May 15, 2020
Now, my dear namesake, these innocent and well-meaning people, your countrymen, have caused you to be born under conditions not very far removed from those described for us by Charles Dickens in the London of more than a hundred years ago.
James Baldwin, The Fire Next Time
The USNS Comfort set off from Norfolk, Virginia accompanied by the trappings of war: a band, speeches, salutes. Trump, of course, is fond of the martial aesthetic and he took the opportunity to turn the launch into a campaign rally.
"This great ship behind me is a 70,000-ton message of hope and solidarity to the incredible people of New York," the president said, unable to resist adding: “a city I know well.”
But Trump’s New York was not the ship’s destination. While the Comfort has been deployed in wartime, its more recent ports of call have been countries like Jamaica, Peru, Ecuador, Colombia, El Salvador, Nicaragua, Guatemala, Costa Rica, and Haiti. In March, once again, the great white ship’s mission was charity, not war.
If it struck TV viewers as odd that New York, home of Wall Street billionaires, Russian gangsters, and, let’s not forget, shiny Citibank bikes -- in other words, a city fairly bursting with wealth -- could be so dramatically low on hospital beds, that question was likely to be forgotten in the press of events.
Now that question is back, with a vengeance. Whistleblower Rick Bright, former head of the country’s Biomedical Advanced Research and Development Authority — or BARDA — testified before Congress Thursday, offering an unsurprising tale of warnings ignored by the Trump administration. This time, the wages of deliberate ignorance were tens of thousands of preventable deaths.
“It didn’t have to be this way,” said Rep. John Sarbanes (D-MD), adding that administration stonewalling was “not harmless malpractice because there is every reason to believe that if that input had been heeded, particularly your pleas for action in the early days of the pandemic, it might have saved thousands of lives."
Much as it’s satisfying to blame the Trump administration for mishandling virtually every aspect of the pandemic, the problem goes back further than 2016. In late March, as COVID-19 infections reached what he called “astronomical proportions,” New York governor Andrew Cuomo warned that New York City had 53,000 hospital beds, just over one-third of the 140,000 it was projected to need.
Cuomo warned that New York was “the canary in the coal mine” for COVID-19 infections spreading throughout the nation. That wasn’t the only warning, if we were prepared to listen. New York’s crisis revealed how decades of letting the profit motive remake American health care had left the country unprepared to save the lives of its citizens in an emergency.
Like the pandemic itself, it didn’t have to be this way.
The story starts with the famous headline “Ford to City: Drop Dead.” It was 1975. New York City was in a budget crisis and called on the feds for help. President Gerald Ford denied the city a bailout.
A group of New York power brokers pulled out all the stops, including playing hardball with Albert Shanker, the abrasive head of the New York teacher's union who had shut down the city's school system with bitter strikes in 1967 and 1968. (Back when Woody Allen was still funny, in the 1973 science-fiction comedy Sleeper Allen’s character wakes up two hundred years in the future to learn that civilization was destroyed when “a man by the name of Albert Shanker got hold of a nuclear warhead.”)
Threatened with mass layoffs, Shanker found himself outmaneuvered. He loaned the city money from the union pension fund. The immediate crisis was averted, but the city needed to solve the larger problem.
Ironically, the city’s mayor, Abe Beame, the last of the old Tammany Hall political machine mayors, was an accountant. Yet he hadn’t been able to get a grip on the city’s spending. The state temporarily froze Medicaid payments to hospitals. The city responded by aggressively cutting services: clinics closed, public services like policing dropped, and infection rates soared.
New York's crisis in the Seventies had long-range effects. In a 2006 article in the American Journal of Public Health, the writers noted that “the budget and policy decisions designed to alleviate this fiscal crisis contributed to the subsequent epidemics of tuberculosis, human immunodeficiency virus (HIV) infection, and homicide in New York City.”
Even then, the problem was larger than New York; health care costs were rising nationwide. But New York is, as Andrew Cuomo warned, in a cliched yet timely metaphor, the canary in the coal mine. That's not only true for the spread of COVID-19; it's equally true for the pandemic's economic toll, which exacerbated the state's existing budget problems.
If everything is bigger in Texas, everything in New York is more expensive--including health care. In the 1980s, despite cost-control efforts, Medicaid, the federal insurance program for low-income Americans, the disabled, and the elderly, became the largest chunk of the state's budget.
