So why is the bill that's floating around such a precedent setter? Simple.
New York has been bailing out hospitals for over 25 years and New York has been supporting the debt of hospitals for at least that long.
But near as I can tell, New York has never before borrowed money to give it to hospitals and other medical facilities. And it has never done anything like this to bail out hospitals. And it has never done anything like this on this scale.
If New York State borrows a billion (the current proposed number) and then gives it to hospitals in New York as grants, then it will not only be on the financial hook to pay off the debt, but it will be on the political hook to ensure that the recipients of its largesse survive. It would be really embarrasing to have a hospital close after the State borrowed money to give to that hospital.
The bill states that the funds would go for information technology, consolidation, re-configuration and other functions. The other functions potentially include filling the gaps in the union benefit funds that hospitals have failed to pay. Funds could also be used to close facilities which would be a good idea, but it shouldn't be necessary to borrow to do that and there may be legal questions about the notion as well.
There may be other precedents in this proposal and I'm checking on those. More analyses and commentary to come. This is groundbreaking.
(This post continues our commentary about a proposal for a New York State public authority to borrow substantial funds and to use those funds to provide grants to hospitals and other medical facilities. The earlier posts on this topic are here and here.)