Transcript: Mayor de Blasio Discusses Brooklyn Hospital Crisis with Governor Cuomo and Legislators

January 27, 2014

Mayor Bill de Blasio: Well, thank you very much, Governor. I have to say – I was just doing the math, governor – that next spring – spring 2015, marks 20 years of knowing each other – 20 years, of working together. And I have to tell you it has been an extraordinary experience. I want to thank you for all of the work that we've gotten to do together. I will say along the way, the governor helped me to understand a thing or two about how to do the work of government more effectively, and I appreciate that deeply. It's been a tremendous personal friendship as well. And I remember comparing notes many a time about our children. As you said, at one point, you remember when I was bragging about the birth of Dante, the now famous Dante.

Governor Cuomo: Yes.

Mayor: And I have to say governor, I appreciate deeply our working relationship and what it’s going to mean for the people of our city. On top of that, I just want to tip my cap to your team because as I walked through the door here I saw Howard Glazer, Joe Percoco, obviously, Larry Schwartz. I felt it was like a reunion from various meetings and experiences over the last 20 years. We've all worked very, very closely together.

To the Brooklyn delegation, first of all, as your fellow Brooklynite, I could not feel this issue more personally, more deeply. So many of you have stood up to support healthcare in our communities and I want to thank you for that. We can all remember the various rallies, meetings, press conferences, all the things we tried to do to draw attention to the fact that our communities were truly in danger of losing the healthcare they need. And I want to thank you for your assertive, energetic support of these initiatives to protect healthcare. The one billion dollars that the governor references, that could be applied to this problem through this waiver, would have a seismic impact. This would have a crucial impact on securing healthcare in communities across Brooklyn for the long-term.

You know, we've been living, unfortunately, hand-to-mouth in recent months. We've been in the court system a lot. You know, we've been in situations where it wasn't clear whether Interfaith Hospital or Long Island College Hospital would even be there the next week. I want to thank the state. The state has stepped in each and every time. I know it has not been easy governor, and I know it hasn't been cheap, but you did something powerful by helping us have the opportunity to bridge two long-term solutions. We are united as the governor said, we're united in our pleas to the federal government to do the right thing for New York, to do the right thing for Brooklyn, give us this waiver so we can secure the long-term. This waiver is meant explicitly for this type of transformation and we need it and it's the right thing to do. I have spoken directly to Secretary Sebelius – I've made clear that I feel the same urgency the governor does. And that we have waited a long time for fairness for New York state and it's time for action.

I'm convinced that we can secure local healthcare. Yes, in every process there will be transformations, but I'm convinced that we can secure local healthcare. We can secure emergency room capacity. We can secure primary and preventative care and some of the crucial services that each hospital specializes in; for example, some of the mental health capacity at Interfaith. So, that's what we want to focus on. Governor, if you'll indulge me one more moment, just to say that I appreciate this governor's focus on this waiver because it comes against the backdrop of things that happened before he or I ever got to our respective offices. Over the last 12 years, we lost 12 hospitals in New York City. Some got a lot of attention like St. Vincent's in Manhattan, others got less attention, but it was the same exact mistake played over and over again, where there was not a clear strategy from leaders at the city and state level to resolve the issue.

This is different. We are working together and we're doing the right thing by saying to the federal government, ‘You have to be at the table to help us solve the problem because you have a tool at your disposal that would have a transformative affect.’ The facts of these closures have left many, many people without the healthcare they need. In fact, a recent study said that one in four Brooklynites today – even with the two hospitals still running as they are now – one in four Brooklynites lacks access to primary healthcare. And we know that the emergency room capacity provided by Interfaith and LICH makes them the first points of emergency room access for almost a quarter million people. So the magnitude of this is abundantly clear, the waiver is the right thing to do. The governor long since, with what he did with the Medicaid Redesign Task Force, established the notion that we could reform, we could better, we could actually have a plan, not a series of disconnected transactions, but a plan to preserve healthcare and make it financially viable. This would be a crucial next step and we are going to work shoulder-to-shoulder to get this done, and it's time for the federal government to be a true partner in this process. Thank you governor.

Governor Cuomo: With that, we’ll turn it over to the press if there are any questions on this topic?

Mayor: I don’t think they have any questions.

