new economic blow splashed across the headlines every day. In the collective American psyche, Buffalo had become one of the last places you’d want to be.
LEAVING HOME After graduating from Seneca Vocational High School in 1993, Tuan Jones drifted between jobs while taking classes at Erie Community College. While he was able to stay out of trouble, many of his friends were falling into the typical traps of growing up black and male in an American city. When Jones graduated, Buffalo, like many cities across the nation, was still in the midst of a spike in violence. He has many fond memories of his childhood home, less than a block east of Main Street. Still, during his teens it was dangerous enough that his mother wouldn’t let him play outside after dark. While Jones walked his own straight and narrow path, some of his friends were killed, and many more went to prison. “The same friends that, they did all this negativity stuff, they were going down the wrong path, I went down the right path,” Jones said. “I went to the Navy and most of them are still locked up some place or doing crime or trying to make ends meet just by selling something or whatever. I can’t live like that.” There were few options for Jones in the ’90s. The factory jobs that had once supplied many of his family members and neighbors with stable incomes were scarce. As time went on, he felt like he was running up against a wall. “There was a lot of low, low paying jobs,” Jones said. “And you had to know somebody to know somebody to get in at either American Axle, or General Motors or Chevy.” His dad, a Navy man, felt he had the solution. “My father pretty much tapped
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By ASHLEY HUPFL
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Grain elevators, once used to store millions of barrels of grain as it came from the Midwest to be distributed to the East Coast and other economic hubs, line the Buffalo River. me on the head and said, ‘You know going to school is not going to get you nothing in Buffalo. Trying to get you a job is not going to get you nothing in Buffalo. Take your butt to the service. Get something that you can benefit from out of the service and that you can use later on in your life,’” Jones said. So Jones did just that. His experiences in the military were almost identical to his dad’s. Both men were air conditioning and refrigeration specialists. They were assigned to the same ship, the U.S.S. Kennedy, before the vessel was decommissioned. And just like his father did years ago, after leaving the military Jones returned to Buffalo. “I was always following in his footsteps,” Jones said.
THE PROMISE In his 2012 State of the State address, Gov. Andrew Cuomo, with all of New York’s political, business and advocacy leaders watching, made an announcement that would rock
Western New York and dominate headlines for years. Revealing the details to almost no one outside of his inner circle before the speech, Cuomo unveiled his Buffalo Billion initiative, prefacing his commitment of $1 billion for economic development to Western New York with the story of Buffalo’s downfall. For too long, he said, Buffalo had been forgotten by the rest of the state, and its nearly 30 percent poverty rate, at the time the thirdhighest in the nation among cities of over 250,000 people, was something state leaders could no longer ignore. “We believe in Buffalo,” Cuomo said. “Let’s put our money where our mouth is.” Yet another promise. A billion dollars to stem the tide of decline, a full five decades after it began. Western New York jumped in with both feet. And in the years since, the press has celebrated it, too. Area politicians at all levels – and from both major parties – have
praised Cuomo’s commitment to the region at every opportunity. The accolades have rolled in at the announcement of one new investment after another. One recent example came after the governor announced that the state would build a pharmaceutical manufacturing plant south of Buffalo and also expand the headquarters of the company, Athenex, on Buffalo’s medical campus. State Sen. Catharine Young, a Republican, thanked the governor “for believing in us, for investing in us, for caring about us,” calling it a “new dawn in Dunkirk, New York, and for all of Chautauqua County.” Buffalo Mayor Byron Brown applauded Cuomo, a staunch ally, for spurring a “new level of growth and private sector confidence.” Erie County Executive Mark Poloncarz proclaimed that the announcement “once again demonstrates Gov. Cuomo’s commitment to attracting business growth and creating real opportunities for the people of Erie County.” The announcement was one of
dozens that have played out since Cuomo’s pledge to the region. Indeed, the planned projects, as well as a series of concrete and very visible changes in the region, have altered Buffalo’s image in ways that many residents could not have imagined a decade ago. Where there was once an empty parking lot in the heart of downtown there is now Terry and Kim Pegula’s shrine to hockey, HarborCenter, a megaplex replete with ice rinks, a massive sports bar and a “signature” Tim Horton’s decked out in Sabres colors. Across the street, where there was once a gravel parking lot and the old Buffalo Memorial Auditorium – the asbestos-ridden former home of the Sabres – there are now replica canals that serve as ice rinks in the winter and a large green space and boardwalk where free concerts are held. To the south, the largest solar panel factory in the Western Hemisphere is nearing completion at the state’s Riverbend site, where Cuomo’s team finagled a massive $5 billion commitment from the flashy, if risky, SolarCity. The 1 millionsquare-foot factory, which will be owned by the state and run by the company, is taking the lion’s share of the money earmarked for the governor’s Buffalo Billion initiative, with an estimated price tag of $750 million. Travel writers from The Washington Post, the Toronto Star and the Guardian have gushed in the recent years over the city’s architecture, restaurants, art scene and natural beauty – features that have remained a constant through the rise and fall of the lakeside burgh but were mostly unknown to people outside the region. And, following national trends, the area’s jobs numbers have also been more rosy. The region saw jobs gains for nearly six years straight, although revised numbers showed a slight contraction in December, and there is little doubt among residents that the Cuomo administration’s concerted efforts in Western New York – the lucrative subsidy packages, business competitions and old-fashioned marketing – have
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at least partly driven that growth. The state Department of Labor, whose conservative estimates are rooted in recent historical data, doesn’t see any signs of that trend slowing in the coming years. The department estimates that the region will gain more than 52,000 jobs between 2012 and 2022. Still, the question that continues to be asked by a variety of community groups is whether all this good news will be felt in every neighborhood, as Cuomo suggested when his Buffalo Billion initiative was introduced.
PAINTING IN BROAD STROKES While neighborhoods throughout Buffalo suffer from similar civic ills, the East Side, a massive, complex series of neighborhoods composed of everything east of Main Street – which serves as a de facto dividing line for race, wealth, and class – is often painted with a broad brush. The East Side is more than 85 percent African American, disproportionately poor in a poor city, and often equated with criminal activity. One East Side neighborhood, Broadway-Fillmore, which was once home to the city’s large Polish population and later became a largely African-American neighborhood, is today one of the more deserted sections of town. Hamlin Park, to the north, is a registered historic
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The Broadway-Filmore neighborhood was once one of the Buffalo’s most bustling neighborhoods. Today it is one of the neighborhoods most affected by disinvestment, with entire blocks now devoid of residents.
Tuan Jones on his way to a training program at Buffalo State College in advanced manufacturing. He enrolled after struggling to find a job for more than six months.
district where, while vacant houses do dot the neighborhood, middleclass African Americans have lived in a tight-knit community since the 1950s, taking pride in their turn-ofthe-century homes. Although the West Side has more wealth, it too has neighborhoods with poverty rates that exceed 50 percent. There, some young people, lured to the drug game by a lucrative job in a place where few exist, hang out on porches waiting for the next customer. Detectives in buttondown shirts and loose-knotted ties sometimes gather around the body of such a young person, trying to figure out how his life ended. More complex are the West Side neighborhoods that line the shores of Lake Erie and the Niagara River. This is where the city’s exploding refugee and immigrant populations are making their homes, bringing new traditions and opening celebrated restaurants. These are the neighborhoods where “urban pioneers” first laid claim, creating an environment where more affluent young people could feel like they were making a safe investment, eventually causing home prices to skyrocket on streets once known
more for their affiliation with the 7th Street Gang and 10th Street Gang. But the East Side, despite the many nuances between neighborhoods, is often perceived as a monolith, a place that, especially if you are white, especially if you are from more affluent sections of town or the suburbs, is to be avoided.
BEST-LAID PLANS Henry Taylor, a University at Buffalo urban planning professor, has spent the better part of a three decades working in and studying the city. In his office in a squat, stone building on the university’s picturesque south campus, Taylor is surrounded by papers, a considerable amount of it plans and research. Plans to change this neighborhood or another. Research on patterns of population movement or markets. “In this office we have dozens of plans we have developed for virtually every section of the East Side, dozens of plans,” Taylor said, his voice rising in both tone and volume.
