March 14, 2014

Alan Aviles says privatizing dialysis saves HHC $20 million annually.
Alan Aviles says privatizing dialysis saves HHC $20 million annually.

By Marc Bussanich 

New York, NY—In the second time in one month, Alan Aviles of the Health and Hospitals Corporation, went before the City Council to discuss the public hospital’s pressing financial difficulties. HHC wants to privatize dialysis services, claiming it’ll save $20 million annually. But Public Advocate Tish James is urging the Bill de Blasio administration to stop the plan because she said it would be bad for patients. Video

During his testimony to the City Council Committee on Health, chaired by Councilmember Corey Johnson, Aviles explained the hospital faces fiscal challenges on all fronts—deep cuts to Medicaid, erosion of federal and state funding, significant growth in employee pension/health insurance costs and high costs of serving a rising tide of uninsured patients.

“Our system served nearly 1.4 million patients last year and almost 500,000 of those patients had no health insurance coverage. In total, approximately 80 percent of HHC’s patients are either Medicaid or Medicaid-managed care beneficiaries or are uninsured,” said Aviles.

He told the Council that HHC must continue to implement significant restructuring cost-containment and revenue-optimization actions to close outstanding budget gaps.

“We are now projecting a $430 million gap in fiscal year 2015, and this gap grows considerably each year to nearly $1.4 billion in fiscal year 2018,” Aviles said.

He noted without increased funding from the city, state and feds, it’ll be hard to close those gaps. That’s why the hospital wants to privatize dialysis services, among some other cost-saving actions.

“We looked at [privatization] very carefully. It will save us such a significant amount of money over the course of the contract term. It [allows us] to provide quality services that are equal or better than what we had been providing [while saving] us $20 million annually,” said Aviles. “If we don’t save this $20 million through this engagement then that $20 million has to come from somewhere else.”

But James insisted that HHC, and not a private vendor, should continue to provide dialysis services.

“Based on my independent review of the data and the anecdotal evidence provided by nurses and doctors who call into question the staffing ratios and quality indicators of dialysis facilities, this administration should not only review but withdraw the application and maintain its operation under HHC,” said James  

The public advocate also questioned why, since the hospital is facing long-term deficits, has HHC left the Neponsit Health Care Center in the Rockaways, which closed in 1998, vacant and boarded up.

“It’s my understanding that HHC is paying hundreds of thousands of dollars every year to maintain that property,” James said.

James noted HHC could possibly fetch $40 million for the property, double the amount the hospital expects to save from dialysis privatization.

But in an interview Aviles said that even if the property is worth $40 million, it’s a one-shot deal.

“I don’t know where $40 million came from because there are restrictions on how that property could be developed. Whatever the number is it’s a one-time shot; dialysis [would save] us upwards to $20 million a year on an ongoing basis, so it’s kinda like apples and oranges.”

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