New York City Nurses Confront an Austerity Avalanche

On July 4, 2025, President Donald Trump signed into law the One Big Beautiful Bill Act (OBBBA), the congressional budget bill that simultaneously exploded the federal budget deficit and slashed deep into the United States’ already-threadbare social safety net. The OBBBA delivers $4.5 trillion in tax cuts that will primarily benefit the very rich, while making severe cuts to Medicaid and food stamps (the Supplemental Nutritional Assistance Program, or SNAP). To be precise, the bill cuts $935 billion in Medicaid benefits and $285 billion in SNAP benefits over the next decade. These cuts, of course, will mostly hurt the country’s poorest. (For more on OBBBA’s distributional consequences, see John Miller’s “No Matter How You Look at It, the Big Beautiful Bill is a Monstrosity” at D&S’s Left Hook Economics blog.)

How individual states will deal with the austerity rolling downhill from the federal government is still to be seen. What is clear is that it will mean immense hardships for many people. The Congressional Budget Office, for instance, estimates that as many as 11.8 million Americans may lose their health insurance as a result of Medicaid cuts, which are set to go into effect at the end of next year. This, in turn, will create significant challenges for the health systems that serve large numbers of Medicaid-insured patients.

This is the case in New York City, where more than 20,000 private-sector nurses represented by the New York State Nurses Association (NYSNA) are now simultaneously bargaining for new contracts with 12 different hospitals. Two-and-a-half years ago, striking NYSNA nurses at Montefiore Medical Center in the Bronx and Mount Sinai Hospital in Manhattan won a historic contract that included a real enforcement mechanism to address the crisis of short staffing: whenever hospitals violate agreed-upon staffing ratios, they are forced to pay fines to the nurses who had to work short-staffed shifts. Nurses at those and other hospitals also won pay increases of 7%, 6%, and 5% for the three years covered by the contract.

Today, nurses are confronting the challenge of bargaining with their employers under the impending avalanche of the Medicaid cuts. These cuts will mean serious financial pressures on some of the hospitals, especially the city’s safety-net hospitals, which disproportionately serve poorer patients.

Yet the major hospitals associated with academic medical centers—Montefiore, Mount Sinai, and NewYork-Presbyterian Hospital (NYP)—are hardly impoverished. They boast balance sheets that are in far better condition than they were when nurses negotiated their last contracts, they are investing heavily in tech and real estate, and they are overseen by top executives who rake in millions of dollars in annual compensation. There is room, it seems, for these hospitals to address nurses’ demands for pay raises commensurate with the cost of living, protecting their health insurance coverage and job security, and for adequate staffing, which continues to be a problem for nurses’ working conditions and patient care alike.

That’s not to say the impact of the Medicaid cuts can be dismissed, particularly on the safety-net hospitals, which have long been in dire financial straits even before this latest round of austerity. But the nurses have the potential power to create a political crisis for the state government in Albany and force it to cover funding shortfalls to protect patient care for everyone across New York State.

The Impact of Trump’s Medicaid Cuts

OBBBA is predicted to throw millions of Americans off Medicaid through the imposition of work requirements. Effective December 31, 2026, adult Medicaid recipients between the ages of 18 and 64 must verify that they are spending at least 80 hours a month in “work-related activities.” This requirement is certain to result in many low-income people losing their insurance. “States that have previously passed such work requirements have seen many people lose insurance, though often because the bureaucracy made it too difficult to prove that they were actually complying and so should have been Medicaid eligible,” said William H. Dow, professor of health policy and management at the UC Berkeley School of Public Health, in an interview published by the school. Beyond these work requirements, OBBBA will also remove Medicaid eligibility from some categories of (documented) immigrants.

New York Governor Katy Hochul’s office has forecasted that the state will lose out on $8 billion in Medicaid funding and that 1.5 million New Yorkers will lose their health insurance as a result. These cuts will fall heavily on New York City, where a little over half of the population is enrolled in the program. New Yorkers’ loss of their Medicaid coverage will in turn impose burdens on city hospitals. “The reduction of federal funding will lead to coverage losses and increases in uncompensated care for New York State providers, who will be left to cover the costs of uninsured New Yorkers. This will affect the delivery of health care services for all New Yorkers and could force facilities to close,” the New York State Department of Health said in apress release on September 10.

