Look closely at a questionable Empire State health-care policy, and you’re liable to find the fingerprints of the Greater New York Hospital Association, the hospital and health-system trade group that is one of the most influential forces in New York politics.

A case in point is the state Health Department’s directive, issued on March 25, that compelled nursing homes to accept patients who had tested positive for coronavirus. It turns out, as the Journal reported, that this ill-conceived policy was the brainchild of the nonprofit hospital association, which pitched it to Gov. Andrew Cuomo’s office shortly before it went into effect. In the name of easing a crisis for the association’s members, the Cuomo administration contributed to a disaster for vulnerable nursing-home residents, who died by the thousands.

This fatal misstep grew out of a remarkably tight political alliance between the governor and the trade group that has become increasingly bad for the state’s health. Its recent history began before Mr. Cuomo’s last election when, in March 2018, he browbeat the state’s Catholic bishops into giving up $2 billion in proceeds from the sale of a church-affiliated nonprofit health plan. The money went into a “Health Care Transformation Fund” to be spent at the governor’s discretion in an election year.

That summer the hospital group poured more than $1 million into Mr. Cuomo’s re-election campaign, which was a lot even for one of Albany’s deepest pockets. Much of the funding flowed through a loophole that would keep it secret until after his inauguration. Just before Election Day, with no advance notice, Mr. Cuomo dipped into his health-care slush fund to finance an increase in the fees paid to hospitals and nursing homes for taking care of Medicaid patients, a top lobbying priority of the hospital association.

Cuomo administration officials described it as an “across the board” boost for all facilities. But an internal Health Department analysis, obtained by the Empire Center, made clear that the rate increase was tailored to help hospital association members settle their newly negotiated contract with the health-care workers union 1199SEIU, another Cuomo ally.

By early 2019, unknown to the public, New York’s Medicaid spending was running well over its ample budget. Rather than working with the Legislature to close the gap—which might have required cutting payments to hospitals—Mr. Cuomo papered things over by secretly delaying $1.7 billion in Medicaid payments into the next fiscal year. Although the delay threw the state’s new budget out of balance, the Cuomo administration didn’t disclose what happened until weeks later, by which time the maneuver had spawned a $4 billion deficit.

Mr. Cuomo put off truly confronting the mess until early 2020, when he delegated it to a Medicaid Redesign Team of state officials and industry representatives. To lead that panel, he turned to Northwell Health CEO Michael Dowling, a member of the hospital association’s board. The other co-chairman was former 1199 chief Dennis Rivera.

Those deliberations were happening when the pandemic hit. Soon, the hospital association was pushing for help in discharging patients to nursing homes, and the Health Department quickly obliged the governor’s major donors and go-to health-care mavens.

The hospital association also successfully lobbied for a last-minute budget provision to limit sharply the ability of coronavirus victims to file malpractice suits against hospitals, nursing homes and other providers—relieving the industry of a potential hit to its finances. There’s a case to be made for liability protections in a crisis, but sending patients to nursing homes was clearly a wrong move. It wasn’t the sole cause of Covid-19’s spread in New York nursing homes, but it made a bad situation worse—as Mr. Cuomo and his aides would have understood had they sought a broader range of advice.

In August, the Greater New York Hospital Association repaid Mr. Cuomo’s favors by featuring him in TV ads touting the state’s success in controlling the pandemic and assuring the worried public that hospitals are safe to use again. New Yorkers can only wonder what their governor will do for them next.

© 2020 Wall Street Journal

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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The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.