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Tuan Jones is enrolled in a yearlong advanced manufacturing training program aimed at helping minorities, women and veterans who have been out of work for at least 20 weeks. After serving in the military, Jones returned to Buffalo to find jobs scarce despite the state’s recent investment in the city.
Those proposals, sitting in piles and on shelves throughout his office, have never been taken seriously by city leaders. Sometimes they were paid lip service, but, when it came time to put the chips on the table, the money to carry them out was never dedicated, he said. “We laid out, 25 years ago, a strategy for the rebuilding of the East Side,” Taylor said. In that time only a few projects have moved forward and only in halfhearted attempts to create the illusion that city leaders were doing something for the community, he said. Meanwhile, plans to carry out other transformative projects – the medical campus, Canalside, Riverbend – have gone forward successfully because the resources necessary have been provided
by leaders from all levels of government. “If the leadership made developing East Side neighborhoods the same kind of priority that they made the medical campus, the waterfront and some of the other big projects that have occurred in this region, then we would be having a very different conversation,” Taylor said. Even the medical campus has failed to address some of the issues proponents said it would. It would bring jobs. It would help revive the neighboring Fruit Belt, a historically African-American neighborhood named for orchards that left their legacy in the street names: Cherry Street, Peach Street, Orange Street. An analysis from the Partnership for the Public Good found that in 2011 only 5 percent of the more
than 7,600 jobs at the campus for which applicable Census data is available – there are about 12,000 people working on the medical campus – were held by people who lived within a mile of the perimeter. And many of the people from the neighborhood employed at medical campus facilities find work only in the lowest-paying jobs, working on maintenance crews, as security guards or as lab technicians. In addition, neighbors who were assured that the presence of the medical facilities would improve their community have often butted heads with medical campus leadership. Meanwhile the neighborhood has been hollowed out by speculators, who snatch up property and sit on it, creating one of the highest rates of vacancy in a city with more than 10,000
abandoned homes. They are waiting for the last of the residents to move out so the houses can be demolished and replaced or refurbished for the doctors, medical students and executives who work at the hospitals. “Had the city and its leaders been interested they could have created those linkages and connections,” Taylor said, noting that there was always a plan to connect to and strengthen the existing community, but that it has not been implemented, in his view. As for the plans that have been laid by the state and city for the redevelopment of the workforce, particularly in poor and minority communities through programs like the planned Workforce Development Center, Taylor isn’t holding his breath. “I’m not optimistic about it
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because the leadership in this area’s given me no reason to be optimistic about anything that they’ve done,” Taylor said.
COMING HOME When Tuan Jones jumps in his white Chevy SUV to make the trip to Cheektowaga for his 11 p.m. to 7 a.m. shift at Ashton Potter – a job he found through a temp agency – his day is just beginning. After he’s done he returns home briefly to eat and clean up. Then it’s off to Buffalo State College, where he is participating in a yearlong advanced manufacturing training program aimed at helping minorities, women and veterans – all demographic groups severely underrepresented in the field – overcome the barriers to an industry that is starving for talent. Jones speaks with unbounded energy. His self-confidence seems limitless, and he does not shy away
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from selling himself at every opportunity. He keeps a binder on his desk at the training center full of certificates and awards from his time in the service, neatly slipped into plastic dividers, able to name the reason for each at a glance as he pages through. “When they see me in my Navy (uniform), and they see all my awards, ‘This guy’s a badass, we need to get him. We need him,’” Jones said of past and potential bosses. When he returned home, he thought that finding a job would not be as difficult as it was when he left. While for years the news coming out of Buffalo had been depressing, most of what he had been reading in recent years was about growth, about investment, about people coming back, about opportunity. And so it was surprising to him that the jobs weren’t there. Unlike his father, Garfield, who found steady work as a heating and cooling specialist when he returned
to Buffalo, Jones’ Navy experience has not helped him find a gig. “Trying to find something, at least on the background of what I’m qualified to do, was extremely hard,” Jones said. He kept hearing that he was overqualified, a concept that he found confusing and frustrating. He pared down his resume. “I started taking stuff off so I wouldn’t look so qualified,” Jones said. After a few months, Jones landed a gig with Aaron’s, a rent-to-own business, the kind of operation that only thrives in poorer neighborhoods. He was part of the collection team, calling or knocking on the doors of customers twice a day to ask if they could pay, in full or in part, the money they owed on their couch or television or washing machine. He knew the answer even before he picked up the phone or rapped on the door. He despised his work. “It was always challenging, it was
always frustrating, it was always a headache,” Jones said. After about 18 months at Aaron’s, Jones was fired because he refused to come in on a scheduled day off. That, he said, was one of the best things to happen to him since coming home. His advanced manufacturing training is limited to people who have been out of work for at least 20 weeks. “If it wasn’t for him firing me from Aaron’s I wouldn’t be here for this,” Jones said of his former boss. “I’ll take a slam in the face sometimes when another door opens.” Now, he hopes, the training program will allow him to find decent, steady employment so he doesn’t have to leave his hometown again. “It’s just the simple fact of trying to put my foot in the door, and that’s what I’m doing right now,” Jones said. “I’m putting my foot in doors and I’m not taking no for an answer.”
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Health Care and Hospitals The delivery of health care in New York is undergoing dramatic changes. The Affordable Care Act, known as Obamacare, has significantly expanded coverage, with the number of uninsured New Yorkers down by 850,000 since the state’s health insurance exchange opened in 2013. The federal legislation also paved the way for Gov. Andrew Cuomo’s Medicaid Redesign Team, which has targeted inefficiencies and touted successes in reducing cost growth. But the transition has not gone entirely smoothly. Longstanding hospitals are struggling to stay open. New York City’s safety net hospitals are in the red. Providers are worried that they won’t be able cover their employees’ wages. In this special section, City & State delves into these issues, and more – water contamination in Hoosick Falls, the threat of the Zika virus, the ongoing opioid abuse epidemic – as we take the pulse of medical care across the state.
CONTENTS 26 … NEW YORK CITY’S PUBLIC HOSPITAL SYSTEM IS BLEEDING MONEY By Bob Hennelly
30 … HOW MEDICAID REFORMS ARE THREATENING THE FUTURE OF SAFETYNET HOSPITALS By Gabe Ponce de León 36 … A $15 MINIMUM WAGE COULD BE A HURDLE FOR HOME HEALTH CARE By Ashley Hupfl
Every day CSRA makes a difference in how the government serves our country and our citizens. This year, CSRA's New York Health and Human Services team celebrates our 30-year legacy of working closely with our State and Local government partners to provide reliable service to New York's citizens by helping millions of New Yorkers gain access to higher quality healthcare and health insurance through New York's Medicaid Program (eMedNY) and the New York State of Health™ Marketplace.
