The city Health Department is advancing a new office dedicated to hospital price transparency that could save the city more than $2 billion a year, but budget constraints have led to lags in hiring and getting the office up and running.
The Office of Healthcare Accountability, tasked with analyzing municipal health care spending and publicly posting costs of procedures at local hospitals, was approved with fanfare due to widespread frustrations around the exorbitant hospital costs and medical debt. The City Council voted unanimously to pass a bill establishing the office last June and Mayor Eric Adams signed the legislation within the month, stating that New Yorkers “shouldn’t have to break the bank” to get the medical care they need.
The office was required to be set up by mid-February under a city law. Although the Health Department has started setting up the office and has dedicated some employees, it’s far from being fully staffed, said Councilwoman Julie Menin, who sponsored legislation establishing the office.
The Health Department says it is in the midst of hiring two new staffers for the Office of Healthcare Accountability, which will join five individuals who were already employed by the Health Department and have taken on some work related to the office, Menin said. But it’s unclear when those staffers will be brought on and there are currently no public job postings for the positions.
Patrick Gallahue, a Health Department spokesman, said that the agency is still analyzing how many staff will be needed long-term.
The mayor’s plan to reduce city spending in November included a $39 million cut to the Department of Health and Mental Hygiene – a measure that would eliminate 36 positions in the remainder of fiscal year 2024 and 2025, according to budget documents. But the city secured funding for the new positions through the Fund for Public Health, a Bloomberg-era philanthropic organization that supports city Health Department projects, Menin said.
Menin said that the Office of Healthcare Accountability needs to be “much more robustly staffed” to reach its goals, aiming for a team of 15 people to analyze hospital cost data and advise policymakers on how to reduce spending.
Gallahue did not respond to questions from Crain’s about how many total staff the agency plans to hire for the Office of Healthcare Accountability, nor when it expects to bring on the two new staffers that will be fully dedicated to the agency.
But Gallahue said “there has been no delay” in setting up the office and “work is underway” to increase transparency of hospital prices.
There are barriers other than staffing to getting the office up and running. The Health Department is working to secure data to gather information on hospital pricing, in part because New York state does not have a fully functional database on health claims and utilization across different insurers, according to an official with the 32BJ Health Fund, which has been active in helping setting up the office.
The Council estimated that the Office of Healthcare Accountability would cost $1.5 million annually, which would likely cover staff. But pursuing contracts with companies that collect data on hospital prices, which are needed to fill the gaps in New York’s system, could cost much more, the official said.
Menin said she is pressing the city to move swiftly on hiring and securing data to fully launch the Office of Healthcare Accountability so it can achieve its ultimate goal: lowering health costs.
New York City spends $11 billion annually on health care for municipal workers and retirees, which accounts for roughly 10% of the budget, Menin said. These costs have doubled in the past five years, she added.
Exorbitant spending on health care is in part because of the large price discrepancies between different health systems. According to a report published by 32BJ in 2022, Montefiore charges roughly $55,000 for a C-section, while New York City Health + Hospitals charges around $18,000.
“There’s simply no other service that you procure where you don’t know the price of the service until after the fact,” Menin told Crain’s. Better yet, exorbitant medical bills come at one of the most vulnerable times in a person’s life – when they are coming home from a hospital visit.
Aside from its duties to post hospital prices, the Office of Healthcare Accountability is also supposed to advise city leaders including the mayor, lawmakers and pension trustees on health care spending. It can also make recommendations to state health officials about stabilizing safety-net hospitals.
The city is aiming to launch a health care navigation tool publishing hospital prices this fall, and hopes to release its first report on hospital prices by early 2025, the official from 32BJ SEIU said.
Amanda D'Ambrosio , 2024-04-04 11:33:05
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