Exorbitant hospital prices have NYC Council member poised to clamp down
New York Daily News, The (NY)
The high price of hospital care is in the crosshairs of several new bills City Councilwoman Julie Menin plans to introduce in the coming days — including legislation that would hit hospitals with stiff financial penalties if they don’t provide the city with pricing data that’s now nearly impossible for the public to access.
The bill package, which seeks to create an office of hospital accountability, aims to better understand and address skyrocketing hospital costs in the city.
Menin told the Daily News she expects to introduce the bills to the Council as soon as they’re drafted — most likely within the next two weeks — and described the issue as one “that impacts every single New Yorker.”
“Patients are left with little to no knowledge about how much they’re going to be charged for procedures that they desperately need,” Menin told the Daily News. “This package of bills that I’ve been working on aims to create a transparent information portal, basically an office of accountability, that would inform New Yorkers how much hospitals are charging for various procedures.”
Menin, who served under former Mayor Bill de Blasio as commissioner for consumer protection and now represents the Upper East Side, said hospitals that fail to provide the city with key data could be penalized by the city withholding funding and other benefits to them. Traditional fines would be unlikely under the bills due to state regulations that preclude the city from taking such action.
The push for transparency has serious political backing as well.
Several unions — including SEIU 32BJ, DC 37 and the United Federation of Teachers — support passing the bills into law, as does the Realty Advisory Board on Labor Relations, which represents many of the city’s landlords.
Henry Garrido, executive director of DC 37, said the recent increases in hospital prices are all about maximizing revenue and “have nothing to do with quality of care.”
“They’re listed as nonprofits, but they don’t act as nonprofits,” he said. “They’re tax-exempt. They get all these benefits from the city, and yet there’s no accountability.”
Last week, that coalition launched a multimillion-dollar ad campaign showcasing the issue. Menin’s legislative push also comes as the city is trying to rein in the health care costs it pays out for retired municipal workers. That controversial plan, which was first floated by de Blasio, is now in the hands of the City Council. Mayor Adams has requested an amendment to push a revamped, less costly plan forward.
Data compiled by the Rand Corp. and 32BJ, which represents about 150,000 building service workers, found that health insurance providers through unions and private employers are being charged by private hospitals in the city, on average, 300% more than Medicare for the same services. The data also revealed that hospital costs are rising at a much higher rate than inflation.
As a result, unions and employers who pay for worker insurance plans — and the workers covered by them — are struggling to keep up with the rising costs. According to data gathered by the 32BJ Health Fund, the disparity between what the unions and city are paying compared with what Medicare pays translates into lower wages for workers and higher costs for government.
An internal report by 32BJ published in March estimated that if health care costs increased at the rate of inflation over the past decade, an additional $5,000 in annual wages would have been available for each of its members.
“By paying hospital prices above Medicare’s rates, New York City may be overpaying by as much as $2.4 billion,” the report states. “At the same time, private hospitals receive hundreds of millions in property tax exemptions from the city.”
The Greater New York Hospital Association, which represents nearly 300 hospitals and medical facilities in the region, did not immediately respond to messages.
Manny Pastreich, 32BJ’s secretary treasurer, said that the data in its report is available to the union because of the contract it has with its health insurance provider.
That data show not only a discrepancy when it comes to what Medicare pays, but also when comparing what one hospital in the city charges to its competitors’ prices.
For example, based on the billing data, a C-section costs on average more than $55,000 at Montefiore Medical Center, $45,000 at New York-Presbyterian Hospital, $30,000 at Mount Sinai and nearly $18,000 within the city-run Health + Hospitals network.
Pastreich said Menin’s push is the “first step to addressing the overcharging issue.”
“You cannot have health care affordability without hospital accountability,” he said. “We saw that we could save hundreds of millions of dollars if we could bring down the cost to something reasonable. ... For the city, that’s billions of dollars. So ultimately getting this information allows us to say, ‘OK, here’s the hospitals that are overcharging and by how much. Here’s the average cost, and then sort of see if we can drive to some sort of reasonable place in the middle.”