Then, as now, the federal government pays half of states’ Medicaid costs; states are left to devise how to pay the other half. In New York, the state was supposed to pay a quarter of Medicaid costs while towns and cities made up the other 25 percent. Eventually the state had to step in by capping costs for local municipalities that couldn’t keep up.
By 1983, that wasn’t enough. New York City was on the verge of dropping dead again. The same story: hospitals were struggling and Medicaid costs were rising.
Governor Mario Cuomo, the three-term governor known for taking on inequality in his “Tale of Two Cities” speech at the 1984 Democratic convention, and now, best-known as the father of the fraternal comedy duo of Andrew and Chris, took on the fraught issue of health care reform. Cuomo appointed a panel that created a system that contained costs, supported financially stressed hospitals, and financed care for the uninsured. True to Cuomo’s liberal philosophy, the New York Prospective Hospital Reimbursement Methodology (or NYPHRM) was a great leveler, allowing New York State to set reimbursement rates for hospitals.
The system was complicated, but basically it worked: no one hospital got too rich, none got too poor. But as the Reagan revolution took hold, the big academic hospitals wanted to negotiate their own rates with insurers. In 1994, George Pataki, a tall, bland, Republican with an aw-shucks grin, was elected governor on a pro-business, anti-government platform.
Pataki, the former mayor of Peekskill, upended the system.
Backed by Pataki, the 1996 Health Care Reform Act (HCRA) allowed hospitals to negotiate their own reimbursement rates from insurance companies. The free market was unleashed, and since this was New York state, corruption wasn't a bug; it was a feature. The old hospital reimbursement methodology had included funds for graduate medical education and to help hospitals cover bad debt and charity care. In the 1996 bill, lawmakers included a tax to cover these costs.
The tax raked in billions every year: $5.5 billion in 2015 alone. Nobody knows where all the money went; at least nobody willing to speak publicly. “Lawmakers could dip into the pot to pay for anything they wanted," wrote Laura Nahmias in Politico.
A 2011 report by the Commission on the Public's Health System found "little or no relationship between the actual dollars received by the hospitals from the hospital Charity Care Pool and the amount of health care services they provided to the uninsured."
“Almost none of the spending from HCRA went through typical oversight and procurement reviews,” wrote Nahmias. “And for roughly five years, from 2000 to 2005, there is no official record of how all of the money was spent.”
Apart from the corruption it unleashed, Pataki’s “reform” was the first major blow to New York’s hospital system, enhancing opportunities for hospitals serving the wealthy and well-insured. Over the next few years, technology deepened the divide. By 2004, changes in surgery and medical treatments had drastically reduced hospital stays. Hospitals built to keep patients between one and two weeks and a month, depending on the surgery, were half-empty.
Health care analysts estimates of the state’s oversupply of hospital beds varied wildly, from 4,000 to 20,000 beds. In 2005, Pataki organized the Commission on Healthcare Facilities in the 21st Century. Chaired by an investment banker, Stephen Berger, the commission was tasked with modernizing New York’s health care system.
The commission recommended closing 9 hospitals; 48 additional hospitals were slated to be merged or downsized. That was only the beginning. Over the last 20 years, 41 New York State hospitals shut down inpatient services. The 12 largest systems now control 70 percent of inpatient beds and by 2018 four “mega-systems” in New York City had accumulated a combined total of $14.2 billion in net assets.
Shutting down hospitals made sense, but the way it was done disproportionately affected low-income communities and people of color. Hospitals in New York’s outer boroughs relied on Medicaid funds and weren’t as profitable as the hospitals benefiting from private insurance, and they were more likely to find themselves on the block.
As these trends swept across the country, a new term grew up: hospital deserts.
As bad as things got in New York City over the last few months, rural America was hit hardest by the bottom-line mentality in medical care. Since 2005, 170 rural hospitals have closed, and the trend hasn’t abated. A recent study by the University of North Carolina showed that 673 more are “vulnerable or at risk of closure.”
Health problems, already prevalent among the poor, are exacerbated when nearby hospitals and clinics shut their doors. In one study of rural California, mortality rates had risen by 5.9 percent after hospital closures, while mortality rates remained stable in urban areas.
Rural hospital closures had been concentrated in the South, including Texas, and the Upper Midwest. Many of these states refused Medicaid expansion under the Affordable Care Act. For red state governors, the decision was economic as well as political. Medicaid costs were rising under the ACA, and state budgets were tight.
