New York announces funds for hospitals to be closed or merged

Oct 2 2007

The 23 hospitals and seven nursing homes in New York state that will be closed or merged with other facilities will receive more than $360 million to pay for legal costs associated with the closures and to pay debts, state health officials said, the New York Times reports (Kershaw, New York Times, 9/29).

The New York state Commission on Health Care Facilities in the 21st Century in November 2006 recommended nine hospital closures and the reconfiguration of 48 additional hospitals in the state, which it estimated would increase revenue at hospitals that remain open by $720 million per year and save Medicare, Medicaid and other insurers $800 million annually.

The commission's chair, Stephen Berger, said that hospital reconfigurations could have a greater impact on the health care system than the nine hospital closures, including proposals to redesign hospitals through mergers, downsizing and eliminating some services while adding others. The recommendations would reduce the number of hospital beds in the state by at least 4,200, or 7%. In addition, the plan would close or downsize several nursing homes, reducing the number of beds by 3,000, or 2.6% of the state's total (Kaiser Daily Health Policy Report, 11/30/06).

The state will distribute an additional $190 million in federal and state funds to the facilities, but details about which hospitals will receive the additional funds have not been released. More money is expected to be allocated over the next year to help other facilities add services and restructure to compensate for the losses at shuttered hospitals (New York Times, 9/29).