We May Never Recover from State Budget

By Anne Kauffman Nolon, CEO of Hudson River Healthcare | April 1, 2020

COVID-19 is creating a perfect storm for all segments of our health system. Hospitals rightly receive most of the attention from government as they are the front line now treating COVID-19 positive patients. They need and deserve support in this unprecedented crisis. But the pandemic response has created enormous strain on community health centers as well, like the 43 that I run as CEO of Hudson River Healthcare. Now, the State is poised to pass a budget that would take tens of millions of dollars away from CHCs even as we fight this pandemic. If this budget passes unchanged, CHCs may never recover.

Community health centers in New York provide primary care services across 800 sites to 2.3 million people a year in communities that do not have adequate access to healthcare. Across the HRHCare network, we serve over 225,000 patients in every borough of New York City, Long Island, and the Hudson Valley. We provide preventive care, primary care services, and an array of pediatric and pre-natal services, as well specialized chronic care management services and supports for some of the most vulnerable New Yorkers.

In normal times, we are the backbone of the healthcare safety net, ensuring that New Yorkers receive the medical, dental, mental health and community based services they need to help them manage their chronic illness. In the pandemic response, we are a critical component of the health system’s efforts to flatten the curve of new cases. To echo our support of our Governor’s acknowledgment, we act as a “pressure valve” for hospitals and other providers.

CHCs are administering thousands of COVID-19 tests daily, and even more importantly, are keeping patients out of overburdened hospitals and emergency rooms if they don’t need to be there. We do this by treating patients who present symptoms of COVID-19 ourselves, only referring them to hospital settings if necessary. We also treat people with chronic diseases or non-coronavirus conditions directly in our clinics or in their homes via tele-health. Our heroic staff are fighting on the front lines of this pandemic every day and we owe them gratitude as we do all health workers.

But as CHCs mount this fight, our budgets are hemorrhaging. Our financial models were built on expectations of revenue from programs and services that are no longer permitted or advisable in the pandemic. My CHC colleagues and I have been persisting by using cash reserves, lines of credit or any other available funds to keep going. While the Federal government provided some assistance, it was not nearly enough.

Unfortunately, now the State budget could put CHCs in a position where we won’t be able to financially sustain ourselves. The problem is one of the Medicaid Redesign Team’s proposals would transform how the State handles a Federal program called 304B. That program offers community health centers and other similar providers rebates on prescription drugs. These rebates translate into millions of dollars in revenue every year for community health centers – money that we then reinvest into providing care to our patients.

The proposal in question would change the way this program is administered so the State collects the rebates instead of the CHCs and other providers. The State would keep some of the funds but would be forced to give a portion back to the Federal government. Providers like community health centers would get nothing.

Hudson River Healthcare alone would lose up to $10 million a year if this proposal passes. This would devastate our clinics and our patients. Under normal circumstances, this would force us to lay off staff, cut programs and take other draconian measures. But with a pandemic underway, there is no telling what the future holds.

The impact across the system would be even more stark with some CHCs going out of business entirely. But it’s the 2.4 million New Yorkers who rely on CHCs for primary care who will suffer the most – and this is the worst time imaginable for this to be happening. Having been a CEO for over 40 years, I have never seen a situation as dire as this one.

The threat this proposal poses to community health centers is not nearly worth the relatively small savings the State will reap if it passes. Now is not the time to destabilize a critical sector of New York’s healthcare safety net and weaken our health system overall. CHCs are playing a key role in the coronavirus response, and when the dust finally settles, millions of New Yorkers will need all the services we provide to be in place so their access to healthcare is secure. We ask the State to reject this proposal entirely and make sure community health centers continue caring for the most underserved New Yorkers at a time when they need it most.

Anne Kauffman Nolon is the CEO of Hudson River Healthcare – the largest network of community health centers in New York State with clinics in NYC, Long Island and the Hudson Valley. HRH serves 225k people a year. Anne has been CEO for 40 years.