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Fiscal Year 2022: Preliminary Budget Hearing

Mitchell Katz, M.D., President and Chief Executive Officer
Monday, March 22, 2021

New York City Council Fiscal Year 2022 Preliminary Budget Hearing

Good afternoon Chairperson Rivera and members of the Committee on Hospitals. I am Dr. Mitchell Katz, President and CEO of NYC Health + Hospitals (Health + Hospitals). I am joined today by John Ulberg, Health + Hospitals’ Senior Vice President and Chief Financial Officer; Patsy Yang, Senior Vice President at NYC Health + Hospitals for Correctional Health Services (CHS); and Christine Flaherty, Senior Vice President of Health + Hospital’s Office of Facilities Development.

I am happy to be here to report on our finances for Fiscal Year 2022. A year ago, COVID-19 arrived in New York City and required all of our energy and resources. Health + Hospitals invested financially, as well as clinically and emotionally, to do everything possible to thwart the virus and save lives. Even with those necessary expenditures, I am pleased to report that Health + Hospitals has closed the first half of FY21 on track and projects a strong closing cash balance of $550 million for FY21. Still, we remain deeply concerned about externalities including the proposed State budget cuts, which would cause significant harm to New York City’s public health system at precisely the wrong point in time. I look forward to partnering with you to prevent these cuts from happening, and I thank you for your ongoing commitment to a strong, viable, and equitable public health care system.


Our system has had many extraordinary accomplishments over the past year even as we have battled a global pandemic, thanks to our dedicated and heroic staff. We were the original epicenter of the pandemic and throughout the pandemic we have led the citywide effort to beat back the pandemic. This has included:

  • Healing – Our facilities and clinicians have provided quality, compassionate care to thousands of patients impacted by COVID-19. Our 11 emergency departments have managed more than 108,000 COVID-19 patient visits. Systemwide, more than 54,000 hospitalized patients with COVID-19 have been safely discharged.
  • Testing – We have prioritized testing since the early months of the first surge, initially setting up tents outside our facilities and then launching the country’s most successful Test and Trace operation. In the last year, our hospitals, Gotham Health Centers, Correctional Health Services and NYC Test & Trace Corps testing sites have done more than 3.8 million COVID-19 tests. Thousands of New Yorkers experienced for the first time the dedication and passion of the employees in our health system. I am especially proud of the resounding and consistent praise we have heard and seen on social media for our team members’ kindness and professionalism.
  • Vaccinating – We are so proud to be a significant part of the City’s vaccination efforts, focusing first on our staff and other health care workers and then, when authorized by the State, on our most vulnerable patients and community members. Despite the challenges of an unreliable vaccine supply, we have extended hours, added more staff, and created new mass vaccinations sites managed by our NYC Test & Trace Crops to bring vaccines to our patients and communities. So far, we have put vaccine into more than 260,000 arms, and we are not letting up.
  • Recovering – Our ambulatory care teams are serving more than 26,000 patients who had COVID-19, many of whom will face a range of long-term health effects. Our investment to open three new COVID-19 Centers of Excellence in communities hardest hit by the pandemic will ensure access to the specialized care New Yorkers will need to address long term respiratory, cognitive and cardiac conditions caused by the virus. At these sites, we will be with our COVID-19 patients at every step of their recovery and offer ongoing primary care to all members of the community.

Beyond our work with COVID, we have also seen great progress in other aspects of the system:

  • Increased patient attribution with our primary care providers and implemented strategies with MetroPlus to retain new members
  • Improved referral processes to maintain specialty business within the system
  • Expanded ambulatory care services including Express Care and telehealth
  • Increased MyChart enrollment to amongst the best in the nation and leveraged its capabilities to improve patient experience
  • Converted eligible patients to appropriate Medicaid plans including HIV SNP and HARP to better address their needs and improve care management
  • Established the H+H Equity and Access Council aimed at eliminating barriers, institutional and structural inequities, and improve the health and well-being of underrepresented and marginalized communities
  • Continued to integrate best practices in LGBTQ affirming care across the System
  • Completed roll-out of NYC Care to all five boroughs bringing access to primary and specialty care for 50,000 members, regardless of their ability to pay or documentation status

