New York’s safety-net hospitals were the front lines of the coronavirus. Now they’re facing ruin.

New York hospital | Mary Altaffer/AP Photo

NEW YORK — The New York City hospitals that serve the city’s poorest patients are facing financial ruin after being on the front lines in the U.S. fight against the coronavirus.

Between the outbreak pushing already thin budgets to the brink and Gov. Andrew Cuomo’s impending Medicaid cuts, the heads of so-called safety-net hospitals say even with federal support, they may not last long after the pandemic subsides, and that will mean a dearth of medical care for the city’s most vulnerable population.

“With Covid-19, we are all in the same storm. We are not all in the same boat,” said David Williams, a Harvard University professor and social scientist focused on social influences of health. “Some boats have holes that leak, and some boats are more vulnerable.”

The state’s 29 non-profit safety-net hospitals are primarily located in low-income neighborhoods and treat a disproportionate number of minorities, regardless of a patient’s ability to pay for care. And, since patients often have scant or no insurance, they take in lower reimbursements for services than hospitals serving more patients with employer-sponsored health care.

Hospitals big and small, rich and poor, are reporting declines of around 90 percent in non-Covid-related procedures and surgeries as they continue to discharge coronavirus patients. Safety-net hospitals like The Brooklyn Hospital Center and St. Barnabas in the Bronx have maximum capacities of 464 beds and 441 beds, respectively, and have just begun resuming delayed procedures that have become increasingly urgent. The loss of revenue over the last few months will be impossible to make up, hospital administrators said.

Unlike the city’s public hospitals, they can’t rely on City Hall to bail them out. And unlike wealthier hospitals, mostly located in Manhattan, they don’t have generous lines of credit from which to draw in the lean times.

Now, those systems that relied on bringing in revenue from other procedures like elective surgeries are waiting on the federal government to make a little more than $100 billion available, though it’s unclear how much of that money will be allocated to hospitals, if any.

“We’re going to need close to $100 million between now and the next three or four months,” Gary Terrinoni, president and CEO of The Brooklyn Hospital Center, said in an interview.

Should the Brooklyn facility close its doors, the ripple effects could be catastrophic.

Beryl Miles, a 70-year-old Bedford–Stuyvesant resident, said she and her family have relied on The Brooklyn Hospital Center for decades.

“It would be a real hardship,” she said in an interview. “If they took away Brooklyn Hospital, it will be another big-ass apartment [building] down on the corner of DeKalb [Avenue]. That’s what I fear.”

With other hospitals only accessible by public transit or car, she would either have to drive across the borough or hope the ambulance arrived at another facility in time.

“If you’re on the brink, you may just be gone,” she said.

Ninety hospitals across the state received the first tranche of federal dollars in early May, but the allocations favored the larger systems and treated small, independent hospitals unfairly, Terrinoni and other administrators told POLITICO. The Brooklyn facility, for example, received just $35.2 million of $12 billion in federal funds allocated to hospitals.

Federal funding formulas have long favored larger medical systems, like Northwell Health and NYU Langone, while punishing smaller facilities like The Brooklyn Hospital Center, which treats patients “deeply affected by health disparities” due to race and income.

More than 79 percent of the center’s outpatient clients are associated with Medicaid, have a combination of Medicaid and Medicare or are uninsured, according to its most recent community service plan.

„The Covid-19 pandemic has exposed the troubling reality that there are two hospital systems in New York City: one for Manhattan residents, and the other for outer-borough residents,” said Brooklyn Borough President Eric Adams. “The dire fiscal outlook faced by so many hospitals, particularly those catering to low-income areas and communities of color in Brooklyn … threaten to widen the already-yawning inequities in our healthcare system, which fall hardest on black and brown residents.”

The federal health department asked hospitals across the country to submit information to qualify for various pots of money — number of ICU beds; how many patients tested positive for Covid-19 between January and April 10; the amount of funding they received from the state for caring for the indigent; and the race and zip codes of the Covid-19 patients they treated.

But much of that data does not adequately convey a hospital’s needs, said one expert.

“The only relevant factor is race and zip codes. Zip codes are a proxy for poverty,” said Elisabeth Benjamin, vice president of health initiatives at the Community Service Society. “We know there is a problem. It’s the woefully short-changed safety-net hospitals that are bearing the burden.”

The U.S. Department of Health and Human Services declined to comment on the formula beyond sharing Secretary Alex Azar’s April 22 remarks when he promised “a significant infusion of money for high-impact areas.”

Other safety-net hospitals like St. Barnabas in the Bronx also came up short, despite receiving nearly $47 million, according to the federal data.

St. Barnabas, which treats uninsured and Medicaid patients at a rate similar to the city’s municipal hospitals, said it provided personal protective equipment to its staff and took care of patients appropriately, regardless of the cost, during the first wave of the virus that brought New York’s hospitals to their knees.

“But that may put us in a situation where we may be facing a 10 percent operating loss for 2020,” CEO and President David Perlstein said in an interview. “I can’t print money.”

He said his team has repeatedly analyzed what programs the hospital could spare to save costs, but couldn’t make the math work.

“It’s not an expense issue, it’s a revenue issue,” he said. “Every time I close a program, that’s lost revenue that I need.”

Not only are these safety net hospitals contending with a loss of services, but they’re also awaiting Cuomo’s proposed Medicaid cuts, which could reach upward of 30 percent, according to the Healthcare Association of New York State.

“Safety-net hospitals have been playing a critical role in saving lives amid the pandemic and we have been monitoring them closely so that they have the resources they need,” state Division of the Budget spokesperson Freeman Klopott said. “The reality is, though, New York State is contending with a 14 percent revenue loss. [I]n the absence of federal funding, we will have to cut spending, with a plan for specific reductions coming this month.”

As hospitals frantically look for ways to cut down costs, especially as operating revenue is down from the halt on procedures like elective surgeries, closing their doors may be imminent.

“Closures of safety net institutions, and subsequent job losses, would further exacerbate health care disparities and economic issues in communities that have been historically underserved and under resourced,” said George Gresham, president of 1199SEIU, which represents 450,000 members.

“Prior to Covid, there was still the safety net issue,” Terrinoni said. “Nothing really fundamentally is being done in New York to make the situation better, particularly for hospitals. I don’t think it’s going to be better post-Covid.”

Shannon Young contributed to this report.