Scores of members from DC 37 AFSCME and SEIU 32BJ, two of the city’s largest unions, attended a packed City Council hearing Dec 12 where leaders and representatives testified about runaway charges in NYC’s largest private hospitals.

The unions presented testimony on the effects of skyrocketing costs for health care and asked the City Council to take action to curb practices by hospitals and health care providers that unreasonably ratchet up costs for needed care.

“The single factor that’s had the most profound, negative impact on healthcare coverage in NYC is the cost of in- and out-patient care provided by the City’s non-profit, private hospitals,” said District Council 37 Executive Director Henry Garrido.

“DC 37 and our brother and sister unions that make up the Municipal Labor Committee are doing our part to reduce hospital bills with changes in the design of our health plans. But the private hospital systems are not doing their part to contain costs.”

Garrido noted that under the current, incomprehensible system:

• A hip replacement procedure can cost $83,000 at one hospital and $56,000 at another.
• Hospitals that serve Medicare and Medicaid patients receive lower prices in the private market, while hospitals that serve insured patients have higher prices.
• On average, higher-priced hospitals in the NY metro area are 2.5 times higher than the lowest-priced hospitals.

“Adding insult to injury is the fact that hospital executive compensation has soared along with the cost of care,” he continued. “In 2018, the top 10 highest paid hospital CEOs received combined salaries, perks and other compensation totaling more than $53 million. At the same time, the city and state also offer the hospitals hundreds of millions of dollars in tax breaks.”

Several non-profit hospitals in the city allow some of their providers to charge well beyond the norm of what is reimbursed. For example, 32BJ’s Health Fund, which provides health care for 200,000 people who are members of the union or in their families, paid some out-of-network providers at Northwell hospitals – almost 60 times what was paid to in-network providers in other comparable hospitals.

“32BJ fights hard to ensure our members have access to high quality, affordable health care. Hospital systems that give privileges to out-of-network providers to deliver standard services are simply making it harder for costs to be contained and for working people to access the kind of care they deserve,” 32BJ SEIU Secretary-Treasurer Larry Engelstein testified. “Managing health care costs is therefore crucial to ensuring we can continue to win family-sustaining jobs for workers in New York City.”

Garrido made four recommendations to change the status quo:

• Conduct an investigation into these private hospitals with high cost services that decline to treat uninsured and under insured, low-income and immigrant populations.
• The City, along with the State, must re-evaluate its property tax exemptions to private hospital systems that are not willing to treat populations that can least afford their services.
• Create a stakeholder group that includes labor unions, health care advocates, consumers, healthcare institutions and insurance providers to discuss the cost and quality of health care.
• The City Council should monitor all hospitals (private and public) and health plans to measure disparities in pricing and care.

“The health care we have in our contract makes a huge difference in my life. It covers my two sons, and does not require any premium payments to come out of my paycheck,” said 32BJ member Luchiana Owens. “It is important though that health care costs do not rise too fast. If health care costs are out of control, there is less room for wage increases, pension payments, training and other benefits members like me rely on to support our families and improve our lives.”