The cuts are expected to have a greater impact on the safety-net hospitals, many of which are already in the red and rely more heavily on Medicaid payments for revenue. For example, at Wyckoff Heights Medical Center, a safety-net hospital in Brooklyn, 48% of patients in 2023 were covered by Medicaid in 2023. By contrast, only 27% of NYP’s patients in 2023 were
on Medicaid.

There is a human story behind these figures, of course. In essence, academic medical center hospitals like NYP, Montefiore, and Mount Sinai tend to serve wealthier, whiter patient populations who are more likely to have private insurance; they also tend to provide specialty outpatient services that generate more revenue for the hospital. Safety-net hospitals like Wyckoff and Flushing Hospital Medical Center, on the other hand, serve a greater share of poorer patients and people of color, who are more likely to be on Medicaid or to lack insurance entirely. And the safety-net hospitals tend not to provide the higher-revenue-generating services that the major medical centers offer.

What this means is that New York City has a largely segregated, two-tier hospital system. And it is the already-struggling safety-net hospitals that stand to be most affected by federal Medicaid cuts.

Hospitals in Financial Jeopardy?

The Medicaid cuts are a flashpoint in NYSNA’s bargaining with the hospitals. The employers are claiming that the financial uncertainty due to the looming cuts make satisfying the nurses’ contract demands unfeasible. In fact, the hospitals—including the well-endowed academic medical centers—seem to be going on the offensive in trying to paint nurses’ demands as unreasonable to the public.

On September 23, Crain’s New York Business ran an article titled “Nurses’ union demands pay bump as bargaining starts with Montefiore, NewYork-Presbyterian.” Health care reporter Amanda D’Ambrosio wrote that NYSNA was “asking major health systems including NYP and Montefiore for a 10% pay raise” over the life of the contract. The article goes on to relay that wages were “expected to be a major sticking point as hospitals say they are facing unprecedented financial challenges due to federal funding cuts.” Nurses we spoke with suspect that the hospitals leaked the nurses’ wage demands to the publication.

The truth about the economics here is more complicated, especially when it comes to Montefiore, NYP, and Mount Sinai. Medicaid cuts aside, these hospitals are in fact in a much better financial position than they were at the beginning of 2023, when nurses bargained their last contract.

According to financial records reviewed by D&S, the NYP system had a net income of about $126 million in the first quarter of 2025 and nearly $1.5 billion for the 2024 fiscal year, up from $46.7 million in 2022. Montefiore, meanwhile, had a net income of roughly $104 million in 2024, up from a net loss of $253 million in 2022. The Mount Sinai Health System, which includes the main Mount Sinai Hospital in Manhattan as well as the Morningside and West hospitals and a variety of other entities, reported an overall net income of $127 million in 2024. (We were not able to access records from prior fiscal years.)

A more granular look at the balance sheets of these institutions, and how they are making and spending money, belies the idea that they are on the brink of financial ruin.

Though they are nominally nonprofit entities, these hospital systems are doing big business, overseen by C-suite executives with compensation packages approaching the average for S&P 500 companies. The most recent data for the Mount Sinai Health System indicates that in 2023 its then-CEO, Kenneth Davis, made about $7.2 million. NYP president and CEO Steven J. Corwin took home $14.6 million, while Montefiore president and CEO Philip Ozuah raked in $16.4 million, making him the second highest-paid hospital executive in the state.

And these lucrative hospital systems do not limit their activity to medical care. The Mount Sinai system, for instance, includes Mount Sinai Ventures, a venture capital firm, as well as a number of for-profit real estate holding companies. Montefiore Medical Center similarly has for-profit real estate holding companies and subsidiaries devoted to tech acquisition. NYP, meanwhile, has an investment fund known as Hudson East River Systems, which managed about $11 billion in assets in 2023. (Hudson East River’s president, Michael P. Breslin, is also the chief financial officer of NYP.)

