Reflections on the New York City Health Czar Proposal of 1977 and Its Origins

New York City's fiscal crisis of 1975 was the result of many years of deficit spending to support a variety of expanded services and generous union contracts. These deficits were covered for years by the issuance of city short-term notes and long-term bonds. Eventually, the city's mounting debt of $14 billion led to its inability to sell its notes and bonds. In order to deal with the possibility of the city's financial collapse, the governor of New York State and the state legislature created the Emergency Financial Control Board (EFCB), whose purpose was to manage the city's budget and cost reduction plans. They also created the Municipal Assistance Corporation (MAC) responsible for fiscal oversight and the sale of specially issued bonds. Both agencies eventually played major roles in preventing the city's financial collapse. In an effort to address the costly 5,000 excess acute care hospital beds in the city, the governor and his advisors proposed the creation of a Health Czar (HC). The purpose of this position was to shift responsibility for hospital closures and downsizing from the state government to a para-governmental individual. While there was early support for this proposal by some print media, opposition soon arose because of the flawed structure of the proposal. Also, many initially opposed it because it included the city's public health agency, the New York City Department of Health (NYCDOH), which did not have any responsibility for hospitals. The HC proposal eventually lost broad support because it bypassed legally established processes for the oversight of hospitals. It also almost uniquely focused on the public hospital system, and in so doing gave a pass to the voluntary hospitals and their excess bed capacities. The proposal eventually lost the support of the then mayor when the governor publicly supported a rival candidate in an upcoming election. The election success of yet a third candidate opposed to the proposal resulted in its eventual abandonment by the governor.