The new year has begun what looks like a coming decade of anxiety. Global conflict, presidential impeachment, the Iowa caucuses, and – closer to home – the beginning of an epic battle over the New York State budget.
Our behavioral health experts are free to contradict this, but I have never found much use in anxiety. From what I read, worry is more often triggered by the unknown than the real. I can’t explain the horrors of drone killings, missile attacks, or airline tragedies. Yet, I do want to discuss news of the state budget battle ahead, and how it may impact Community Healthcare Network.
To avoid burying the lede, as journalists say, let me start with the bottom line. It is going to be a bruising state budget debate, especially in health care. Organizations like CHN are likely to see financial cutbacks, but not crippling ones. And we will do what we always do: respond carefully, trim sails as needed, and maintain CHN services to our communities and our staff.
And I will be asking you for advice on how best to do that.
Here we go: New York State budgeting 1.0. First, understand that nearly every fiscal or financial year that impacts CHN is out of sync with CHN’s budget cycle. Our budget year is January 1 to December 1, known as a calendar year. How quaint!
The federal government’s fiscal year begins on October 1. New York City’s year begins on July 1. New York State, today’s focus, runs from April 1 to March 30 each year. Under the New York Constitution, the state must approve its budget on time and Governor Andrew Cuomo and the legislature have met that requirement over the past decade. Buckle up for the next three months.
This is the problem. Despite a booming economy, there is a projected $6 billion state budget deficit for the 2020-21 fiscal year. Quick reminder: that is from this
April until next March. The major reason is that the state’s Medicaid spending has grown dramatically. This is important to CHN, since the largest part of CHN’s revenue comes from Medicaid paying for the health care we deliver. There will be significant reductions in Medicaid spending in the year ahead. The question is, where does the ax fall?
The two major drivers of Medicaid cost spending growth have nothing to do with providers like CHN. First, there has been a dramatic increase in the cost of long-term care – both nursing home and home care – as the number of dependent New Yorkers grows. Second, the high cost of hospital care in New York consumes an inordinate amount of state funds.
You can see where I am going. Across the board cuts in health spending is surgery by sledgehammer, not scalpel. We need to fight to prevent that, and we are doing so in coalition with allied organizations. There is a compelling argument, supported by data, that the primary care provided by community health centers saves the Medicaid system money, mostly by keeping people healthy and avoiding unnecessary, and more expensive, health care in hospitals and their emergency rooms. We are hammering that point.
Still, it is likely that we will see cuts in our state funding. We will weather the cuts, come as they may. To the occasional frustration of all of us, CHN runs an extremely tight financial ship. We try never to be “penny wise and pound foolish,” but we do keep our belts tight, and look for ways to grow revenue and cut unneeded expenses. We are prudent stewards of CHN.
As the state budget battle unfolds, be confident that CHN stands strong. Do not worry, act. If you see ways that CHN could save funds, write to me either directly or through the Suggestion Box link on our portal. If you have a creative idea on growing revenue, please speak up. In all things at CHN, the most creative ideas come from the front-line staff. This would be a good time to share ideas that could ease us through what will be a challenging year, but should not be a year of anxiety – at least here at CHN.
Looking forward to this afternoon’s gathering at Slate. Have fun, and then enjoy a soggy spring weekend.