NYC Health + Hospitals Struggles With Temporary Staffing Costs

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A new report released on May 4, 2023, by State Comptroller Thomas P. DiNapoli found the COVID-19 pandemic exacerbated pre-existing staffing pressures, particularly a shortage of staff nurses, in NYC Health + Hospitals (H+H) facilities, leading to an increased reliance on temporary nurses and higher staffing costs.

Between February 2020 and September 2022, temporary staffing at H+H grew by 83% to offset the loss of staff nurses while managing demand for its services. It resulted in unexpected costs of $125 million in Fiscal Year (FY) 2023, which the State Comptroller’s office anticipates will remain elevated through at least FY 2024.

“For many NYC residents, NYC Health + Hospitals is a lifeline to quality health care, but it is a public health system struggling to get fully back on its feet after the stress of the pandemic,” DiNapoli said. “Hospitals and their staff were pushed to the brink during the pandemic. H+H lost hundreds of nurses, forcing them to hire temporary staff to manage demand due to the pandemic and its fallout, which increased salary costs and created training and other challenges.”

This report is an update to DiNapoli’s 2021 report, NYC Health + Hospitals Check-Up: The Impact of COVID-19. DiNapoli’s office routinely examines the finances and issues impacting the fiscal health of H+H.

The number of registered nurses (RNs) and licensed practical nurses at H+H facilities declined by 6% and 31%, respectively, from February 2020 to September 2022. As the pandemic persisted, RN staffing levels in H+H facilities declined at a greater rate than they did in the city overall and statewide. RN employment also declined in New York City and the rest of the state between 2019 and 2022 by 1.1% and 5.3%, respectively. Currently, H+H’s vacancy rate for nurses is 15%.

Hiring temporary staff to deal with the pandemic and its fallout on hospital staff is driving up hospital costs across New York City, including at H+H. It is estimated that in New York, contract labor costs across health care systems and hospitals have increased by more than 110% of pre-pandemic levels, with average temporary nurse salaries increasing from about $1,800 per week pre-pandemic to about $3,300 per week in March 2022.

New York City has historically provided financial support to H+H. It funds the non-federal share of supplemental Medicaid payments, among other costs, since H+H provides care to a large share of the city’s uninsured and Medicaid patients.

The city recently announced a new collective bargaining agreement with District Council 37 (DC 37) that it assumes will set a wage pattern for other unions, including for employees at H+H. A review of the city’s recently released budget update suggests collective bargaining costs at H+H are assumed to be fully annualized at $680 million, with nurses to make up about 29% of the total.

Related Reports 

NYC Health + Hospitals: Nurse Staffing Trends, May 2023

Issues Facing New York City's Agencies: New York City Health + Hospitals, February 2022

NYC Health + Hospitals Check-Up: The Impact of COVID-19, September 2021

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Track state and local government spending at Open Book New York. Under State Comptroller DiNapoli’s open data initiative, search millions of state and local government financial records, track state contracts, and find commonly requested data.

Arbitrating disputes involving health insurance benefits for retired employees

Citing Granite Rock Co. v. Int'l Bhd. of Teamsters, 561 U.S. 287, the U.S. Circuit Court of Appeals, Second Circuit noted "It is well settled in both commercial and labor cases that whether parties have agreed to submit a particular dispute to arbitration is typically an issue for judicial determination" and "a court may order arbitration of a particular dispute only where the court is satisfied that the parties agreed to arbitrate that dispute." Further, said the court, "ordinary principles of contract law guide the inquiry into whether an arbitration agreement was validly formed and whether the parties consented to arbitrate a particular dispute."

That said, the Circuit Court opined that this case required it to decide whether "the grievance-and-arbitration provision of the parties' collective bargaining agreement" covers a dispute concerning the medical insurance benefits that, according to Local Union 97, International Brotherhood of Electrical Workers, AFL-CIO [Union], the Union and the employer, Niagara Mohawk Power Corporation, agreed to provide to certain retired employees, former members of the Union.

The Circuit Court concluded that the Union bargained both for health insurance benefits for retired employees and for a grievance procedure that included, where necessary, access to arbitration. Expressing no view regarding the merits of the Union's grievance as "that is a question for the arbitrator," the Circuit Court held that "it is clear that the parties intended to arbitrate this dispute" and affirmed the judgment of the federal district court granting the Union's motion to compel arbitration.

Click HERE to access the decision of the U.S. Circuit Court of Appeals, Second Circuit.

 

 

Employer's rejecting hearing officer's recommendation to approve employee's GML §207-c application for benefits held arbitrary and capricious under the circumstances

A Correction Officer [Plaintiff] discovered three laundry bags in the middle of a hallway on the housing unit floor. Believing the bags blocking the hallway was a safety concern to persons walking the hallway, Plaintiff attempted to move the bags close to the wall and  sustained a shoulder injury while attempting to move one of the bags. Plaintiff's Employer [Respondent] contended Plaintiff's injury did not occur as a result of the performance of duties and rejected Plaintiff's application for General Municipal Law §207-c disability benefits. Pursuant to a memorandum of agreement between, among others, Plaintiff's union and the Respondent, a hearing was held on the issue whether Petitioner's injury occurred as the result of the performance of duties.

The Hearing Officer found that the laundry bags in the hallway posed a safety hazard and that Plaintiff had a duty to remedy the situation immediately. Although the Hearing Officer recommended that Plaintiff receive GML §207-c disability benefits, Respondent issued a final determination rejecting the Hearing Officer's recommendation and denied Plaintiff's application for §207-c disability benefits. Plaintiff then commenced the instant proceeding before the Appellate Division. *

The Appellate Division explained that its review of this administrative determination was limited, and subject to the following considerations:

1. Was the determination affected by an error of law or was it arbitrary and capricious or an abuse of discretion and a determination "is arbitrary and capricious when it is taken without sound basis in reason or regard to the facts".

Passing these tests:

2. An agency's determination is entitled to great deference; and

3. A court must sustain the determination even if the court concludes that it would have reached a different result than the one reached by the agency." 

However, in this instance the Appellate Division, citing Matter of Casselman v Village of Lowville, 2 AD3d 1281, concluded that [Petitioner] established "... a direct causal relationship and thus demonstrated ... entitlement to benefits under General Municipal Law §207-c",

Accordingly, the Appellate Division held that the Respondent's decision to deny Plaintiff's application for §207-c benefits was arbitrary and capricious and unanimously annulled the Respondent's decision "on the law without costs" and granted Plaintiff's petition.

* The Appellate Division, citing Erie County Sheriff's Police Benevolent Assn., Inc., 159 AD3d at 1561-1562, consider the merits of Plaintiff's petition notwithstanding the fact the decision at issue was not made as a result of a hearing held, and at which evidence was taken pursuant to direction by law "in the interest of judicial economy."

Click HERE to access the Appellate Division's decision posted on the Internet.