By MIKE LEE
On June 8, the New York City Council voted to approve the Healthcare Accountability & Consumer Protection Act. The law establishes the Office of Healthcare Accountability (OHA), which has the authority to oversee hospitals’ actions in pricing health care procedures at their institutions and to end the opaque practice of how citywide hospital systems do their business.
The passage of the bill makes New York City the first municipality in the United States to establish an agency to oversee hospital pricing with authority and develop a grading system for each hospital’s transparency in revealing their health care costs.
“New Yorkers shouldn’t have to struggle to understand the costs of health care services or go into debt to the lack of transparency,” said New York City Council Member Julie Menin, who introduced the legislation. “The HACP Act will help protect patients from inconsistent hospital pricing and level the playing field for consumers in the health care industry.”
“Inflated rates by some private hospitals are one of the biggest threats to the foundation of our health care system,” said DC 37 Executive Director Henry Garrido at a City Hall rally announcing the bill on Feb. 23. “Fulfilling this basic need has become unaffordable due to certain hospital systems charging 300% above Medicare rates for the same quality procedures one would find at a less expensive hospital. We applaud Council Member Menin and her colleagues for their hard work in holding hospitals accountable.”
Once established, the Office of Health Care Accountability will be responsible for collecting data, monitoring hospital pricing trends and issuing a report annually focusing on the variations among local hospital systems and prices charged to the City of New York for municipal workers’ health care.
The latter is critical for District Council 37, who, along with several other New York City unions, formed the Coalition for Affordable Hospitals to combat exorbitant charges for medical procedures and related costs.
The pricing by the city’s top five for-profit hospitals — New York Presbyterian, Northwell Health, Montefiore Medical Center, Mount Sinai Health System, and NYU Langone — has put financial pressure on union health and security funds.
In 2000, health insurance for New York City workers cost $1.6 billion, including families’ and retirees’ coverage. However, by 2017, costs went up to $6.3 billion. This year, health insurance for City workers exploded to an estimated $11 billion. Hospital charges account for nearly 40% of all health care-related costs.
A report by the 32BJ Health Fund discovered that if New York City’s pricing and spending patterns in health care matched the rest of the state, the City could be overpaying these five private hospital systems by as much as $2 billion annually.
The agency’s annual report will go to the State Attorney General, Mayor, and the City Council Speaker and will include breakdowns of major insurance providers, profit margins, employee counts, expenses, and executive salaries and bonuses.
“Creating this agency allows the City to leverage its purchasing power to create a better health care system,” Menin said. “This will slow the excessive spending that has spiraled to more than 10% of the City’s annual budget.”
The City Council unanimously approved the Healthcare Accountability & Consumer Protection Act on June 8.