The city is offering cash incentives for trucking companies and small businesses to reduce daytime deliveries that clog city streets with more overnight routes in anticipation of congestion pricing.
Added costs and logistical hurdles often prevent small operations from embracing deliveries between 7 p.m. and 6 a.m. But with just weeks ahead of the June 30 launch of congestion pricing, and the up to $36 daytime charge it will bring for trucks entering Manhattan below 60th Street, the Department of Transportation says it will dole out $6 million in incentive payments for businesses to switch to overnight deliveries. That sweetens the pot since the companies will also save on congestion pricing fees, which during overnight hours drop to $8 or less for trucks.
The imminent congestion pricing tolls may heat up the historically lukewarm reception of mom-and-pop shops to move to overnight deliveries, business advocates say.
“The difference between now and past years is that congestion pricing could be a catalyst if there is more support, including financial from the city,” said Andrew Rigie, executive director of the New York City Hospitality Alliance. “It seems an appropriate time to at least have a discussion about offsetting the congestion fees by transitioning to overnight deliveries.”
Large companies, including Anheuser Busch-Inbev, Whole Foods Market and Just Salad, already participate in DOT’s Off-Hour Delivery program, which will oversee the new financial incentives. The new funds are geared toward smaller operations that may not be able to afford the added costs of having staff present for overnight deliveries, purchasing noise-mitigating equipment or be dedicating capacity to coordinate with shippers.
Transit officials say another $5 million committed through the congestion pricing program will help the city grow its off-hour trucking program.
Roughly 90% of the city’s goods are moved through New York City by truck, with more than 120,000 trucks entering and exiting the boroughs each day, according to city data. Businesses tend to receive their deliveries during the middle of the day when streets are at their most congested and the demand for curb space is at its highest.
Transit officials say shifting commercial deliveries to evening and overnight hours can reduce the glut of daytime truck traffic — and the street safety dangers that come with them — while also curbing costs for shippers. Businesses get the advantage of having their goods at the start of a day, instead of having to take time away from customers to process inventory.
“Our whole business model came out of this pain point,” said Dane Atkinson, chief executive of Odeko, a shipper that offers off-hour deliveries to coffee shops and bakeries. While at a Manhattan coffee shop one morning Atkinson described watching a barista struggle to juggle orders with an arriving shipment of inventory.
“It’s rough on the business staff to manage that process, it’s rough on the customers,” said Atkinson. “And it's not how Starbucks and other big brands work because they know the benefit of night and they know that loading when you don’t have customers is a better way to go.”
Odeko makes off-hour deliveries to some 1,400 businesses in the city, with the exception of a few locations that require daytime services such as the World Trade Center. Atkinson says an Odeko truck tends to make 35 deliveries around the city during off-peak hours, but traffic during the day often limits that number to less than 20.
Most of the company’s deliveries are actually to unattended shops, but it can be a challenge for shippers to get businesses comfortable with taking on the liability of providing access, whether that’s through a set of keys or a security code. “It requires the small business to have trust in their partner,” said Atkinson.
Zach Miller, director of metro operations at the New York Trucking Association, says he sees small retailers and certain eateries, such as delis and bodegas, as ideal for overnight deliveries. Unattended deliveries offer perhaps the most challenging and exciting opportunity for businesses, he added.
“It’s a perk to know that a shipper can come to a facility, unload and put items on the shelves before a store has even opened,” Miller said. “That’s where I think there’s options for growth, and if the demand is there fleet managers can adapt.”
Transit officials will host two webinars on June 3 and June 10 to provide more information about the incentive program and how businesses can apply.
For all the talk of a big-money exodus from New York, the city’s residents still have more wealth — in excess of $3 trillion — than those of any other metro in the world.
New York has almost 350,000 millionaires, which is the most of any city and up 48% from a decade ago, according to a global ranking of the wealthiest cities by Henley & Partners, an immigration consultancy. That means about one in every 24 of its 8.26 million residents has a seven-figure net worth, compared with about one in 36 in 2013. New York still has a large share of the ultra-rich, too: the report found that it has 60 billionaires and 744 people with investable wealth of more than $100 million.
The findings illustrate the scope of New York’s wealth at a time when some of the city’s richest people are fretting a power shift to Florida as the finance industry sets up a Wall Street South. Miami ranked 33rd among the cities with the most millionaires, up 78% over the past 10 years.
