SUNY Downstate is still in debt after serving as a ‘COVID-only’ hospital during the pandemic

SUNY Downstate Health Sciences University is one of the largest employers in Brooklyn and one of New York City’s flagship public health centers. The institution functions as both hospital and academic medical center. But in the wake of the COVID-19 pandemic, the university faces a series of fiscal challenges. Early in the pandemic, then-Gov. Andrew Cuomo declared that SUNY Downstate would only focus on COVID-19 cases. This required the hospital to transfer all other patients to other facilities, close clinics and cancel elective and emergency surgeries.

The COVID-19 designation lasted for just nine months, but the institution’s finances suffered. It is now staring at a $160 million deficit, which it said is hampering its ability to continue offering health services. The university recently stopped funding five health clinics in Brooklyn public schools – a decision that led to public outcry.

City & State spoke with Dr. Wayne Riley, who was appointed as the president of SUNY Downstate in January 2017, about the challenges that the institution faces and its importance to New York City.

You have been handling a lot over the past two years with the public health crisis. Could you describe how SUNY Downstate has weathered the COVID-19 pandemic?

We performed superbly during COVID, even in an environment where we have more constrained resources than other hospitals and health systems. The problem is the COVID-only designation created this perception in the minds of our patient base here in Central Brooklyn that we were, and still are, COVID only.

So needless to say, because the designation of being COVID only was in some respects, quote-unquote, an unfunded mandate, we find ourselves in a little bit of a fiscal rut. So we’ve been working with state leadership, SUNY leadership, the SUNY board, the Department of Health and the governor’s office to ameliorate the financial challenges that were brought on principally by that almost nine-month period where we were, officially COVID only.

So we’re working hard to tell people, “Hey, come back and get your primary care visits, come back and get your screening. Come back to deliver your babies and have your surgery and get your medications and manage your diabetes, your hypertension, your pulmonary disease.” All the things that we know are contributing to health care disparities here in Central Brooklyn.

What are the resources you’re looking to use to help with the deficit? This would be increased budget appropriations from the governor? Would it take the Legislature to approve more money? Would it be the governor allocating existing stimulus money?

Well, you just highlighted all the above. The governor has visited us three times when she was lieutenant governor. (She) reached out to us and applauded what we were doing. So yes, it’ll be an all-the-above approach that will help us weather this turbulent period. We’ve been working very closely with the Brooklyn delegation.

(State Sen.) Zellnor Myrie has been particularly supportive of our efforts. Our new state Assembly member, Brian Cunningham, has visited us. I visit with the Brooklyn delegation at least twice during the legislative session and have periodic contact with all of them. They are aware. They understand the constraints.

But they also understand that this institution is a crown jewel to serve New York state, both at the education of health care (at the) professional level and then for the clinical care we provide here in Central Brooklyn.

Did the Brooklyn delegation share if they feel this money is going to be forthcoming? Are there difficulties or pushback?

No pushback per se, but it has to run its gantlet of the state process, if you will. We did receive an additional $25 million from the Department of Health in early June. That was very helpful. There were indications that given our situation that more would be forthcoming. So again I work in good faith with our state leadership, both at the SUNY level and at the Executive Chamber level.

So are they fighting for a specific bill or would this be through a budget measure?

Right in the immediate term, budget measures between here and January. Then once the Legislature is back in session, there were some legislative approaches that all three SUNY hospitals – Downstate University is one of three state hospitals in the state of New York (and) you have Stony Brook (University Hospital) and then you have Upstate (Medical University Hospital) – we all have made a pitch to members of the Assembly to get additional support for SUNY hospitals to provide benefit relief, to provide more funding for Medicaid payment rates.

So these are active discussions that were going on with the legislative leadership, with SUNY central, the SUNY chancellor, SUNY board, as a collective. It’s not just about Downstate. But whatever we can do to better support all three SUNY hospitals will obviously work out to the benefit of our university hospital.

And, in particular, I think we do have a special sort of justification to get additional support because of the COVID-only designation that we responded to.

In terms of the collective, is it looking for a sustainable fiscal solution moving forward?

SUNY is 64 campuses, of which SUNY Downstate is one. But right now the SUNY system, the campuses, all their benefit costs for their faculty and staff are covered (in the state budget). Whereas the benefit costs for the employees, the nurses and respiratory therapists for the three hospitals are currently not covered in the state budget.