Governor Cuomo: They don’t – who’s that fellow? Do you recognize that fellow with his hand up in the air?

Question: [inaudible]

Governor Cuomo: You know Zack, we’ve been doing the short-term plan for 18 months. The short term plan, as the mayor said, is hand-to-mouth, it’s month-to-month. And this is very expensive, literally hundreds of millions of dollars, and it’s not an investment, we’re not accomplishing anything. We’re just in this holding pattern that is phenomenally expensive. We can’t afford to do any more. And there’s no reason to do it. We’re not accomplishing anything. We need to transform the system. We need funding from HHS to do that. We’ve been talking to them for 18 months, and we need them to act. You know, government needs to respond to the moment. We’ve had this discussion in this room many times. Well government has a process, and this is the government process. I know, but it’s not that reality has to fit the government’s process, it’s that the government process has to fit reality, right? The job of the government is to be responsive to the situation. And we need them to respond, and we need them to respond now. Whatever it is, we will do on our end. But, we need an answer, yes, ten, eight, six or no. You know, we just need an answer and we need that answer now, and depending what the answer is, then we’ll make our determination.

Question: Governor, so what do you attribute the HHS’s failure to act on this, is it bureaucratic, you know, foot dragging? Does it have something to do with the somewhat broad history of New York Medicaid programs?

Governor Cuomo: You know I – I think Casey, probably all of the above. I don’t want to speculate. People have been critical of the New York Medicaid program over the years. As the mayor said, you inherit a situation, pre-dating my administration, the – there’s been criticism of the New York Medicaid program. I think everyone will say of late, the Medicaid program has done extraordinary work, and is a national model. But, there’s no doubt that that’s in the air. There’s no doubt that this is a bureaucratic process that has to be gone through.  I understand that. You know, I understand bureaucratic processes very well. I hear that all day long. I also understand that the challenge is the exact opposite. I understand government’s process. I also understand the reality of the situation, and there are alternatives. Look, if HHS does nothing, we cannot continue to hold up these hospitals. And you will see hospitals close – and you will see hospitals close, and jobs lost, and communities hurt. That is the reality of the situation. Government is supposed to stop that from happening whenever possible, especially when it’s an unintelligent conclusion.

Question: [inaudible]

Governor Cuomo: Let me refer that to Jason Helgerson, who’s been working more closely with CMS than I have on this.

Jason Helgerson: Sure, certainly governor. So the governor’s proposal in the budget is $1.2 billion of capital. So, basically we fill in the gap for what CMS says that they were not prepared to fund. I think it’s important to point out that New York did have a waiver approved by CMS several years ago that did give us ability to spend money on capital but they’ve changed their position on that. So, the governor’s budget really helps to fill that gap. The other component here is basically to allow pilot projects to bring in private equity potentially to invest in some of these hospitals. The idea being that with both state borrowing along with potentially, in some of the projects, some private equity along with the waiver funds collectively between those three sources, we’ll be able to really fundamentally transform how healthcare is delivered so that it’s sustainable well into the future, even beyond the life of this particular waiver.

Question: [inaudible]

Jason Helgerson: Absolutely not. So the proposal really is, is that it’s still going to be a not-for-profit administration but the idea is to allow some private investment, obviously with potential rate-of-return. But the idea is that we need to find a way to get more dollars into investing in these hospitals. A classic example, I – we hear from the Brooklyn delegation all the time is, why are the rates in Medicaid lower in Brooklyn than they are in Manhattan? And the reason for that is that Manhattan hospitals have had access to capital. They’ve invested in the physical plan and as a result the rates that the Medicaid program pays are hirer to help reimburse for some of that capital. We need to change that paradigm and – and these proposals in essence in aggregate will help to make those investments that haven’t been made for many years.

Question: [inaudible]

Governor Cuomo: Who’s asking the question? Please identify yourself.


Governor Cuomo: Ken Lovett, Daily News.


Governor Cuomo: That’s him.

Mayor: That’s him over there?

Governor Cuomo: Yes.

Mayor: Right there?

Governor: Yes, that’s him. Looks more scary in person, doesn’t he?

Mayor: Is your security dealing with him or mine?

Governor: We’ll make him sit in the back row.
Mayor: That’s right.


