Hospitals across New York state are facing financial headwinds in the wake of the COVID-19 pandemic, with many reporting negative or unsustainable operating margins, delaying needed construction projects and reducing or outright eliminating services as a result of staffing shortages. 

Those were the results of a fiscal survey released Wednesday morning by the Healthcare Association of New York State, an industry group that represents hospitals statewide. The group called for government support for hospitals in order to curtail the effect the financial woes will have on access to care for patients. 

The organization's report warned that without some form of assistance many hospitals will struggle to survive.

“Three out of five hospitals are underwater, and the fourth is on thin ice. We face a very real danger of hospitals closing, patients losing care, healthcare workers losing their jobs and communities losing their lifeblood," said Bea Grause, the group's president and CEO. "The state and federal governments must immediately provide new funding, enact common sense policy changes and make no cuts to existing vital healthcare funding.”

The warning comes as public health officials in New York have braced for a challenging winter and a "tridemic" of COVID, influenza and RSV and staffed beds in hospitals are being closely monitored. 

Hospitals and health care organizations over the last several months in New York have called for more help to contend with a shortage in staff, brought on by a mix of factors including worker burnout from the pandemic and a requirement they receive the COVID vaccine. 

The financial problems facing hospitals is a nationwide problem, however, but an especially acute one for New York facilities. 

The survey released from the group found 49% of hospitals report a reduction or elimination in service as a result of staffing challenges. Nearly all hospitals have offered financial incentives meant to retain or attract workers, while 64% have sought to re-train many of their workers in order to provide higher-level care needs. 

And 47% of hospitals have asked staff to postpone elective time off. 

Staffing shortages have led to hospitals using contract workers, which are more costly. In New York alone, contract labor costs have sharply increased, more than doubling between 2019 and 2022. 

But the challenges extend beyond staff, too: 27% of hospitals surveyed told the organization they are at risk of defaulting on existing loans, while 77% have delayed improvement projects. 

More than half, 64%, report negative operating margins while 21% of hospitals say their operating margins are unsustainable. 

The report comes weeks before Gov. Kathy Hochul and state lawmakers return to Albany to launch the 2023 legislative session and negotiate a state budget. In the last year, lawmakers and Hochul backed bonuses for health care workers in order to help the industry retain staffers. 

Health and health care spending remain the largest items in the state budget driven in large part by the state's Medicaid program. 

A group of upstate Democrats last week pointed to the staffing struggles facing health care networks in their areas and vowed to provide support in the budget to help them fix the problem.