New York City Health and Hospitals Corporation

Verification and Monitoring of Affiliation Contracts

The New York City Health and Hospitals Corporation (HHC) oversees the operations of New York City's municipal hospitals. These municipal hospitals are affiliated with local medical schools and their teaching hospitals through affiliation contracts. In the mid-1990s, HHC began to implement performance-based affiliation contracts, in which the affiliated hospitals are to be paid on the basis of their performance in certain specified areas. We examined HHC's administration of these performance-based contracts. We found that improvements are needed if the intended benefits of this type of contract (lower costs and better services) are to be fully realized. For example, we identified delays in implementing performance-based contracts at some hospitals. We also found that the performance of the affiliated hospitals could be better documented and more closely monitored. We further found that the affiliated hospitals did not always meet their performance goals. We make several recommendations for improving HHC's administration of its performance-based affiliation contracts.

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