The hospitals’ involvement in financial and real estate speculation is part of a broader trend toward the financialization of health care in the United States. In a 2021 report published by the Center for Economic and Policy Research, economists Eileen Appelbaum and Rosemary Batt argue that this trend, which developed in the late 20th century and has accelerated during the 2000s, has led to a situation in health care where “the logic of financial calculations often overshadows the logic of human caregiving.” This has meant that officially nonprofit hospitals have turned to strategies like using mergers and acquisitions “to expand revenues while also cutting costs through hospital closures [leading to] a decline in patient access to care,” while also “[making] acquisitions to concentrate market power and raise prices.”

It’s not too surprising, then, that the bond rating companies charged with assessing these hospitals’ creditworthiness are not seeing major reason to worry, despite the fearmongering about federal Medicaid cuts. In June, Kroll Bond Rating Agency affirmed a “BBB-” rating for Montefiore and a “stable outlook,” despite acknowledging its being subject to an “evolving Medicaid landscape.” In late July, after passage of the Big Beautiful Bill, the rating agency Fitch gave NYP an “AA” rating and Mount Sinai a “BBB” rating.

The situation is less rosy at most of the city’s private safety-net hospitals, which are more exposed to Medicaid cuts. These hospitals have been operating in the red for years and are reliant on the state to cover the gap. According to the New York State Executive Budget Briefing Book for the 2026 fiscal year, “Currently, 75 of 261, or 29%, of New York’s hospitals are financially distressed, and overall distressed hospital spending has increased over 600% since FY 2017.” Data from the National Academy for State Health Policy shows that Wyckoff had a negative net income in 2021, 2022, and 2023 (the latest year for which it has information), as did many of the other safety-net hospitals NYSNA is bargaining with: Maimonides Medical Center, Kingsbrook Jewish Medical Center, Interfaith Medical Center, and Richmond University Medical Center.

So, the question is not whether Medicaid cuts will put these hospitals in financial crisis. They are already in financial crisis, and they already rely on public funding from New York State to keep them afloat. The real question is whether and how the state will keep these hospitals alive and ensure they are able to provide quality health care to their disproportionately poor and working-class patient populations.

Nurses Against Austerity

The NYSNA nurses that D&S spoke with at Mount Sinai, Montefiore, and NYP painted a picture of their deep-pocketed employers taking an aggressive approach toward workers before and during bargaining, flouting current contracts and using federal austerity to instill fear and lower expectations.

Michelle Gonzalez, an ICU nurse at Montefiore, said nurses there have seen significant improvements in staffing since their strike in 2023 won safe-staffing enforcement language. (For more on the strike, see Nick French, “One Year After the New York Nurses’ Strike, What Comes Next?” D&S, May/June 2024.) But when nurses have filed complaints about staffing-ratio violations, Gonzalez says, the hospitals have delayed the arbitration process for months on end. “Unfortunately, with these employers, it doesn’t matter if you bargain the best language,” Gonzalez told us. “They’re still going to find loopholes.”

Montefiore nurses are therefore seeking to include language in their current contract that would prevent the hospital from dragging out arbitration of staffing complaints once they’ve been initiated, Gonzalez says. They are also seeking to require that the hospital employ additional staff to cover nurses when they go on break, as well as improving nurse-to-patient ratios.

Job security was another issue that D&S heard about from nurses at multiple hospitals. The concern is particularly urgent at NYP, which laid off 1,000 health care workers this summer, including 65 NYSNA nurses and nurse practitioners. Beth Loudin, a neonatal ICU nurse on the bargaining committee at NYP, said, “When NewYork-Presbyterian announced the staffing cut, we were like, ‘That won’t be bedside, right? That’ll be corporate folks.’ But obviously it ended up affecting our membership. [So] a big demand this year is to maintain jobs and services—saying no layoffs and improving layoff protections that haven’t been touched in the contract for 30 years.”

Loudin said that she and other nurses at NYP “see the layoffs as scare tactics.” The hospital justified them, she said, as “saving [funds] in the event the Medicaid cuts went through.” The hospital is also attempting to use the cuts, and the weaker financial position of the safety-net hospitals, to get nurses to scale back their demands. Because the union is engaging in coordinated bargaining across all the hospitals and attempting to reach similar contracts at each, in the initial bargaining session at NYP, Loudin said that management argued that “any decisions we make at our table impact Wyckoff. NYSNA doesn’t want a two-tiered system, so you guys are responsible for the decisions we make here.” Management, in other words, wanted to remind nurses that safety-net hospitals might not be able to afford paying their nurses the sort of salaries and benefits that wealthier hospitals like NYP could, in principle, tolerate.