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Spotlight
BLEEDING MONEY
In time of transformation, New York City’s public hospital system faces funding crisis By BOB HENNELLY
From left, NYC Health + Hospitals President and Chief Executive Ramanathan Raju, New York City Department of Mental Health and Hygiene Commissioner Mary Bassett, Mayor Bill de Blasio, Gov. Andrew Cuomo and state Health Commissioner Howard Zucker hold a press conference at Bellevue Hospital Center, where a doctor was being treated for Ebola in October 2014. IT WAS A rare and effective Empire State leadership tableau on display when Gov. Andrew Cuomo joined New York City Mayor Bill de Blasio at a press conference to update an anxious public on the status of the city’s first Ebola patient. The men were joined at the Bellevue Hospital Center briefing on Oct. 23, 2014, by New York City Health Commissioner Mary Bassett and Ramanathan Raju, the
city’s public hospitals chief. The measured tone of the presentation exuded a calm competence that the city, the nation, indeed the world needed at a time when bungled public health responses, both in West Africa and Houston, had raised serious concerns about the world’s ability to respond to the deadly disease. All these months later, it’s easy to forget the anxiety as 100 medical professionals succumbed to the
exotic infectious disease, with many more falling gravely ill. Ebola had easily jumped oceans with a jet-age efficiency, faster than it appeared we could fashion a response to stop its advance. As it turned out, consistent public investment in New York City’s municipal health system, which dates back to the 19th century, was paying real dividends of global consequence in the 21st. “And we want to emphasize that
New York City has the world’s strongest public health system, the world’s leading medical experts, and the world’s most advanced medical equipment,” de Blasio told reporters that day. “We have been preparing for months for the threat posed by Ebola. We have clear and strong protocols, which are being scrupulously followed and were followed in this instance. And Bellevue Hospital is specially designed for isolation,
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identification and treatment of Ebola patients. Every hospital in the city is prepared in the event that other patients come forward.” A few weeks later, the patient, Dr. Craig Spencer, left Bellevue a cured man. In retrospect, New York City’s response was a critical turning
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medical safety net model is now facing a tidal wave of red ink that’s projected to grow exponentially. From 2008 to 2014, HHC was losing more than half a billion dollars annually. According to a city filing on September 2015 with the state Financial Control Board, the
BARELY SIX TEEN MONTHS LATER, THAT SAME PUBLIC HOSPITAL SYSTEM IS FACING PERHAPS THE GREATEST FINANCIAL CRISIS OF ITS E XISTENCE . point in the global crisis. At a time of collective high anxiety, the value of New York City’s public hospital system proved to be priceless. Yet, barely sixteen months later, that same public hospital system – formerly known as the Health and Hospitals Corporation and now rebranded as NYC Health + Hospitals – is facing perhaps the greatest financial crisis of its existence. FORMED IN 1969, the city’s municipal hospital system for decades has provided the kind of universal health care in the real world that still remains an aspirational talking point in our national politics. In New York City no one is turned away, and unlike at other hospitals the city’s public hospitals don’t have the cost saving option of just stabilizing the seriously ill patients and transferring them out to some other facility. They keep patients until they’re well. “With the city’s system the mission is that everyone has a right to health care no matter who you are, what ZIP code you come from, or even your immigration status,” said Kevin Collins, the executive director of the Doctors Council, an SEIU affiliate that represents the 2,500 doctors and dentists who staff the city’s 11 acute care hospitals and dozens of outpatient facilities and clinic sites across the five boroughs. However, New York City’s
municipal hospital system’s yearly operating losses are projected to double from $984 million in 2016 to $1.83 billion by 2019. When you add in debt service the numbers are even more dire, with a $1.1 billion loss in 2016 jumping to a $1.95 billion shortfall in 2019. The trend lines show a system with declining revenue, even as costs continue to spike. In March of 2014 the city’s Independent Budget Office listed the system’s challenges: repeated state and federal cuts, decreased
Dr. Craig Spencer is cleared of Ebola and discharged from Bellevue Hospital Center in November 2014.
patient utilization of the system’s facilities, a patient base heavily weighted toward the indigent, the uninsured and those on Medicaid, and “stubbornly high labor costs.” The city’s municipal hospital system does not operate in a void. For decades, national efforts at health care cost containment and advances in medicine combined to reduce the need for hospital beds as the nation shifted to outpatient services and one-day procedures. Over the same period, even as actual medical costs nationwide continued to rise in the era of “managed care,” federal reimbursement rates were cut. Hardest hit were the big urban teaching hospitals and “safety-net” public hospitals that were providing medical care for the tens of millions of people who lack insurance and the swelling ranks of undocumented immigrants. In essence, these are the critical portals through which a potential Ebola risk could float, as it did, undetected. Nowhere was this battle over which hospitals should be declared an unnecessary “surplus” more bitter than in New York City. The process of “right-sizing” the number of hospital beds in a community has been fraught with
bitter politics that often pitted constituencies against one another. All too often, community activists found themselves unable to counter health care systems and real estate developers who saw selling off of a hospital campus as a “win-win.” Advocates warned that if keeping a local hospital open was purely decided on short-term economics, historically poor and disadvantaged neighborhoods of color, already dealing with the legacy of health care disparities, would lose even more ground. Since 2003, 16 hospitals in New York City have closed. As public advocate and a candidate for mayor, de Blasio was arrested in a high-profile protest of the closure of Brooklyn’s Long Island College Hospital, which was founded in 1858. Although de Blasio went on to win the mayoralty, the hospital was ultimately closed in 2014. THE STAGE WAS set for the New York City municipal hospital system’s latest and most daunting crisis in 2010 and 2011. After years of inaction in Washington, D.C., and Albany, the election of President Barack Obama in 2008 and of Cuomo in 2010 would bring seismic changes in health care.
SAFE STAFFING
SAVES LIVES! THE TIME IS NOW
PA S S T H E S A F E S TA F F I N G F O R
Q UA L I T Y C A R E AC T
New Yorkers are rallying around safe staffing:*
95%
85%
have positive opinions of nurses
favor Safe Staffing legislation
Towns and localities are supporting safe staffing:
67%
think hospitals don’t have enough nurses
ULSTER COUNTY
TOWN OF CHEEKTOWAGA
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LE ARN MORE AT:
CAMPAIGNFORPATIENTSAFET Y.ORG
NEW YORK STATE AFL-CIO
PUBLIC EMPLOYEES FEDERATION
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WORKING FAMILIES PARTY
COMMUNICATIONS WORKERS OF AMERICA, DISTRICT 1
MAKE THE ROAD NY
COMMITTEE OF INTERNS AND RESIDENTS / SEIU HEALTHCARE
NEW YORK STATEWIDE SENIOR ACTION COUNCIL
NEW YORK STATE ALLIANCE FOR RETIRED AMERICANS NEW YORK COMMUNITIES FOR CHANGE COALITION FOR ECONOMIC JUSTICE METRO NEW YORK HEALTHCARE FOR ALL
CITIZEN ACTION OF NEW YORK
*2015 Mellman Group survey of 1000 New Yorkers
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Health + Hospitals chief Ramanathan Raju Obama’s landmark Patient Protection and Affordable Care Act, passed in March 2010, aimed to reduce the number of uninsured Americans, but it also expressly prohibited the participation of millions of America’s undocumented residents. In addition, the landmark legislation promised reductions in federal support for safety net hospitals, like New York City’s public hospitals, for charity care. The logic was those indigent care costs should be ratcheted down as the number of uninsured declined. In 2011, just a few months after being elected, Cuomo appointed a Medicaid Redesign Team with a mandate to rein in the state’s escalating Medicaid spending while improving the quality of the care. The stakes were high. The state was spending $50 billion a year on Medicaid. For a majority of the state’s 62 counties, the cost of Medicaid was half of their annual tax levy, with no relief in sight. New York state spent more than twice the national average on Medicaid on a per capita basis. Its spending per participant was the second highest in the nation, and for all that spending it ranked only 21st in the overall quality of the health care system. The Empire State ranked last among all states when it came to avoidable hospitalizations. By June 2015, Cuomo was able to report that under the Affordable Care Act, 500,000 state residents
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had signed up for Medicaid. At the same time, overall Medicaid spending had “significantly slowed” to just 1.4 percent annually since 2011, as compared to the 4.3 percent hike in costs the state averaged between 2003 and 2010. Thanks to a 2014 deal Cuomo cut with federal Medicaid regulators, the state would make a crucial shift from a fee-for-service model of hospital compensation to a value performance system. This pivot would reward reductions in emergency room visits, reduce hospitalizations and produce better health outcomes. Under the terms of the pact, New York would be entitled to invest $7.3 billion of the resulting savings back into improving its overall health care system. “There are many shifts in NYC Health + Hospitals’ traditional revenue and expenses going on right now because of policy changes on the federal, state and local levels, as well as changes in the health care landscape,” said Erin Kelly, a health budget and policy analyst with the city’s Independent Budget Office. “If NYC Health + Hospitals is definitely at a moment where they need to decide how to respond to these changes and what their strategy is moving forward, they’re certainly not alone in this, as many people are wondering where safety net providers fit in a post-ACA, managed care and highly consolidated health care landscape.” RAJU, NYC HEALTH + HOSPITALS’ president and CEO, is confident that the hospital system that successfully beat Ebola can navigate the challenging road ahead. Despite the two tracks of reform coming from Washington and Albany, he said, major reforms are needed in both how care is delivered and how it is paid for. “The delivery of care in this country has for too many years been purely a physician driven system,” Raju said at the system’s executive offices on Worth Street in Lower Manhattan. “Now we need to be given care by a care coordinator, social worker, nurses, physician’s assistant and nurse