As a result, when COVID-19 reached the United States, the rural and urban poor were the most vulnerable. In early April, the Atlantic magazine reported that one in 10 COVID-19 deaths in the United States from COVID-19 were in Louisiana, Mississippi, Alabama, and Georgia. The magazine’s COVID tracking project found that, in the American South, middle-aged and working age adults are at much greater risk than their counterparts elsewhere; for some reason, “they are more likely to die from COVID-19,” the article noted.
For some reason? Like the urban poor, the rural poor are more likely to have lung disease, heart disease, diabetes, and obesity. And hypertension, which some studies are linking to vulnerability to the virus. If you count Oklahoma, the South accounts for all top 10 states in hypertension diagnoses. Cancer mortality rates are also higher in Southern states.
Without lapsing into stereotypes, poverty and ethnicity are related, statistically. There’s no question that COVID-19 has disproportionately affected people of color. Asthma, more common among African-Americans and Puerto Ricans, poses a significant risk of complications with COVID-19. Poverty is also correlated with asthma; 10.8% of people who are poor have asthma compared with 6.5% of the rest of the population.
Similar statistics show correlations with diabetes, another risk factor for coronavirus mortality. In Detroit, where seventy-nine per cent of the population is black and thirty-six percent below the poverty line, the diabetes rate is roughly twice the national average.
The numbers are coming in from all over the country, and they are damning. In Southeastern Michigan, an epicenter of the outbreak, African-Americans are 14 percent of the state’s population but represent 41 percent of COVID-19 victims. In Louisiana, African-Americans make up roughly 32 per cent of the state’s population, but account for 70 percent of coronavirus deaths.
Now that states are re-opening, these numbers are likely to be starker: in New York, 75 percent of front-line workers are people of color. Poor people and people of color who are not in the middle class have less access to hospitals and clinics, and partly as a result, they have more underlying medical conditions that make them vulnerable to the pandemic.
If New York is the canary in the coal mine, to risk belaboring Cuomo’s words, the way New York deals with the pandemic may turn out to be a preview for the rest of the country, as well, especially as states and localities struggle to keep up with the pandemic’s crushing economic effects.
Once Andrew Cuomo became New York's governor, he must have wished, sometimes, that he was living in his father's era, when it was easier to forge consensus on caring for America's sick.
After he was elected in 2010, Cuomo assembled the first of two Medicaid Redesign Teams, trying to get health care spending under control. Two years later, at the recommendation of the panel, Cuomo enacted a two percent across-the-board cut in Medicaid reimbursements. Those cuts fell heaviest on hospitals serving the underinsured and uninsured.
“The cuts didn’t hurt the big guys,” said Judy Wessler, a longtime healthcare advocate in New York City and founder of the Commission on the Public’s Health System. “It hurt the smaller hospitals, the safety-net hospitals that were already struggling to survive.”
Even as the pandemic raged, Cuomo pushed through a state budget that included $2.5 billion in Medicaid cuts. Cognitive dissonance ensued. Was this the hero of the pandemic? Or was Andrew Cuomo a heartless bully willing to sacrifice the poor?
The reality is that Cuomo was facing a $6 billion budget shortfall even before the pandemic, mainly because of rising Medicaid costs. Medicaid had been growing at one point by about 13 percent each year, and now costs the state $70 billion annually; the state’s entire 2020 budget is $177 billion.
By April, with the Trump administration and congressional Republicans blocking emergency aid to states and localities, the state’s budget gap was estimated at $13.3 billion. With New York's Medicaid program among the most generous in the country, paying relatives an hourly wage to care for elderly and subsidizing psychotherapy, it was an obvious target for spending cuts.
With the recent--and historic--Democratic majority in the state legislature, Cuomo has been able to do miraculous things: he legalized gay marriage, raised the state’s minimum wage, and banned both plastic bags and fracking. What he has not done is raised a 3 percent cap on property taxes, the one thing, other than cuts to Medicaid, that might have balanced New York’s budget. New York’s taxes are already among the nation’s highest, and upstate residents are among the nation’s poorest. If he hadn’t held the line, Cuomo might have had a full-scale Republican rebellion on his hands.
“Everybody thinks Cuomo is this hard-charging, hard-hitting kind of guy,” said a longtime health care consultant. “He’s combative, but he’s actually quite adept at appeasing different interest groups.”
That's no easy task in New York. North of Rhinebeck, the last redoubt of city refugees, “Repeal the SAFE Act” lawn signs mark the territory of National Rifle Association folks who are still irate over Cuomo’s assault weapons ban passed in 2013. In upstate New York, voters love to hate Cuomo almost as much as they love to hate Hillary Clinton.