So we’ve been agitating. All three institutions have been respectfully and assertively requesting that providing similar benefit relief will really strongly shore up the balance sheet of all three hospitals, particularly Downstate.

The other thing is the Legislature did grant some level of debt service relief. We very much appreciate it. We need more.

Keeping up in infrastructure and health care is very expensive. Whether it’s buying a new CT scanner – we had to buy the newest, most up to date, machines to run PCR tests. Those machines cost anywhere from, I think $1.5 million to $1.6 million. We were able to get two of those at the height of the pandemic after much effort.

So hospitals always need upgrades and infrastructure improvements. We need to renovate our operating rooms. Our hospital was built by Nelson Rockefeller in 1963. And so it’s a little bit long in the tooth capital infrastructure. And so again, that’s the other thing that we’ve been sharing with the governmental leadership. And I was pleased that the governor included in her final budget a study of whether it is feasible for us, as the state of New York, to build a women and children’s hospital here at Downstate. I think that would be great for the citizens of Brooklyn.

I lived in Houston, Texas, where I did my training. Houston is probably 2.4 million people. They have three children’s hospitals in Houston, Texas. Brooklyn is 2.7 million people and we lack critical pediatric capacity. Brooklyn families would benefit by having a full-service, full-fledged children’s hospital as part of our campus that could serve all families of Brooklyn.

 If you’re a working family and your child needs pediatric care, and for some reason it’s complex pediatric care, unfortunately they have to go to Manhattan. Sometimes that can be very difficult for families. So if they had an option for world-class, high-quality pediatric services, both at the inpatient and outpatient level here in Brooklyn, I think that would be very, very helpful and attractive to Brooklyn families.

You might have seen Chalkbeat New York had an article looking at your five Brooklyn school clinic closures. There were comments from city officials who said they were “disappointed”. And then there were comments from medical professionals who staff those clinics that were being closed, and they were accusing SUNY Downstate of mismanagement. What was your response to these city officials’ disappointment?

It was a tough decision. But again, with a $160 million deficit visited upon us because of our COVID work, we had to make tough decisions. And my job as a leader is to make tough decisions.

As much as I really enjoyed and was proud of the fact that we provided support for the school-based clinics, because of our fiscal situation, we had to make that tough decision to exit the school-based clinic. If we can one day get to a better fiscal situation, we will be happy to revisit that.

But we’re under state mandate by the Division of Budget, because of our $160 million fiscal situation, to pare back certain programs if they’re not core to our daily work as an acute care general teaching hospital. So in the mitigation plan that we provided to the state to try to chip away at the $160 million, it did include the rescission for the funding that we provide through personnel to the school-based clinics.

Members of the Assembly got briefed by me last spring about this fiscal situation. So this is not new news. I didn’t know then that I would have to cut school-based clinics, but I clearly indicated to the elected officials that in the absence of support, we would have to make some tough, rational service decisions to stabilize operations here.

So again, this is a tough decision. We understand people are concerned. We’re working with the New York City Board of Education to help them to backfill with DOE personnel. We will help in the vetting of providers who could replace us. So we’re being very cooperative as much as possible to try to make sure that, even though we’re no longer there, somebody is there who can provide some level of service for these school-based clinics.

What is the biggest misconception then about SUNY Downstate, both in the public’s mind and in the mind of lawmakers?

I think the biggest misperception is that we’re just a hospital. We’re more than a hospital. We have 4,000 employees, 2,000 students. We’re in the top 10 of all Brooklyn employers. When you roll up all of our economic impact, we have a $1.1 billion economic impact in New York City and to Brooklyn. We are a major contributor to the health sciences and health professions nationally. The medical school is the 16th largest medical school in the country out of 150-plus medical schools.

And that was part of why I, shortly after I got here, began discussions with the then-chancellor and the SUNY board that we needed to change our name – that we needed to change our official name to SUNY Downstate Health Sciences University because of that misperception that we’re just a hospital.

We have the largest medical school among our five colleges, the largest medical school in all of New York City, probably in New York state. Sixty-five percent of the doctors we graduate every year choose to remain in New York or New York state for their residency program, residency training. We are a major contributor to the health care workforce of New York state, New York City. We have bachelor’s degrees all the way to doctorates. But I think that was part of my vision for this institution to get the perception out that we’re more than just a hospital.