The SUNY-owned hospital in Brooklyn facing a newly announced downsizing plan has seen its patient volume and revenue plunge over the past decade, according to a review of its financial reports.

Inpatient discharges at University Hospital at Downstate dropped 72 percent from 2012 to 2022, and income dropped 46 percent, the reports show (see charts).

 

The hospital, commonly known as SUNY Downstate, lost money in eight of the past 11 years, and its net assets sank to a new low of minus $330 million in 2022.

These trends help to explain why SUNY Chancellor John King recently announced plans to merge the hospital's inpatient operations into New York City-owned Kings County Hospital, which neighbors SUNY Downstate, and renovate the SUNY facility as a center for outpatient care.

 

Critics of the proposal fear it would amount to a de facto shutdown, but Governor Hochul's office said her plan is to "revitalize Downstate – not close it."

The hospital's financial reports indicate that its recent troubles have been driven by a decline in customer demand. Its annual volume of inpatient cases – the major source of revenue for most hospitals – dropped from more than 30,000 in 2012 to fewer than 10,000 since 2019. 

More than half of its patients are enrolled in the state-run Medicaid health plan for the low-income and disabled, which typically pays lower fees than commercial insurance.

However, SUNY Downstate reported that its Medicaid revenue exceeded its costs of care in five of the last six years – likely because it received supplemental grants on top of its reimbursement for care provided. Its accumulated Medicaid surplus from 2017 to 2022 was $143 million.

Another contributing factor to SUNY's decline might have been its ill-fated 2011 takeover of nearby Long Island College Hospital. The deal engineered by former Governor David Paterson rescued LICH from the brink of closure but saddled SUNY Downstate with hundreds of millions of dollars in debt. SUNY officials decided the takeover was a mistake and sold off the LICH facility to developers in 2014.

About the Author

Bill Hammond

As the Empire Center’s senior fellow for health policy, Bill Hammond tracks fast-moving developments in New York’s massive health care industry, with a focus on how decisions made in Albany and Washington affect the well-being of patients, providers, taxpayers and the state’s economy.

Read more by Bill Hammond

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