State University of New York

Staff Study: SUNY Hospitals and the Competitive Managed Care Environment

The State Universities at Brooklyn, Stony Brook and Syracuse operate hospitals as part of their academic health science centers. As managed health care is provided to more and more people, hospitals of all kinds are under pressure to lower their costs so that they can effectively compete for the patients served by managed care plans. We considered the factors affecting a hospital's ability to compete for managed care patients and the extent to which these factors can be exploited by the three SUNY hospitals. We conclude that, because the SUNY hospitals are subject to laws and regulations that do not apply to other hospitals in New York State, they are unable to compete on an equal footing with the other hospitals. For example, the SUNY hospitals cannot make investments to raise revenue and cannot establish capital reserves. We encouraged SUNY officials to continue to seek legislation that would give the three hospitals additional operating flexibility. Subsequent to our study, such legislation was passed.

For a complete copy of Report 97-D-2 click here.