practitioners.” Raju said the only way for the city’s system to get into the black is to increase its market share by improving the level of patient satisfaction and turning patients “into our ambassadors,” promoting the system by word of mouth. Raju is banking on the expansion of the municipal system’s MetroPlus health insurance plan from its current half a million subscribers to one million in five years. To be competitive in a marketplace increasingly driven by patient choice, Raju said the city’s health care system must be easily accessible both physically and culturally. But while Raju hailed the passage of the Affordable Care Act, he acknowledged that it does have gaps, such as not extending coverage to undocumented immigrants, a big part of the patient base of New York City’s public system. By some estimates there are about half a million undocumented New Yorkers, and roughly half of them are uninsured. According to Raju, excluding the undocumented from coverage is a mistake. NYC Health + Hospitals’ edge in the battle for patients is the diversity of its 38,000-plus employees, Raju said. “We have one great advantage: You can come from anywhere in the world, and you can come in and I’ll be able to find you somebody from your part of the world who speaks your language and looks like you.” Collins, the executive director of the SEIU Doctors Council, said his workforce is very much engaged in improving the patient experience in working with the system’s management and the broader community. Through what Collins calls collaborative councils, the medical professionals he represents in New York City are empowered to have a meaningful role in the decisionmaking about how best to improve patient care. “You improve the patient experience through the engagement of front-line doctors who are not just being told what’s going to happen,” Collins told City & State. Even in a best-case scenario, achieving Raju’s goals is still a few
years off. It’s not clear, based on just how much red ink there is on the system’s books, how much time he really has. IN HIS STATE of the City address, de Blasio called for a $337 million cash infusion into the city’s financially strapped municipal hospitals. At a press conference, de Blasio committed to releasing his own strategy that would “figure out long-term financial stability and viability” for the city system. “It’s premature to start to outline it until it’s all done, but it’s going to have to put Health + Hospitals on a strong footing for years and years to come in a substantially changed health care environment,” de Blasio told reporters. “And we now know many good things came out of the changes at the federal and state level – I want to be very clear, a lot of good came out of Obamacare, a lot of good came out of the Medicaid reforms, but some real unintended consequences, too,” the mayor continued. “We now have that picture and we’re going to have to adjust for a very different future.” Right now, the short-term fiscal future of the city’s hospital system, the largest in the country, is at best murky. It’s likely the mayor’s plan for ensuring the long-term sustainability of the city’s hospital system will come out later this spring around the time of his proposed budget. No doubt, this is a heavy lift that the city can’t do alone. State officials play a key role in terms of hospital funding, and Cuomo’s initial budget, released in January, only increased concerns inside City Hall. The governor’s budget appeared to shift to the city Medicaid costs historically borne by the state, to the tune of a $1 billion by 2020. In public statements since, Cuomo has said his budget is only aiming at efficiencies, not actual cuts. “It won’t cost New York City a penny,” Cuomo insisted. Cuomo and the state Legislature have until their April 1 deadline to frame a final budget, at which time the de Blasio administration will know just how much of a partner they have in Albany.
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Spotlight
SYSTEM FAILURE
How Medicaid reforms are threatening the future of safety-net hospitals
Brookdale University Hospital and Medical Center in Brooklyn BROOKLYN’S BROOKDALE University Hospital and Medical Center is on life support. In the past two years alone, Gov. Andrew Cuomo’s administration has spent well over $600 million propping up safety-net hospitals around the state. More than half of that total has gone to four community hospitals serving lowincome populations in Brooklyn: Brookdale, Interfaith Medical Center, Kingsbrook Jewish Medical Center and Wyckoff
Heights Medical Center. And of the millions in bailout dollars that have flowed to those four hospitals, Brookdale has taken in more than half. Like many of the 28 struggling hospitals on the state’s recently released “watch list,” Brookdale has eked by for years thanks to repeated government bailouts. In 2014 alone, the hospital received $158.6 million in state grants. Its working capital deficiency for the year, the most recent for which
financial filings are available, was $113.6 million. That same year, Brookdale was awarded $78 million through a capital grant program, created under the 2004 Health Care Efficiency and Affordability Law for New Yorkers, to help providers restructure their operations. The 530-bed Brownsville facility, which had run a $166 million working capital deficiency the previous year, used the grant to repay previous obligations to the
Health Care Restructuring Pool, a loan program established under the 1996 Health Care Reform Act. From 1999 to June of last year, Brookdale received $160 million in commitments through the fund, more than any other institution. Other taxpayer-funded programs that have provided cash assistance to faltering hospitals include the state’s Vital Access Provider Assurance Program and, via a federal Medicaid waiver, the Interim Access Assurance Fund and the Value-Based Payment Quality Incentive Program. The state has additionally allocated tens of millions of dollars toward debt service obligations arising from a bond program dating back to the 1980s, and Brookdale, Interfaith and Wyckoff Heights have all been delinquent on their payments in recent years. Cuomo’s current budget proposal includes another $449 million in funding for struggling hospitals through the Vital Access Provider Assurance Program and ValueBased Payment Quality Incentive Program. The state Department of Health declined to provide City & State with any details regarding its longterm strategy for stabilizing the hospital system, but said it intended to finalize a plan in the near future. SINCE 1990, more than 50 New York hospitals have either closed or been taken over – and significantly downsized – by larger networks. Like many of those that have closed, the hospitals under the greatest financial pressure tend to be small or medium in size and serve predominantly low-
PHOTOS BY DYLAN FORSBERG
By GABE PONCE DE LEÓN
High quality and low cost?
That’s what I’m talking about. C A L L 1. 8 5 5 . 8 0 9. 4 0 7 3 M E
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income populations. In the wake of recent state and federal reforms, many are struggling to adapt to a reimbursement landscape in which payment is increasingly tethered to performance – and market clout is more critical than ever. “A community hospital that is a stand-alone hospital does not have sufficient market share to negotiate good rates with the insurance companies,” Kevin Finnegan, the outgoing political director of 1199 SEIU, the state’s largest health care workers union, told City & State last year. “Overall, Medicaid and Medicare payments have been dropping for most hospital stays. Hospitals lose money on Medicaid, and mostly on Medicare as well.” The importance of leverage for a provider is not limited to negotiating rates for commercially insured patients. With the expansion of managed Medicaid, in New York and around the country, hospitals increasingly have to negotiate Medicaid reimbursements with private entities as well. Under managed care, the state pays health plans a fixed rate per beneficiary; the insurer, in turn, assumes responsibility for all of that individual’s medical care, negotiating its own rates with providers. “Rates depend upon the contractual relationship that a hospital has with the health plan, and that would depend on the relative strength of the hospital in a particular market,” said Teresa Coughlin, a senior fellow in the Health Policy Center at the Urban Institute. Managed Medicaid is a tool states use to try to increase predictability and gain control over health care spending. That the program’s contractors assume the risk for the cost of care provides incentives to reduce expenditures related to unnecessary hospitalizations, health officials claim, while improving population health through greater attention to preventive care. But while fewer hospital admissions can reduce costs (and hospital revenues), some research has suggested that savings generated through managed
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Medicaid can result from lower reimbursements to providers, more than any efficiency gains. Unlike Medicaid fee-for-service reimbursements, rates negotiated between providers and managed care organizations are not publicly disclosed, but according to a state Health Department document, in 2012 health plans paid Brooklyn hospitals approximately $3,500 less, on average, per Medicaid discharge than under fee-forservice. “If you are a hospital and already gasping for air because Medicaid was paying you ‘X,’ now the managed Medicaid people come and say we are going to pay you $3,500 less per discharge. And they can get away with it because none of this stuff is public,” said Fred Hyde, a clinical professor at Columbia University’s Mailman School of Public Health and independent consultant whose clients include public employee unions. As of January, nearly 4.5 million New Yorkers were enrolled in managed Medicaid. Over the past three years that figure has grown by around 1.5 million – and more than doubled since 2008. Eighteen for-profit, nonprofit and government-run managed care organizations currently operate in New York, where Medicaid spending accounted for a quarter of the state’s operating budget when Cuomo took office. To help close a $10 billion budget deficit, his administration launched an aggressive redesign of Medicaid, which saved billions of dollars without removing people from the rolls or significantly reducing benefits, thanks in large part to reimbursement cutbacks to providers and managed care organizations. The administration, moreover, committed to a global Medicaid spending cap, and since 2011 the average annual growth of Medicaid expenditures has been 1.4 percent, after increasing at an annual rate of 4.3 percent between 2003 and 2010. “The state Medicaid program is operating under a self-imposed