In addition, despite contending with the extraordinary challenges of COVID-19 in the City’s jails over the last year, our Correctional Health Services team, led by Dr. Patsy Yang, was able to achieve several important milestones in patient care. In the last year, CHS:

  • Opened four new Program to Accelerate Clinical Effectiveness (PACE) units to better serve patients with serious mental illness, leading to improved medication adherence and health outcomes and reduced violence
  • Launched an Enhanced Pre-arraignment Screening Service (EPASS) program on Staten Island to screen individuals admitted to jail for medical and behavioral health issues
  • Expanded its reentry support services to all patients, starting at intake, through its new Community Connections Services (CCS) program
  • Expanded the services of the Point of Reentry & Transition (PORT) program, which includes the PORT Practices clinics at NYC Health + Hospitals/ Bellevue Hospital and Kings County Hospital. The PORT clinics, which celebrated their one-year anniversaries in 2020, now provide telehealth visits, and the Bellevue PORT location also expanded its scope of services to include psychiatric care
  • CHS was also the first correctional facility in New York State to offer vaccine to persons in custody

Financial Performance YTD

Health + Hospitals has closed the first half of FY21 on track; we have beat our budget projections by 2%, achieving a net positive budget variance of $115 million. Our patient care receipts are $398 million better thus far this year versus the same period last year. This continues the positive momentum we had last year where patient care revenues exceeded FY19 by nearly $500 million.

Our Strategic Initiatives associated with revenue cycle improvements, managed care contracting improvements, and value-based payments also remain on track. Through December, they have generated $311 million in revenue and have a projected line of sight of $576 million for the full year. Finally, the staffing investments that we began implementing in FY19 have continued to be consistent with our overall system needs. We have brought onboard nursing and nursing support positions who have specifically supported our ability to manage the COVID surge and stabilize our ongoing services.

FY22 Preliminary Financial Plan

As of the release of the January plan, we projected a closing cash balance of $550 million in FY21 and $257 million in FY22. These cash balances, while positive, factor in many major external financial risks including State and Federal policy concerns. However, we are excited to share that one of the most notable risks, the DSH eFMAP glitch, was fixed in the recently signed American Rescue Plan by President Biden. This will enable us to offset nearly $800 million in projected losses in FY21 and FY22. We are extremely grateful to Senator Schumer and the entire New York delegation for addressing this major impact on Health + Hospitals.

Nonetheless, there remains major external uncertainty as we emerge from COVID. The Executive SFY21-22 State budget includes nearly $500 million in cuts to the system over the next two years, including the elimination of the public Indigent Care Pool and a 1% across-the-board cut, on top of the 1.5% cut implemented last year. We are advocating in Albany and with support from the Mayor’s Office and many of our critical partners and community stakeholders to eliminate these cuts. At the same time, too offset these risks, the system remains focused on implementing our Strategic Initiatives and plan to generate over $800 million in new revenue/savings in FY22, growing to nearly $1.3 billion by FY25.

Against the backdrop of all of this, we have been battling COVID every day. We have paid out over $1.6 billion to-date on the COVID response and have committed to spend nearly $2 billion on our response. In an effort to defray these costs, we have been aggressive in pursuing available federal revenue streams. We were among the first hospitals in the nation to submit a claim to FEMA which enabled us to receive some advanced reimbursement. We have continued to provide documentation and work closely with FEMA to continue to receive eligible reimbursement. Additionally, we were active in receiving Provider Relief Funds through the CARES Act. Thus far, we have received nearly $1.2 billion, largely through the safety-net and “hot spot” allocations, which would advocated strongly for given all of our efforts on the frontline and the narrow margin we manage each day.

Thank you for the opportunity to testify before you today and I look forward to taking your questions.