The Fiscal Crisis of New York City Voluntary Hospitals

The cost of providing health care has been rising at an accelerated pace in recent years and hospital care took the largest share of this increase. Although not officially associated with the government, the voluntary health care institution reflects some of the characteristics of a governmental unit. It is traditionally exempt from taxes (although this is recently showing signs of erosion) and derives increasing proportions of its revenues from public funds. These funds are payment for services rendered to indigents at rates far below their costs. Hospitals have resorted to cutting costs other ways attempting to maximize efficiency of their resources, including offering expanded ambulatory care as alternatives to inpatient care. Still, effective ambulatory care requires adequate funding. Strong economic pressures have been placed on urban hospitals by the expansion of demand in the city. While much of these deficits have been offset by philanthropy, contributions are diminishing. The crux of the financial problem is represented by the portion of the patients not covered by third party intermediaries who turn to the voluntary hospitals for ambulatory care services. Legislation has been enacted and New York is working hard to ameliorate this problem but much more needs to be done