limit on total expenditure increases,” Hyde said. “That is why it’s rushing to distribute financial responsibility to managed care outfits, which are shorting hospitals in order to fit under the cap.” The gradual phasing out of Medicaid fee-for-service payments is part of a broader shift in the reimbursement landscape – one driven, in large part, by the 2010 Affordable Care Act. Not only have some states ramped up their managed care programs in response to Medicaid expansion, but the federal government has sought to offset some of the cost of expanding coverage through changes to Medicare reimbursement. “The legislation adds billions of dollars in additional spending to the health care sector, because all these new people are covered, but reimbursement per unit of service is being pressured,” said Martin Arrick, a managing director at Standard & Poor’s Ratings Services. The ACA called for $716 billion in Medicare savings, a large portion of that to come through the implementation of payment reforms designed to reward “value over volume,” with financial incentives to keep patients healthy through preventive care and early disease detection rather than
episodic care following illness. Under value-based payment, providers can be penalized for hospital-acquired conditions, readmissions and failure to satisfy other performance metrics. Some health policy experts, however, believe such penalties disproportionately affect safety-net providers, which often lack the technology and other resources to successfully adapt to the system. Safety-net hospitals, moreover, tend to serve communities with fewer primary care physicians (which could account for some preventable admissions and avoidable emergency room visits) as well as patient populations presenting higher rates of co-morbidities – chronic conditions often compounded by socioeconomic challenges, such as housing insecurity. “There are a lot of truths floating around,” Arrick said. “One of those is that hospitals are getting paid less in general – at least on an inflation-adjusted basis – but they also have to get more efficient and do a better job.” While safety-net providers, in theory, stand to gain from the expansion of coverage under the federal law, some could struggle to retain clients who, with new insurance cards in hand, opt for
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care at more prestigious facilities. The cutbacks under Medicaid redesign also discourage doctors from participating in the Medicaid program, resulting in scarce primary care options in poor neighborhoods, which in turn drives people to go to the emergency room for more expensive care. In response to state and federal reforms, providers all along the health care continuum have had to adapt to delivery systems that are transitioning from fragmented hospital-based patterns of care to more integrated outpatientcentric models, with the aim of providing care in the most costeffective settings. Many safetynet hospitals, however, lack the resources to sustain their day-today operations, let alone upgrade physical plants or invest in the equipment and technologies needed to update their business models. Last year, the Cuomo administration secured a multibillion-dollar federal Medicaid waiver, making good on the promise that brought hospital and labor leaders on board with the cutbacks made under its redesign effort. The waiver will allow the state to reinvest $8 billion in expected federal savings generated from that Medicaid overhaul, with $7.3 billion flowing into the Delivery System Reform Incentive Payment, a restructuring program whose aim is reducing avoidable hospitalizations 25 percent in five years through the formation of integrated provider networks. IN BROOKLYN, BARRIERS to health care are often related to race and ethnicity, with disparate outcomes evident in high rates of chronic disease, such as obesity, hypertension and diabetes. With 1 million Medicaid beneficiaries – and 15 percent of borough residents uninsured – local providers are heavily reliant upon state Medicaid policy, particularly centers that serve populations with relatively few private pay patients. At Brookdale, for instance, Medicaid patients accounted for approximately half of its total discharges in 2014.
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Years of fiscal stress and indebtedness have likely contributed to poor quality ratings among the struggling Brooklyn four. A 2011 Medicaid Redesign Team report found that “Brookdale’s performance was particularly poor, with less than 40 percent of its patients indicating that they would definitely recommend the hospital. Wyckoff Heights and Interfaith also scored poorly – less than 50 percent of their patients reported that ‘they would definitely recommend the hospital.’” “It was tricky to advocate for hospitals to stay open when people felt that the quality was terrible, or not as good as they wanted it to be,” said Shena Elrington, a health policy expert at the Center for Popular Democracy. “I felt that community members want their hospitals to stay – stay but get better.” A total of five Brooklyn hospitals have closed since 2003, including St. Mary’s, which was less than two miles from Brookdale. Part of the underlying challenge for providers is that many of Brooklyn’s most lucrative patients – the commercially insured, those in need of highly specialized procedures – have historically migrated to medical centers in
Manhattan. But what if Manhattan, instead, were to cross the river, bringing its reputation and revenues to Brooklyn? Given the current reimbursement environment, some see few alternatives to cross-borough coupling. “Community hospitals need to be aligning themselves with larger systems,” Finnegan said. “The state wants to see big, prosperous institutions pick up more of the poor people,” Hyde said. “Big, prosperous institutions can offset the losses from caring for the poor by caring for commercially insured patients.” While large networks historically avoided the borough, more recently Brooklyn’s payer mix has become more attractive. Northwell Health, formerly North Shore-LIJ, recently entered into a partnership with Maimonides, while NYU Langone partnered with Lutheran Medical Center. The facilities, however, are not among those requiring regular bailouts to stay afloat. “The bigger systems that we’re rating are reaching into Brooklyn,” Arrick said. “It’s a big population mass, and they want in, but they also are somewhat protective of their own financial position.” The Greater New York Hospital
Association recently called on the state to provide $2.5 billion in funding over the next five years to enable the larger hospital networks to absorb struggling community hospitals. GNYHA President Ken Raske said his plan would forestall future closures and eliminate the need for repeated government bailouts by allowing the larger systems to “adopt and adapt” struggling safety-net hospitals to “the new health care world.” “We’ve seen time and time again major systems kick the tires on a distressed hospital, only to walk away because it had serious implications on the financial corpus of the health care system, so this plan is intended to neutralize the impact for those health care systems to go forward and assist those very needy communities throughout New York,” Raske told City & State. Others question the wisdom of injecting additional billions of taxpayer dollars into the hospital sector. “Taking that level of money and allocating it to hospitals that already receive a significant amount of state dollars is just not the best use of our limited health care resources,” said Leslie Moran, senior vice president of the New York Health Plan Association. “We have enormous amounts of
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spending currently on hospitals.” Moran cited the $8 billion Medicaid waiver, as well as stillunspent allocations of $700 million for capital projects in Brooklyn and $1.2 billion capital restructuring – along with continued government support through other programs – as evidence that the hospital sector is already awash in public dollars. NYHPA has also argued that consolidation within the sector leads to higher premiums and an overall rise in costs. “Once you have that type of consolidation (among the large systems), it puts a lot of price pressure on their contracting with insurers, which again drives up costs,” Moran said. According to Raske, absent a long-term solution to the problem, additional community hospital closures would have the same effect as consolidation. In an interview in November,
1199’s Finnegan told City & State that large networks “rely on the state for a million different things, and the state can leverage that reliance to get them to help out in different parts of the city. And perhaps the state hasn’t done enough of that, but they should, in my view. You can have an efficient community hospital that may lose some money on its own, but it can also be a feeder to the larger hospital system.” But there are limitations, some believe, to how much pressure the state can exert. “Each decade there are fewer community hospitals, and prestigious teaching hospitals have more leverage,” said Alan Sager, director of Boston University’s School of Public Health. “If you haven’t got a stick,” Sager added, “you have to use a carrot. And what’s the carrot? More money. You spend money to save money.”
Quick Takes
The state budget this fiscal year included $700 million in capital funding for Brooklyn’s health care system, and there have been suggestions that a large portion of the pot could be applied to the construction of a new hospital. Though official plans are yet to be announced, the possibility of a replacement Brookdale facility has been bandied about. Last year, Brookdale’s occupancy rate was just 51 percent, and as recently as 2010 none of Brooklyn’s most financially strained hospitals had a utilization rate above 66 percent. In his executive budget last year, Cuomo stated that the $700 million would stabilize and improve Brooklyn’s health care system in part by reducing “unnecessary inpatient beds.” Nonetheless, some question the merits of downsizing, arguing that the cost of maintaining unstaffed beds is
Quick Takes
ON HOW NEW YORK CITY IS PREPARING FOR THE ZIKA VIRUS...
