Hochul Vetoes Hospital Closure Notice Bill Again as Federal Cuts Loom for NYC

Governor Hochul’s veto of hospital closure reform leaves New York’s vulnerable communities exposed, just as a wave of federal funding cuts washes over the city’s health sector.

It takes fewer than six weeks to dismantle a hospital in New York—some are given even less time. It can take years for the surrounding community to recover, if it ever does. Last Friday, Governor Kathy Hochul vetoed, yet again, the Local Input in Community Healthcare (LICH) Act, a bill that would have thrown beleaguered neighborhoods a lifeline of public notice and oversight before hospitals or critical units such as maternity and mental health services disappear from their streets.

The LICH Act was, to its advocates, a bid for daylight in an otherwise shadowy procedural corridor. Presently, the process by which hospitals close is largely determined behind closed doors, shaped by hospital management and rubber-stamped by the state Department of Health. The legislation would have required up to nine months’ notice and compelled the submission of closure plans, with attendant reports detailing how such exits could reshape health equity in affected areas. Mandatory public hearings would have followed. Instead, the governor’s veto memo—her second rebuff of the proposal—argued that the costs and delays imposed by the measure risked compounding, rather than solving, the sector’s mounting distress.

Hospitals in New York City do not shutter in a vacuum. Out of 156 New York hospitals, approximately 70 now risk closure as a result of sharp Medicaid reductions forecast under federal legislation H.R.1, the Fiscal Policy Institute estimates. Nowhere in the state is such fragility more visible than in the outer boroughs, which have already witnessed a slow unwinding of hospital infrastructure in recent decades.

The city’s most vulnerable communities stand to lose the most from this opacity. Rushed closures tend to ripple outwards, straining emergency services, pressurizing remaining providers and, crucially, compounding health disparities. Expectant mothers must travel further for care. A psychiatric unit’s disappearance can leave hundreds without treatment options. And for workers—often unionized—and local economies, a hospital’s demise is a shock that reverberates well beyond the clinical.

In theory, transparency is a cheap currency. In practice, opponents of the LICH Act—most prominently the Greater New York Hospital Association—argue that codifying extended notice periods and lengthy public hearings would paralyse the so-called “transformation” of healthcare, hardening financial malaise and impeding hospital mergers or “right-sizing” strategies. “Paralyze health care transformation to the detriment of the communities [hospitals] serve,” as the GNYHA summarised in a memo. The notion is that delay, in itself, is a threat to survival.

Senator Gustavo Rivera, chair of the health committee and a champion of the bill, reckons otherwise: secrecy merely shifts the pain forward and spreads it unevenly. To close a hospital on five weeks’ notice is, he suggests, to disregard entirely the fates of patient populations that cannot pick and choose their zip code, their insurance, or their mobility.

City officials are not solely responsible for the precarious state of hospital finances. Their predicament is shaped by the tectonics of federal health policy. The anticipated Medicaid cuts, which could reach into the billions nationally, may yet accelerate the pace of closures irrespective of local legislation. But state and city policy, advocates argue, can cushion the blow: requiring that closure plans be subject to democratic scrutiny is both a symbolic and practical barrier against further erosion.

To her credit, Governor Hochul did direct the Department of Health, following last year’s veto, to issue updated hospital closure guidance. This, released just weeks ago, clarified procedures but stopped short of expanding oversight or mandating public review. Critics—including Lois Uttley of Community Voices for Health System Accountability—see this administrative tweak as cold comfort: “strong new government policies and action,” not mere memos, are needed if the city is to weather the coming squall.

A problem not unique to Gotham

Other American cities, too, have faced hospital “deserts” as a consequence of financial shortfalls and realignment. Between 2010 and 2020, nearly 120 U.S. rural hospitals shut their doors, according to the University of North Carolina’s Sheps Center. Even in urban megalopolises, closures disproportionately batter low-income, majority-minority communities. London, Paris and Berlin have enacted more robust oversight, requiring government approval, public notice, and in some cases, investment into alternative care. New York, by contrast, has allowed discretion to reside mainly with the hospital proprietors themselves.

The challenge for policymakers is to strike an elusive middle ground: provide nimbleness where it is needed (for hospitals genuinely beyond saving), but insist on transparency and participation wherever possible. No one expects statutory notice alone to save bankrupt hospitals, but a process so opaque as to muffle those most affected is, in the long run, self-defeating.

New Yorkers are hardly short of pressing concerns, but the slow attrition of their hospital system may yet emerge as a defining issue in municipal and state elections. As federal largesse dries up, and with further Medicaid cuts looming, the calculus for policymakers gets sharper. Delay and dithering are not, after all, cost-free. Yet neither is the casual dismissal of public oversight. Both portend a city less resilient—and less just.

The veto, once again, reflects the abiding tension between expediency and engagement, between the hard sums of fiscal health and the softer, long-term calculations of public confidence. In the end, it is the latter—the trust between government, institutions, and the governed—that undergirds both sustainability and legitimacy. If New York’s hospitals must close, let it be with eyes wide open, and with the city’s voice, however inconvenient, firmly in the room. ■