Matt Allen, a labor and delivery nurse at Mount Sinai, disputed the premise that austerity means nurses needed to withdraw their demands for adequate staffing, good pay, and job security. Allen told us that a group of rank-and-file nurses from both private-sector and city hospitals across New York City have put together a petition “calling out how the state can creatively address the shortfalls that are going to come.” The group is proposing, among other things, raising taxes on the wealthy, reassessing hospital executive compensation, and a “health care industry overhaul” including efforts to prevent price gouging by hospitals and insurance companies and to address racial and economic disparities in care. “This is a solution that could happen if we had politicians that actually wanted to do a damn thing about it,” he says.

The Way Forward

These sorts of reform proposals suggest a way forward for NYSNA nurses, and New Yorkers broadly, who want to refuse austerity in health care. It makes sense for nurses to reject a two-tier system of pay and benefits, which would likely create labor shortages and put even more strain on safety-net hospitals. But contrary to what hospital executives might say, that is not a reason for nurses at the rich hospitals or the safety-net hospitals to demand less. It’s a reason to demand state action to ensure that New York State’s hospitals are fully and equitably funded.
Whether hospitals like Maimonides and Interfaith will be open a few years from now will depend on what the state does, and this was true even before Trump’s Medicaid cuts. The safety-nets should not be balancing funding shortfalls on the backs of health care workers and their patients. Instead, nurses and community supporters can demand that the New York State government provide resources to ensure these hospitals can function well.

Where would these resources come from? There is, as Allen and his fellow nurses argue, the always appealing option of taxing the rich. They argue that a small tax increase on billionaires can more than offset the losses from federal funding cuts. Raising taxes on the rich is a good idea for many reasons, one that New York City mayoral candidate Zohran Mamdani and his socialist allies in the New York State legislature are already gearing up to fight for in order to fund other social programs. (For more on Mamdani’s platform and how he might fund it, see Nick French, “Zohran Mamdani’s Bold Program for an Affordable New York City,” D&S, September/October 2025.)

But even in the absence of the significant tax increases on the wealthy favored by the socialists, there is room for state policy to, in effect, redistribute money from richer to poorer hospitals, according to a health policy analyst D&S consulted for this article, who spoke on condition of anonymity. One way New York State currently provides funding to hospitals is through its “Indigent Care Pool,” (ICP) which helps pay for the treatment of lower-income patients. The ICP could be reformed to provide more money to safety-net hospitals and less to wealthier hospitals. Mamdani himself has recently expressed support for better targeting indigent care funding as a way to address funding shortfalls due to Medicaid.
In any event, nurses across the hospital system have an interest in shoring up the situation of the safety-net hospitals. Without more support from the state, worse nurse contracts at the safety-net hospitals threaten to drag down the working conditions of all nurses. And if safety-net hospitals were to shut down, their abandoned patient populations would impose greater burdens on already-overstretched health care staff at the remaining hospitals.

And because 20,000 of them are negotiating contracts across the city that expire simultaneously on December 31, NYSNA nurses have leverage to demand serious intervention by the state. A system-wide strike, especially one that rallied public support in defense of adequate patient care and saving the hospitals that serve working-class communities, could force the hospitals’ hand at the bargaining tables. It could also create a political crisis for Governor Hochul and legislators in Albany if the strike made clear that an emergency funding bill was needed during the state legislature’s budget session early next year to fix New York State’s health care system.

Says Montefiore’s Gonzalez: “If 20,000 nurses—especially with the bigger hospitals in solidarity with the smaller hospitals—were saying, ‘We’re not moving, we’re not going to provide you labor until you figure out where you’re getting the money to take care of these patients, our communities aren’t going to suffer because of the Medicaid cuts that are coming’ . . . I do think we have the power for it.”

Nick French is an associate editor of Jacobin magazine and a member of the Dollars & Sense collective.

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