Also this version of a 1995 NYT view of Giuliani's Fiscal Plan...The unions must have been screaming here....Giuliani Fiscal Plan Puts Health Care Jobs at Risk
query.nytimes.com
By THOMAS J. LUECK
Published: February 18, 1995
By calling for huge cuts in Medicaid and social service programs, Mayor Rudolph W. Giuliani's plan to reduce city spending by $1.3 billion is likely to lead to the loss of tens of thousands of jobs in the health care industry, the segment of the New York City economy that has been the strongest source of job growth for more than a decade.
In an interview, David R. Rubenstein, assistant director of the Mayor's Office of Management and Budget, estimated that Medicaid cuts alone would lead to job reductions of 10,000 to 30,000 at hospitals, nursing homes, mental health clinics and other medical centers, and remove $1 billion a year in wages.
Since 295,000 people now work in New York City health care jobs, the loss could trim up to 10 percent of the industry's work force. But since health care has been adding about 10,000 jobs a year, Mr. Rubenstein said, the Medicaid cuts might mean a temporary halt in the industry's growth.
Still, the proposed Medicaid cuts would be combined with a sharp reduction in direct city spending in the Department of Social Services, which contracts out foster care and other services to hundreds of private organizations, which themselves employ thousands of workers. Under the Giuliani plan, its budget would be reduced by over $100 million beginning in the fiscal year that begins next July.
In announcing his financial blueprint, Mr. Giuliani said it would lead to a more vibrant economy -- and ultimately job growth -- as banks, advertising firms and other businesses gain confidence in the city's fiscal stability and expand. Hospitals, clinics and social service agencies, he and his advisers said, will be expected to do more with less government support.
"Health care needs may grow, but we can't supply them in the same expensive way," Mr. Rubenstein said. "The Mayor is saying that the choice is not there to continually tax to raise spending."
But the plan has provoked vehement opposition from union leaders and hospital executives, who say it will decimate an industry whose growth is vital to the economy as well as the social fabric of the nation's largest city.
"It's going to be catastrophic," said Dennis Rivera, president of Chapter 1199 of the National Health and Human Services Employees Union, which has 117,000 members in New York state. He estimated that the Mayor's proposal, combined with a plan by Gov. George E. Pataki for even deeper Medicaid cuts, would lead to 100,000 health care job cuts in the state, 80,000 of them in New York City.
If the Governor's budget is adopted and all the elements of Mr. Giuliani's proposals are accepted, the city's health care industry could lose an estimated $5.4 billion. The city's Health and Hospitals Corporation, which operates 11 public hospitals, would stand to lose more than $1 billion of its $3.4 billion budget.
Experts say it is impossible to predict how the burden of caring for poor people would be shifted, particularly at a time when AIDS, widespread drug abuse and an aging population continue to create demands for medical care and social services. Although many health care and social service workers say there are ways to improve efficiency, they maintain that the Mayor's plan would cut deep into the bone.
"This could almost force us to close up the shop," said Humberto L. Martinez, a psychiatrist and director of the South Bronx Mental Health Council, which provides counseling to over 1,600 patients a year suffering from drug addiction, alcoholism or mental illness. The proposed cutbacks would be a double blow to his organization, since 90 percent of its patients receive Medicaid reimbursements that would be cut, and it has several contracts with the city's Department of Mental Health, which would lose 4 percent of its $91.3 budget under the Mayor's plan.
Economists say the spillover of job loss in health care and social services is difficult to predict. At City Hall, Mr. Rubenstein said the ripples would be "minimal" compared to cutbacks in other, higher wage industries, where lost jobs mean deep reductions in consumer spending and income taxes.
Still, many experts say medical care and social services have a special role in New York City, because hospitals, mental health clinics and social service centers provide outposts of economic activity in poor neighborhoods.
And wherever they are situated, health and social service centers have provided entry-level employment to thousands of New Yorkers, replacing the garment makers and other manufacturers who had traditionally served as the point of entry into the city's workforce.
"The sad irony is that many of our employees are now going to go on Medicaid and welfare themselves," said Thomas O'Brien, executive director of the Family Care Services of Brooklyn and Queens, which employs 1,800 home care workers who aid sick and elderly Medicaid recipients in their homes.
Many experts outside City Hall applaud the effort to hold down Medicaid costs, saying that health care and social service organizations have grown inefficient, in part because of the relative largess of Medicaid subsidies to New York patients. They maintain that the cuts proposed by the Mayor and the Governor reflect the national campaign to contain medical costs.
"At a time when most of the economy is being forced to become more efficient, these not-for-profit medical and social service folks will have to do the same thing," said Emmanuel Tobier, a professor of economics and planning at New York University. Health and social service industries "should have prepared for radical changes, but they didn't," he added.
As Mayor Giuliani has said repeatedly since announcing his plan for Medicaid cuts, the average reimbursement of patients in the state is higher than in any other state.
Still, whatever the potential long-term benefits of his cuts, there is little dispute over the potential short-term impact on jobs.
"The Mayor is saying that one of the major engines of growth of the last decade is about to konk out," said Samuel M. Ehrenhalt, the New York Regional Commissioner of the Bureau of Labor Statistics.
He said New York City health care employment had grown by 102,500 since 1980, to 295,300 at the end of last year. The most rapid growth has been since 1988, when overall employment in the city has sunk by 30,000 jobs, and when health care jobs grew by just over 50,000.
Social services, although a smaller sector of the city economy, has grown more rapidly. Since 1980, the number of social service jobs has soared to 148,000 from 66,000, according to Federal figures.
Mayor Giuliani's advisers offer little hope that other industries will pick up the slack. Indeed, in announcing his cuts, the Mayor released a grim economic analysis that concluded that job growth in the city would be far less vigorous than elsewhere in the country.
As a result, even as the mayor predicts that his spending cuts will revitalize the economy, his financial plan forecasts that job growth in the city will not exceed 1 percent a year in each of the next four years, a pace less than half that of the nation.
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