MARY BASSETT COMMISSIONER, NEW YORK CITY DEPARTMENT OF MENTAL HEALTH AND HYGIENE
“It’s important to reiterate that there is virtually no risk of acquiring Zika virus in New York City at this time, as Zika virus cannot be spread by casual contact with an infected person and mosquitoes are not active in cold winter months. But many New Yorkers will travel to warmer climates this winter for vacation, including countries where the Zika virus is prevalent. Those travelling should take preventative measures, and pregnant women should delay travel. Pregnant women who have recently traveled to affected countries should consult with their doctor. “Moving forward, the Health Department is increasing its surveillance of the virus on two levels: one, for New Yorkers that may be infected with Zika; and two, for the species of mosquitos that are capable of harboring Zika virus. “Additionally, we are planning and marshalling resources ahead of mosquito season, which typically begins in April. The agency will be building upon its comprehensive West Nile virus mosquito control infrastructure to increase its search for the Aedes mosquitoes. “Finally, the Health Department is increasing public awareness of the disease through communication with physicians, providers, elected officials and community-based organizations. We are also planning a public awareness campaign that will focus on how New Yorkers can protect themselves from mosquitoes.”
HOWARD ZUCKER COMMISSIONER, STATE DEPARTMENT OF HEALTH
relatively low and that Brooklyn is already below the national average in beds per thousand residents. Without addressing the underlying issue of funding, could building a new facility amount to throwing good money after bad? And could such an investment be counted on to leave borough residents more medically secure? Even leaving aside the potential long-term cost of constructing a new facility, skeptics point out that shedding beds and consolidating capacity is itself no guarantee of savings. “Some people like to imagine that we can close hospitals, catch the savings in a bucket and move it over to primary care,” Sager said. “But has hospital care in New York City gotten more affordable in the wake of all these closures? Less expensive hospitals close and more expensive ones stay open. Where do you get a cheap appendectomy?”
ON WHAT IS THE STATE DEPARTMENT OF HEALTH IS DOING TO HELP THE CITIZENS OF HOOSICK FALLS ... “New York State is deeply concerned about the perfluorooctanoic acid (PFOA) contamination in Hoosick Falls. The Department of Health and Department of Environmental Conservation are working closely to take aggressive steps to protect public health and the environment in that community. The work currently being done in the Hoosick Falls community will lay the groundwork for the state in the event that it is called to respond to similar situations in the future. “Among the actions taken so far: ■ The governor recently announced the creation of a Statewide Water Quality Rapid Response Team, cochaired by the commissioners of DOH and DEC, that will swiftly address critical drinking water contamination concerns, as well as related groundwater and surface water contamination problems. ■ The governor also announced that the state has begun planning for a possible alternate water supply in the village of Hoosick Falls – ensuring that the community has a new, permanent supply of clean water. ■ Further, Gov. Cuomo stated that the state will purchase and install water filtration systems for approximately 1,500 homes in the Town of Hoosick, if a homeowner wishes to have such a system installed. As a precaution, the state has committed to installing water filtration systems at the local school, public health facilities and other community gathering places.”
49 states have a HEALTH INSURANCE GUARANTY FUND. Guess which state doesn't?
New York The failure of Health Republic left consumers scrambling for new coverage, and hospitals and doctors statewide are still owed hundreds of millions for patient care services they already provided. That’s why we need a Guaranty Fund to protect New York patients and providers in the event another health insurance company goes broke. New York is the only state in the country without one. Albany must act to ensure that families keep their coverage and healthcare providers aren’t left with massive unpaid bills.
Tell Albany we need a Health Insurance Guaranty Fund to learn more, visit WWW.NYGUARANTYFUND.ORG
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Spotlight
$15 MINIMUM WAGE: A HURDLE FOR HOME HEALTH CARE? By ASHLEY HUPFL
HOME HEALTH CARE providers in New York have grown accustomed to doing more with less in recent years as they grapple with late government payments and new costs imposed by the state. Now, as Gov. Andrew Cuomo moves forward with his controversial proposal to raise the state minimum wage to $15 an hour, providers fear that a wage hike would be devastating for this critical sector. “What we’ve been getting lately (from the state) is delayed payments years later, but this hit is so significant on the home care industry, there just won’t be any years later,” said Laura Haight, vice president for public policy at the New York State Association of Health Care Providers, which represents home care providers. “If we want home care to be there when we need it, we need that investment upfront before this kicks in. We’re simply at the stage where we can’t absorb any further cuts.” The Greater New York Hospital Association and the Healthcare Association of New York State have expressed similar concerns about increased labor costs in hospitals and nursing homes, although the governor’s budget does include a $195 million capital fund to help financially struggling hospitals and a Medicaid funding increase of 3.4 percent – $588 million more than the previous year. HANYS’ written budget testimony estimates that the minimum wage increase would cost hospitals $570 million and home
care providers a whopping $1.7 billion annually. Indeed, legislators in both the Assembly and the state Senate have expressed particular concern about how home care providers will deal with a $15 minimum wage. “There are other questions on whether the state is going to fund any of these costs that certainly would have an effect on our budget, and that’s going to be one of the hottest issues in our budget for sure,” state Senate Majority Leader John Flanagan told reporters in mid-February. “If the state of New York says you have to have a $15 minimum wage, if they pay for it, that makes it a lot more powerful, but the governor certainly didn’t put any money in his budget to do that.” Earlier in February, Assembly Health Committee Chairman Richard Gottfried told City & State that ensuring proper reimbursement for the costs of raising the minimum wage is one of his priorities for the 2016 legislative session. “There are hundreds of thousands of very low-paid home health aides and direct care workers who work in other human services agencies that are almost entirely funded by Medicaid or other state programs, and I believe we need to raise their wages and raise the state reimbursement rate to their employers so that they can pay those wages,” Gottfried said. “It would make sense to provide in the budget raise increases for those low-wage workers that are essentially the state’s responsibility
– home health aides and other human service workers. That’s going to be a struggle.” Flanagan said one of the difficulties his conference has faced is getting accurate information on the costs. The Cuomo administration says it is looking into the potential costs in the health care sector. “This administration believes in a fair day’s pay for a fair day’s work – especially for home health aides who provide an essential service to our most vulnerable New Yorkers,” Abbey Fashouer, deputy press secretary for the Cuomo administration, said in a statement. “The governor is committed to raising the minimum
IF THE STATE OF NEW YORK SAYS YOU HAVE TO HAVE A $15 MINIMUM WAGE , IF THEY PAY FOR IT, THAT MAKES IT A LOT MORE POWERFUL , BUT THE GOVERNOR CERTAINLY DIDN’T PUT ANY MONEY IN HIS BUDGET TO DO THAT.
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JOHN FLANAGAN state Senate majority leader
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wage, while at the same time continuing to improve the state’s Medicaid program and maximize taxpayer dollars. We are reviewing the associated costs and remain confident that there is a way to do both.” The Association of Health Care Providers, which represents about 400 home and community-based home care offices, has already dealt with at least two significant cost increases in recent years. The Home Care Worker Wage Parity Law, which took effect in 2012, establishes a minimum wage requirement for home care aides who perform Medicaid-reimbursed work. Then, this past October, a federal rule change increased overtime costs, Haight said. In addition, in 2011 the state began an effort to rein in Medicaid costs by implementing a “global spending cap,” limiting spending growth to the 10-year average of the medical component of the inflation
index. Cuomo’s proposed executive budget for the upcoming fiscal year would make the cap permanent. About 85 percent of home care services are provided through Medicaid, according to the Association of Health Care Providers and 1199 SEIU, which represents 400,000 health care workers in the Northeast, including home care workers. “We of course support the need to pay workers more and, of course, for recruitment and retention purposes, we want to be able to pay our workers more, but for a number of years now there has been ongoing cuts to home care reimbursements,” Haight said. “Right now, we’re operating on such a narrow margin that when the overtime law went into effect in October, with no funding whatsoever, a lot of our industry had to restructure how they did their shifts or reduce overtime or stop taking cases that require a lot
of overtime because the Medicaid compensation was not there to support it.” Despite the concerns Haight has about the potential ramifications of the minimum wage hike, if the state were to cover the costs, she said, her organization would throw its support behind the push. The health care union 1199 SEIU, which supports the proposed $15 minimum wage, is working with the governor and the state Legislature to understand what the costs will be. “It is true that the state is going to have to invest additional dollars into Medicaid reimbursement to make sure that providers of these services can afford to pay the workers more as the minimum wage goes up,” said Helen Schaub, state policy and legislative director at 1199 SEIU. “We think that there have been some estimates that have been exaggerated about what the
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Medicare Advantage & Medicaid health plans for our community.
cost is.” Schaub said 1199 SEIU estimates the additional cost in the first year the minimum wage would be phased in would cost $166 million for all sectors – including hospitals, nursing homes, home care and other non-Medicaid services. Haight put that cost at $266 million in the first year for just the home care industry. The push for a higher statewide minimum wage comes after Cuomo used a wage board last year to increase minimum hourly pay for fast-food workers to $15 and announced the same raise for state workers. “No one has said they don’t agree that workers deserve to be paid more,” Haight said. “The issue is, ‘How do you make that happen when we’re underfunded and we can’t just raise our rates?’ We’re not like McDonalds – we can’t just raise the price of our french fries.”