Cuomo, whose federal experience includes a stint as Secretary of Housing and Urban Development during the Clinton administration, has used his TV appearances as a bully pulpit, reminding his audience—especially his audience of one in the White House—that only the federal government can “print money,” in other words, do the kind of borrowing that’s needed to prevent states from facing bankruptcy.
So far, neither Congress nor the administration has stepped up, not unlike the administration's failure to play the role expected in the pandemic generally. In the $2.2 trillion stimulus package enacted in March, Congress allocated $150 billion for states, with restrictions imposed by the Treasury Department wall it off from being used for anything other than coronavirus-related expenses. That means no help for states staggering from huge revenue losses resulting from the lockdown.
Trump, as usual, was clear about his motives: “because all the states that need help — they’re run by Democrats in every case,” he told The New York Post.
Chastened by criticism from progressives and the regulatory reality, Cuomo has delayed Medicaid cuts for six months: New York risked losing Medicaid funding if benefits were cut. The upshot is that Cuomo will exert greater control over the state’s medical budget.
That might not be a bad thing. As the pandemic raged, Cuomo’s team imposed a new model of cooperation among hospitals that could set the tone for future reforms. As Elmhurst Hospital in Queens was besieged by hundreds of Covid-19 patients, one medical resident described the scene as apocalyptic. Thousands of beds were free in other New York hospitals, some no more than 20 minutes from Elmhurst, according to state records cited by The New York Times. The city, which runs Elmhurst, had a fleet of 26 ambulances available to transfer patients.
Cuomo's team created a live daily map of hospital conditions. When a hospital was filling up, scouts would identify people who could be moved. “Then state officials coaxed or helped hospital staff to transfer them to less-crowded facilities,” the Times reported.
Cuomo’s hands-on style of crisis management could become a template for easing disparities in the health care system, not just in a crisis, but after the country recovers from the pandemic. Still, the real drivers of New York’s crisis, and the country’s, are health care decisions made at the national level.
From 1975, when a doctor treating Jackie Onassis or a Bronx welfare recipient got paid the same, to the resource-starved conditions in inner city and rural hospitals in 2020, there has been an historic shift that reached an apotheosis with the election of Donald Trump.
In the pandemic, we have seen the results of electing a businessman as president—leaving aside the debate about whether Trump really is a businessman or merely a trustafarian who played one on TV. Everything is business now, including life and death.
Both are starker in New York. In a 2017 study of how New York City residents live and die, an investigation found that a white man living in Battery Park City in Manhattan lived on average 10 years longer than a black man living in Brownsville in central Brooklyn.
New Yorkers know the score. In 2011, a team of researchers from SUNY Downstate reported that nearly 35 percent of Brooklyn residents with private insurance opted to go into Manhattan for their health care needs. In other words, Brooklynites wanted to get their health care in Donald Trump’s New York. Who could blame them?
The disparity couldn’t be more vivid than in New York’s 14th Congressional District, represented by Alexandria Ocasio-Cortez. In the district’s working-class immigrant neighborhoods in the Bronx and Queens, The New York Times reported that there were 19,200 coronavirus cases as of April 30, more than all of Manhattan, despite having almost a million fewer people.
Reporter Mark Leibovitch noted what he called an “eerie” coincidence: two of these neighborhoods are named Corona and North Corona, and these neighborhoods have had more coronavirus cases than any ZIP code in the country. For Ocasio-Cortez, the pandemic is personal, Liebovitch wrote, noting that she knows many of the neighborhood folks lost to the virus.
"They include Lorena Borjas, a 59-year-old transgender immigrant activist in Queens and Mohammed Gias Uddin, a 64-year-old Bangladeshi community leader who ran A&A Double Discount in the Bronx. Ms. Ocasio-Cortez knew both of them, as well as others she called 'strong anchors' in the community.
“'Just this morning, we were just talking to our landlord here who had just lost his brother,' she said. 'Both of his children are hospital workers.' She speaks all the time to people who cannot afford food, rent and burials. The catastrophe is woven tightly into her day-to-day fabric.
“'This crisis is not really creating new problems,” Ocasio-Cortez told the Times. “It’s pouring gasoline on existing ones.'”
Ruth Ford is a long-time investigative reporter. She has written for many publications, including the Washington Post, Village Voice, Daily Beast, and the NY Observer. She lives in Rhinebeck, NY, with her sons and husband.