NY’s swelling Medicaid rolls are helping bankrupt Brooklyn’s biggest hospital
Life, death, newborns entering the world, a CEO raking in millions, politicians calling for an investigation: all part of the drama swirling around Maimonides Medical Center, which lost a staggering $145 million last year.
It’s Brooklyn’s largest hospital, and newly released financials show it barely has the cash to make it through another year.
The Maimonides calamity could be seen as a soap opera, if so many patients weren’t affected. Worse, the same basic story is being repeated at hospitals everywhere that treat the poor.
Safety-net hospitals are bleeding red ink because Medicaid, the government health-insurance program, shortchanges hospitals, paying them only 67 cents for every dollar of care.
Most hospitals shift the 33% in unmet costs to the privately insured patient down the hall. But at safety-net hospitals like Maimonides, fewer than one in five patients has commercial insurance. These hospitals have nowhere to shift their unmet costs. They lose money year after year. It’s also happening at Atlanta Medical Center, closing in November.
Admittedly, the problem is more severe in New York state because politicians have lavishly expanded Medicaid eligibility, buying votes and boasting they’re solving the problem of the uninsured. More than one out of every four New Yorkers, not just the indigent, is on Medicaid.
In July, a group called “Save Maimonides” began organizing community meetings and recruiting politicians to push for investigations and a new board and CEO. Mendy Reiner, the group’s cochair, claims the hospital is “rife with serious problems.”
The hospital’s defenders claim it’s a “smear campaign,” possibly by a nursing-home magnate, Eliezer Scheiner, who some allege would like to control the hospital board.
It’s been reported that two people associated with Scheiner’s company, TL Management LLC, contributed $8,000 to New York state Sen. Kevin Parker. Parker subsequently sent a letter to the state Health Department demanding an investigation of Maimonides.
Political intrigue aside, the bigger questions are: Does this hospital deliver good care? Who’s to blame for its losses? Should it be kept open?
CEO Kenneth Gibbs earned a $1.8 million salary in 2019 and saw his compensation double to $3.2 million in 2020 thanks to a one-time vesting of his retirement plan.
Multimillion-dollar salaries are common for hospital executives in New York. Still, it looks vulgar. Maimonides depends almost entirely on taxpayer dollars, and few taxpayers pull in million-dollar salaries.
What do patients say? Maimonides gets one star out of five for patient satisfaction on Medicare’s grading system. The hospital earns two stars overall, based on infection rates, survival rates and outcomes. It’s rated highly for heart care.
Two stars is nothing to brag about, but Brooklyn residents could do worse. Coney Island Hospital, SUNY Downstate, Brooklyn’s New York Community Hospital and Brooklyn Hospital Center earn only one star.
Should these low performers be closed? Maimonides’ occupancy rate varies between 81% and 86%, meaning it could handle more patients if lower-performing hospitals in the area were shuttered, saving taxpayers money.
But closing hospitals is similar to closing fire stations: It ignites community opposition. Hospitals provide jobs. In New York, hospitals employ more people than Wall Street.
Before COVID, the state used a bipartisan commission to close or shrink financially troubled hospitals. That allowed politicians to evade blame. But during COVID, hospitals ran out of beds. Now closing hospitals is a taboo topic, even in areas where there are too many beds.
What can be done to save Maimonides? Politicians are calling for investigations. But the answer is already clear: slash the state’s inflated Medicaid enrollment, reserving the program for the truly needy, and use the savings to pay safety-net hospitals the actual cost of the care they provide. No enterprise can stay afloat receiving 67 cents on the dollar. New York has started providing supplemental funding but not enough.
Finally, cut Gibbs’ salary or hand him walking papers. Why should Gibbs be on the gravy train when the hospital is losing tens of millions of our taxpayer dollars a year?
Betsy McCaughey is a former lieutenant governor of New York.