At Amida Care, there’s a whole team of people behind your health care.
”
–Jimmy W., Member, Amida Care Live Life Advantage
At Amida Care, our members matter. We help you live your life—well.
Learn more: 1-844-899-CARE (2273) TTY 711 • www.AmidaCareNY.org Amida Care (HMO) is a not-for-profit health plan with a Medicare Contract. Enrollment in Amida Care depends on contract renewal. This information is available for free in other languages. Please call our member service number at 888-963-7092 or TTY 711, 8 am to 8 pm, Monday to Friday (every day October to February). Esta información se encuentra disponible en forma gratuita en otros idiomas. Por favor llame a nuestro número de atención a los miembros al 888-963-7092 o TTY 711, de 8 a.m. a 8 p.m., de lunes a viernes (todos los días de octubre a febrero). H6745_4002_M&MCommunity Accepted 11/22/15
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Quick Takes
KEMP HANNON CHAIRMAN, STATE SENATE HEALTH COMMITTEE
CityAndStateNY.com
ON COMBATING THE STATE’S HEROIN EPIDEMIC... “There needs to be sustained improvement in rehabilitation services, interventions with people who have multiple recoveries from overdoses via Naloxone and to make sure there is equitable treatment to pay for the rehabilitations by the insurance companies. Everybody seems to jump for joy when they see they lowered the price (of Naloxone) or they’ve made it more available, but 10 years ago I passed legislation allowing Naloxone to be carried by the emergency medical people. Ten years ago. So people are just continuing to discover it now. My point would be that it’s not enough to just revive people; we need to get people out of the cycle of addiction.”
Hospitals are there for you. Be there for them. Every minute of every day, New York’s hospitals provide vital services to meet the needs of your communities, including emergency and trauma services, obstetrics, burn care, and more. That’s why we are urging the Legislature and the Governor to: • address the urgent need for additional capital funding; • fully fund any minimum wage increase; • address unpaid Health Republic bills and protect against future health plan failures; • oppose damaging proposals; and • release funding promised in prior budgets.
www.hanys.org
Quick Takes
RICHARD GOTTFRIED CHAIRMAN, ASSEMBLY HEALTH COMMITTEE
ON THE RISING COST OF PRESCRIPTION DRUGS... “I would like to see New York deal with rising prescription drug prices, both for the Medicaid program and for the rest of the population. Five years ago we, over my objection, largely dismantled the state’s preferred drug program, which had been negotiating rebates with drug manufacturers for the Medicaid program. We turned over the prescription drug benefit to each Medicaid managed-care company to negotiate on their own. The preferred program now only applies to the probably 100,000 or 200,000 fee-for-service Medicaid plans. I believe if we were negotiating on the behalf of the roughly 6 million Medicaid recipients we would have a lot more negotiating power with drug companies than any individual Medicaid managed-care plan, which would help bring down costs for the Medicaid program. I would also want to invite non-Medicaid health plans to piggyback on the preferred drug plan, which would enable those health plans to take advantage of the lower prices.”
New York’s Hospitals and Doctors Have the Highest Medical Malpractice Costs— and That Makes No Sense Despite fewer adverse events and scoring high on numerous quality measures, New York’s world-class hospitals and doctors spend billions annually on medical malpractice costs—by far the nation’s highest. It’s stark proof of a deeply flawed system in need of sensible reforms.
Let’s do something about this. Tell your State Senator and Assembly Member: It’s time to fix New York’s medical malpractice system and its out-of-control costs.
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NYSlant.com
A fresh perspective on opinions Edited by NICK POWELL Our Slant
A health care transformation THOMAS EDISON’S LIGHTBULB changed the world, but we know from history that adapting to change wasn’t easy or fast. Like the game-changing lightbulb, one of the most important transformations to occur in health care is value-based payment. A small number of health plans in New York state have carved the path for this transformative reform policy – moving from paying for the number of services provided to paying for quality of health outcomes – and it’s revolutionizing the health care system. For too long,
AMERICANS HAVE PAID TOO MUCH AND RECEIVED TOO LITTLE from their health care spending. The model in which payment is made solely based on the number of services performed won’t help us maintain the best health care system in the world. That model rewards waste, and encourages more care rather than the right care. Value-based care replaces paying for a whatever-you-get system, and instead moves the focus to the quality of care being provided. The path forward requires health plans, physicians and hospitals to work together to ensure that patients receive the right care, at the right time, and in the right place. This involves both rewards and risk sharing, and entering into relationships with many of New York’s leading clinicians and hospitals that are willing to take responsibility for achieving results. The impact of this change on patients is that it puts them at the center of the system, because providers and health plans are aligned in achieving better health
By KAREN IGNAGNI
outcomes, better quality of service and better results. Currently, more than 60 percent of EmblemHealth’s HMO members have selected a value-based plan. Our physician partners are seeing reductions in inappropriate admissions, reductions in emergency room visits, earlier intervention and better quality. The goals we share with our provider partners are to make care more convenient, increase patient satisfaction, and improve health. We also believe that it’s important that our members and practitioners be connected, and we are using some of the most innovative technologies to provide online scheduling, portable patient records, and data support. New York state has set the goal of moving 80 to 90 percent of payments to a valuebased system. We applaud the state’s leadership and, as leaders in this evolution, we plan to meet that goal much earlier. To accomplish this, we are working actively with our physician group partners but also offering data and infrastructure support to independent doctors that want to embrace this model. As the industry continues to evolve, the shift to quality over quantity will speed up, and New York’s health care will improve. We are committed to playing a leading role in creating a healthier New York, and helping usher in a health care system that is one of the most affordable as well as the most effective.
Karen Ignagni is president and CEO of EmblemHealth.
NICOLE GELINAS -
SLANT COLUMNIST
NEW YORK TRANSIT AND THE LEGACY OF 9/11 Nearly a decade and a half after 9/11, it’s obvious that the foreign-policy decisions Washington made after the attacks were not the best. The recent opening of the new PATH train terminal at the World Trade Center site shows how New York officials, too, fell short of what they owed their state and city. The station is nearly five years late, and cost twice its initial budget. And it does not add train service or make commuting less crowded or faster for the New Jersey subway riders who will use it. Most of the mistakes New York made had nothing to do with 9/11. In fact, they are repeats of the mistakes that have long plagued our infrastructure decisions. First, the Port Authority – and former Gov. George Pataki and his New Jersey counterparts – failed to be realistic about costs, and how an untested design would strain those costs. This failure to control risks and costs is an unfortunate New York tradition. The state’s project to bring the Long Island Rail Road into Grand Central was once supposed to cost $3 billion and be done by 2009, but now costs $10.2 billion and won’t be finished before 2022. The second mistake New York and New Jersey made was their failure to prioritize. Is the station a piece of infrastructure, or a monument? What New York needs, and needed before 9/11, is better transit capacity. New Jersey commuters need a new tunnel under the Hudson River before the existing one, more than a century old, falls apart. New Yorkers need more subway trains per hour to ease crowding. The problem, though, is that these needs aren’t critical in lower Manhattan. But New York had federal money to spend in lower Manhattan, so it did, and when that money ran out, the authority ended up spending its own money – $1.2 billion – on a station it didn’t need. The third problem is our failure to think about the region holistically. The Port Authority is supposed to serve both New York and New Jersey – and do the best it can for commuters. Instead, it runs on a “tit-for-tat” philosophy – doing one thing for New York means doing another thing for New Jersey. After the Port Authority took over Stewart Airport in upstate New York, it had to take over the Atlantic City airport – even though neither project has anything to do with the authority’s mission of improving life for downstate commuters. Nobody in power wakes up thinking, “What are the top three projects that are best for everyone – and how do we get those thing done?” The fourth and final problem is one that afflicts the entire country: thinking that money alone will solve our infrastructure problems. We need money to build and fix infrastructure, yes – more than we’re spending. But if you want to see how money isn’t everything, go downtown and see billions of dollars’ worth of marble and steel that doesn’t help anyone get from Point A to Point B.