Question: [inaudible]

Governor Cuomo: I’m going to refer that to Larry Schwartz?

Question: [inaudible]

Mayor: You don’t want to hear from Larry Schwartz?


Mayor: I find that troubling. Larry I’m going to defend your reputation here.

Governor: I’m honored.

Governor: I don’t believe there’s any new developments.


Larry Schwartz: First of all, you know, the governor’s office and the mayor’s office have excellent communication and we’re working very closely together to resolve this problem. I talk to Tony Shorris, the mayor’s first deputy mayor, on a daily basis and we’re working cooperatively and collaboratively on – with SUNY to resolve this matter ASAP.

Question: Governor, giving that the initial ten billion dollar waiver application included some of these capital cost, do you anticipate the final waiver – when the waiver’s granted it will be less than ten billion dollars?

Governor Cuomo: You know I’m not going to negotiate against myself, John. We have the same conversation whether we’re doing the budget or whatever we’re doing, right? The ten billion dollars is a request. Is it feasible that the federal government comes back and says it’s not ten billion dollars? And as I said it’s ten, it’s eight, it’s six or whatever the number is – that is a feasible situation and outcome. But we’re not going to negotiate ourselves. We requested ten billion dollars. We think that ten billion dollars is the right amount to invest. It is common place for these things to go back and forth, and for the final outcome to be different than the request, that is true.

Question: Your budget as it is crafted right now does not rely on the waiver being granted. If it is granted would that allow you to spend less money on healthcare?  

Governor Cuomo: No, John, because we don’t have the number in the budget. That’s the point. We do not now have this number in the budget. So, there is no way to do it without the granting of the waiver. It wouldn’t free anything up in the budget because we don’t have it in the budget.

Am I making myself – do you know what I’m saying John?

Question: Given that you’re not anticipating it in the budget, if you did have this ten billion dollar waiver would that free something up elsewhere if you [inaudible]. 

Governor Cuomo: Oh, you mean besides the one billion for Brooklyn? I don’t believe so. Jason, do you know of –

Jason Helgerson: No. In fact, the federal government does not want states to use waiver dollars to supplant, right. So as a result, this is additive resource this is new investments. Now, over time, as the governor said that this will generate additional Medicaid savings which will help us live within the global spending cap, which currently is the law of the state. So, obviously we think that it’s going to make the system more efficient. But at first, we need to really make some investments here to really make the system sustainable well into the future.

Question: Governor, switching topics for a second, this morning the mayor [inaudible]. Do you think the people of New York City should decide for themselves the city income tax? If not, why not?

Governor Cuomo: The – well, we have a state constitution, which sort of governs what we do here, most days. Some would argue that concept, on either side. The state constitution says the state approves taxation. Localities propose taxation at times and then the state legislature has to make the determination. We talked about home rule, home rule messages the device, often, by which localities express its opinion, but it’s clear in the constitution that the state has to pass a law to authorize local taxation. Otherwise, you’d have different taxation districts all across the state, potentially, and you could have tax wars within neighboring jurisdictions. So – obviously wouldn’t make sense for anyone. So, the state is the planning basis for taxation by the constitution.

Question: Sir, is there anything the Mayor can say or do to have you change your mind on this issue?

Governor: I think the Mayor – well first let’s take a step back – on the pre-k issue – are we talking about? Well you know the formula for success, Mr. Levin – two steps, one caveat. Step one is decide what you want to do – step two is do it – caveat is step one is very difficult. It’s more the decision and the commitment. We have decided and we are committed to doing universal pre-k, and that is a very big deal. We’re one of four states in the country. I believe – with the Mayor – that it is one of the single best investments you can make in the education system, in the young people. You can change people’s lives, literally, by getting to them early during the formative periods of the mind, etcetera. So this is a very big decision. We’re excited about it. It’ll make the city a better city. It’ll make the state a better state. Second question becomes, well how do you do it? And that’s the discussion that we’re going to be having over the next several weeks. I’ve made my proposal – it’s called the State of the State – it’s called the budget. The Assembly will make theirs – the Senate will make theirs – the mayor will make his. And that’s the conversation that we have, and that’s the process that we’re going through now, and that’s why the Mayor was here testifying today. But my proposal is my proposal. Like my proposal is $10 billion dollars for the Medicaid waiver, that’s my proposal. My proposal is the State of the State, and is my budget.

