ALBANY — Hospitals across the upstate region experienced a sharp drop in revenue this year and any cuts to New York's Medicaid program would be potentially devastating, the head of a health care trade group said Monday.

A snapshot of the finances of 35 upstate hospitals found they experienced a collective $438 million decline in net patient revenue — the sum they receive for all patient care — in the first seven months of 2020 compared to the same period last year, according to Gary Fitzgerald, president of the Iroquois Healthcare Association.

"2020 is going to be a devastating year for hospitals' finances, and if you come in with cuts in 2021 it is just going to add to their problems," Fitzgerald told CNHI.

The hospitals were required to cancel elective procedures after the coronavirus pandemic began spreading throughout the state in March, as the Cuomo administration projected a surge in emergency admissions due to the contagion.

The upstate hospitals then laid off some 6,000 employees and lost significant revenue, as performing elective surgeries generates money for them.

Fitzgerald said members of his team are in strategy sessions with state Department of Health officials.

The upstate hospitals have implemented numerous safeguard measures aimed at curbing the spread, including increasing cleanings and disinfecting interiors of buildings and having access to additional room capacity should there be another surge in admissions driven by the infection, he said.

The financial concerns are getting significant attention now because the Cuomo administration has begun to prepare the governor's annual budget proposal for January.

With the state facing a projected deficit of $8 billion, Medicaid, the health care program serving millions of low-income New Yorkers, could be a tempting target in the effort to shave state spending.

"There is no question that this is going to be a painful budget year especially for health care and schools, the two biggest pieces of the state budget," said William Hammond, health care policy analyst for the Empire Center for Public Policy. "It is going to be very hard for the state to come close to balancing its budget. Even with a lot of federal aid and even with some kind of a tax increase, there is still going to be a gap to close."

The upstate region is served by 86 hospitals. According to Iroquois, Medicaid payments for care provided for both inpatient and outpatient services accounts for 16.1% of total patient revenues.

"A number of our hospitals were really in trouble even before the pandemic," Fitzgerald said.

He said the upstate hospitals, after being required to add to their capacity earlier this year, are prepared if infections across the region continue to increase, as they have been now for several weeks.

The latest upstate coronavirus data released Monday showed 1,968 people are getting hospital treatment for the contagion, the highest total since June 10 and an increase of 123 from one day earlier. Of the current hospital patients, a total of 391 are in intensive care units.

“This is not an upstate or downstate issue — all New Yorkers, regardless of where they live, have cause for concern," Gov. Andrew Cuomo said.

Though state officials have employed a variety of strategies to address the risk of the coronavirus spreading at correctional facilities, the latest state data shows authorities are dealing with more than 40 inmates who have tested positive at Wyoming Correctional Facility, a medium security prison near maximum security Attica prison.

Statewide, since the pandemic reached New York in March, a total of 563,690 people have tested positive for the virus in New York.

The coronavirus has now claimed the lives of 26,159 people in New York, including 25 new deaths reported Monday.

Joe Mahoney covers the New York Statehouse for CNHI’s newspapers and websites. Reach him at jmahoney@cnhi.com

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