NYSlant.com
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The case against consolidating care By PAUL HOWARD AND YEVGENIY FEYMAN SINCE 2012, OVER a dozen hospitals have been acquired by larger systems in New York. Just last month, the Greater New York Hospital Association asked Albany for a $2.5 billion, five-year commitment to help large systems acquire smaller failing hospitals. The reasoning here is simple: Large health systems, with their big budgets, large base of administrators and high-end medical equipment, can help failing hospitals improve their quality of care and make them sustainable. But policymakers should beware – the evidence supporting this claim is slim. First, we shouldn’t take for granted the claim that hospital closures are necessarily harmful. This argument is certainly compelling on its face: Residents may be angry, feel unsafe, and be upset that the hospital they’ve relied on for many years is no longer open to them. But do these kinds of closures actually harm patients? Fortunately, it appears that the answer is no. An important study from last year published in “Health Affairs” from Harvard Medical School and the Harvard School of Public Health examined 195 hospital closures occurring between 2003 and 2011. The results? The authors “found no evidence that hospital closures were associated with worse outcomes for patients living in those communities.” Indeed, analysis from the Medicare Payment Advisory
Commission suggests that poor-performing hospitals – those that do poorly on patient outcomes – share characteristics with those hospitals that have closed over the years because of low margins and low occupancy. There isn’t much reason to financially support hospitals that deliver poor care to their patients. But can large health systems bring these failing hospitals up to snuff? Here too, there is little evidence to say that consolidation outperforms a competitive market. A thorough literature review from health economists Robert Town and Martin Gaynor in 2012 found that not only did less-competitive markets deliver worse care, but they carried higher price tags as well. “Hospital consolidation generally results in higher prices,” Town and Gaynor wrote in their review summary. “When hospitals merge in already concentrated markets, the price increase can be dramatic, often exceeding 20 percent.” Included studies also found lower mortality rates across a variety of conditions in less concentrated markets. These findings align with what one would expect in theory: Competition among many smalland mediumsized firms results in lower prices and/or higher quality products for consumers. Absent this – whatever one might hope to happen through a larger, integrated system –
THE TENDENCY OF MONOPOLIES TO HIKE PRICES AND STAGNATE QUALITY TENDS TO SHINE THROUGH.
Even if we think that there are some unmeasured benefits from large health systems – perhaps they provide some unique care to a small group of patients that eludes our surveys – subsidizing hospital mergers is still a bad direction to move. Indeed, as surgeon and author Atul Gawande notes in “The Checklist Manifesto,” one of the most important tools to improving patient health isn’t fancy equipment that can fail or the most experienced surgeons; it’s simply a checklist. The author recounts how a critical care specialist at Johns Hopkins Hospital used a checklist of procedures for intensive care unit physicians to drive 10-day central line infection rates from 11 percent to zero. Over 15 months, only two central line infections were observed, preventing 43 infections and eight deaths, and saving the hospital $2 million. Of course, checking off all of the boxes isn’t that simple. It requires good management committed to not only the bottom line, but to improving patient care and being willing to learn
from mistakes. Intermountain Healthcare in Salt Lake City is an instructive example. The health system is offering an insurance plan to employers, guaranteeing low annual rate increases; it plans to do so by better applying evidence-based medicine and negotiating better deals with suppliers. As the industry evolves to bring value to patients in a variety of ways, Albany lawmakers should be working to encourage competition, not consolidation. They can do this by lowering barriers to entry in the health care market – for example, by repealing or amending Certificate of Need laws and other provider licensing requirements. The Legislature should also look at increasing consumer access to information, implementing the All Payer Database and requiring care providers to give patients binding cost estimates ahead of services. More market fluidity, combined with transparent pricing, would go a long way toward growing competition. New Yorkers would also be well served by a New York state Health Cost Commission, modeled after a similar body in Massachusetts that submits annual reports on health care cost and consolidation trends. Albany’s focus should be on delivering results to consumers first, on the observable outcomes for patients. While some have fallen for arguments supporting consolidation, only competition has proven to deliver quality care to patients at affordable prices.
Paul Howard is a senior fellow and director of health policy at the Manhattan Institute. Yevgeniy Feyman is a fellow and deputy director of health policy at the Manhattan Institute.
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CityAndStateNY.com
HOMECOMING KING
NATIVE SON LEADS REVIVAL OF BUFFALO’S LAFAYETTE HIGH SCHOOL
John Starkey moved away from Buffalo in 1999, but he never really left. During his 17 years as a Western New York expat, the educator returned often and kept a close eye on his hometown. Starkey, who rose through the ranks of the New York City school system to become a principal at some of the city’s more challenging schools – The International High School at LaGuardia Community College, the Bronx High School of Business, Peace and Diversity Academy – has returned to Buffalo and is at the helm of a restart for Lafayette High School, which was closed after persistently low achievement. The school, which takes in most of the city’s growing number of foreign-born students, is being reintroduced by Starkey and a host of community partners under the Internationals Network for Public Schools model. Starkey sat down with City & State reporter Justin Sondel to discuss the phase-in of the new school next year. The following is an edited transcript.
NANCY PARISI
though personally I was coming back frequently on the weekends, vacations – I needed the right situation to be in, just because what we were doing in New York was so cutting edge and so gratifying professionally, I wanted to make sure that whatever I got into here was something that could be innovative and that there would be some autonomy.
C&S: You said that you have always kept a close eye on the Buffalo school district and general developments in the city. What made you decide that the time was right for a return? JS: For the last 17 years I’ve been coming back as much as I can and just watching the growth of the city and the rise of the English language learning community. So that really grabbed my attention just because that’s what I was doing since I was in Buffalo and then once I left Buffalo, always working with that population. I thought I might have picked up a couple of things in my experiences and that maybe I can pitch in a little bit to what’s going on here and that would be a good niche for me. In order for me to come back professionally – even
C&S: Buffalo public schools have a reputation for being politically fraught and a sometimes difficult place, for a number of reasons, to instill change. What makes you confident that you will be able to succeed in that environment? JS: I was a little reticent given the climate in Buffalo, politically and educationally. I didn’t want to come and be stifled, have the parameters in which we were working be so tight. With Superintendent Kriner Cash (formerly the superintendent of Memphis schools) coming on board and having heard from a colleague of mine at the Early Middle College Consortium who was a guru of the early middle college schools that were opened in Memphis, she had let me and some of the other people in Buffalo affiliated with the Early Middle College Consortium know that this is a guy that, as long as it’s producing results that are positive for kids, he’ll support innovation. C&S: The Buffalo and New York City school districts differ in many ways, particularly in mayoral control in New York City, which gives more room for innovation and change. Do you see any issues with the Internationals model translating to the much smaller and more tightly controlled Buffalo district? JS: I think a common misconception around the Internationals model or any dynamic curricular or school redesign model is that it comes in kind of a three-ring binder. The Internationals model is not cookie cutter. I think the reason that it is innovative is because everywhere that it’s implemented, it’s implemented differently, depending on the population.
The NYC Food Policy for Breakfast Seminar Series NYC Greenmarket Turns 40: What’s in Store for the Next 40 years Date:
March 23rd, 8:45am-10:15am
Speakers:
Michael Hurwitz, Director, Greenmarket Zaid Kurdieh, Norwich Meadows Farm (Farmer) Lynn Loflin, Lenox Hill Neighborhood House (Buyer) Peter Hoffman, Back Forty West ( Chef ) Lorrie Clevenger – Rise & Root Farm (Farmer)
Location:
Hunter College Silberman Building - 2180 Third Avenue, Main Auditorium
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