Question: Governor [inaudible] are you certain that you’re opening [inaudible] so said that your proposal to the Feds is not written in stone [inaudible] but are you also open to –

Governor: You think the Senate and the Assembly may make a modification of my budget? Is that what you’re suggesting?

Question: [inaudible]

Governor: I am taken aback at this suggestion.


Question: Would you support any kind of tax hike for the City?

Governor: I have made my proposal, and I believe my proposal is the best proposal for this state. And I would be shocked if the Senate or the Assembly tried to modify.

Mayor: I just – quick addition – the coordination, communication, cooperation between city and state – as the Governor indicated – as Larry Schwartz indicated – is constant on a number of fronts. You know, guess what guys? Once in a while, we may have different perspectives. But we’re going to work it through in a lot of different ways because we have a lot of fundamentally shared goals. And in this case personally, we’ve had a lot of the same vision of what government should be going for people for a couple of decades. And we’ve been working together on that vision for a couple of decades in different ways. So I never have a problem with the notion that we might have different visions of what’s the best way to get something done. But when you’re in a constant state of dialogue, trying to figure out ways to get things done for people, that’s fine. And we’ll continue to work together on many, many fronts. And the waiver is a great example of something we feel combined urgency on, and there’s going to be a great joint effort to get this done.

Governor: Can I take it one step further? I would argue that the test of the relationship – you know, we think about governors and mayors, and in modern political history you have some relationships that were clearly not productive, right?

Mayor: What are you saying?


Mayor: I never read about that.

Governor: It’s vague enough so you don’t know what I’m saying. Keep it vague. You look back at the relationships in history where you would say, well, these were good relationships, right? Governor Harriman – Harriman – Wagner – Rockefeller – Wagner – it’s not that they were periods of time or relationships where there weren’t differences of opinion. You will have differences of opinion. You have different positions, you have different jobs, you have different jurisdictions, you have different electorates, you have different needs. You will have differences. It’s not that I don’t have differences with the Assembly and the Senate from time to time – we do. It's how you deal with them. It's how you resolve them. Is it productive, is it unproductive? Is it constructive, is it deconstructive? That's the test of a relationship that works, and that's the test of leadership. And that's what I'm excited about with this new mayor. Let's take one more question and then I know the mayor has to go. Laura.

Question: So, the city resubmitted [inaudible] correct?

Governor: I wouldn't say resubmitted. This has been an ongoing discussion back and forth – back and forth for 18 months.

Question: So, [inaudible] other states have made it 6 months, if the city has to wait another 4 months to get this approved, [inaudible]

Governor: No. The short answer – no. We have waited 18 months. The modification was at CMS's request, that's part of the dialogue, generally. We send in the form – the application – they say we'll do this, we send it back doing what they said. That doesn't start the clock all over again, right? That'd be some bureaucratic game, right? Every time you send us a piece of paper we reset the clock, and you never get to a deadline because we just keep resetting the clock. I can't believe that's what they're saying. 

Mayor: Quick addition. I would say February is a really good month for the federal government to resolve this problem. 

Question: Do you mean that if you don't have the [inaudible] the hospital will close by the end of the month?

Governor: February is the last period that I can do a modification to our budget. It's not in our budget now. There are no funds to continue this. If we get the waiver, then I will do a budget modification. 

Question: Governor, if I could just ask a question – and the Mayor as well. Pre-k – you both decided that you want pre-k to happen, so why the political checks? Why don’t you two just walk into a room and make it happen. Why the back and forth [inaudible]?

Mayor: I like your confidence about the process of government. I really admire it. 


Governor: It's about the money. It's about the money. It's about funding, and how we do it. It's the little details.

Mayor: It's an ongoing dialogue.  It's an ongoing dialogue and we're obviously representing the common goal. And I said, I sat down at the Washington Conference of Mayors and I said I applaud the governor for his leadership, which is being felt all over the country on the issue of pre-k. We have a pathway forward that we have to make sense of together, but that's just another day in government. And we're going to keep working together. 

Governor: Ok, guys, thank you.

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