The Bay Area came in second overall, with 305,700 people with a seven-figure net worth living in the region that includes San Jose, San Francisco and Palo Alto. Tokyo came in third with 298,300, a figure that slid 5% over the past decade. Singapore, No. 4, has become a top destination for migrating millionaires with about 3,400 high net-worth individuals moving there in 2023 alone.
The boom in financial markets in the past few years has driven growth in the world’s richest cities, according to Juerg Steffen, Henley & Partners’ chief executive officer. Global equities surged 20% in 2023 and are up almost 7% this year.
However, some global cities have seen their fortunes reverse. London lost 10% of its millionaire population in the past decade, which included the UK’s decision to exit the European Union. Hong Kong saw a 4% decline in its millionaire ranks as wealthy expats left for Singapore following China’s pandemic-era crackdown.
Some cities on the rise include China’s Shenzhen, where the number of millionaires has surged 140% over the past decade. Bengaluru, India; Ho Chi Minh City, Vietnam; and Scottsdale, Arizona in the US, have also seen their millionaire population more than double in the past 10 years.
Dubai is the richest city in the Middle East, ranking No. 21 globally. Based on wealth per capita, Monaco ranks No. 1 in the world, with more than 40% of its residents being millionaires. New York City comes second.
NURSE PENALIZED: The state health department has fined a Monroe County nurse $55,000 for falsifying vaccine records for more than 100 school-aged kids throughout the state, the department announced Tuesday. Sandra Miceli, a licensed nurse practitioner, operated an alternative medicine practice in Monroe, fraudulently reported a total of 546 immunizations and spread misinformation about vaccines, department officials found. The fine, which Miceli has paid $30,000 of, is part of an order against her. The remaining $25,000 will be waived if Miceli abstains from administering vaccines that must be reported to the state and participating in similar schemes. Read more about the health department’s investigation into alternative medicine providers for vaccine fraud here.
TELEHEALTH EARNINGS: Upper West Side-based telehealth company Talkspace unveiled first quarter results Tuesday that surpassed analysts’ expectations. The firm recorded $45 million in revenue, up 36% from the first quarter of 2023, driven by a 92% increase in revenue from health insurance companies. Its operating expenses decreased by 9% to $23 million through cost-cutting measures, according to Talkspace. The company also achieved its first quarter of profitability on an adjusted earnings before interest, taxes, depreciation and amortization basis, chief executive Dr. Jon Cohen said Tuesday. Read more about the company’s contract with the city to address teens’ mental health here.
PATIENT DEATH: A young boy participating in a Pfizer drug trial has died, the company’s Duchenne muscular dystrophy gene therapy team wrote in a letter to community members Tuesday. The team is working with the trial site investigator to understand what happened to the patient, according to the letter. The Daylight study tested fordadistrogene movaparvovec, an investigational gene therapy that aims to treat the inherited neuromuscular disease, in boys ages 2-4. The Pfizer team has paused dosing for patients involved in the Ciffreo trial, which tests the same therapy in older boys, in light of the death.
MURAL STUDY: New York City Health + Hospitals is participating in a study of the impact of murals in hospitals, the health system announced Tuesday. The study will be led by Jameel Arts & Health Lab and the NYU Steinhardt School of Culture, Education and Human Development. The organizations will assess how murals at health care facilities around the U.S., the United Kingdom, Slovenia and Nigeria impact employees’ feelings of workplace belonging and patients’ feelings about their quality of care and well-being. H+H’s collection of art, including community murals, is the largest public art collection in the city.
Private equity investments in hospitals, physician practices and insurance companies dipped in the first quarter of this year, as fallout from the Change Healthcare attack and a ramp-up in government oversight has raised new concerns for investors, a new report shows.
Private equity firms in the U.S. announced or closed 158 deals in health care services during the first three months of this year, according to a report released today by capital market data firm PitchBook. Deals were down from 200 during the same time last year, a 20% decline.
New York is no outlier; there were just three health care services deals during the first quarter of this year, down from eight last year, data shows.
Those deals include an undisclosed investment in BlueSleep, a Midtown-based practice focused on diagnosing and treating sleep apnea, and the acquisition of Bayside-based Gentle Dental by Jackson Heights-based Dental Care Alliance. New York health care private equity firm WindRose Health Investors also bought Fort Worth, Texas-based physician enablement company CardioOne in March.
Lagging private equity activity in health care services is not new. Investors have contended with high interest rates and rising costs that have left them strapped for cash in recent years, resulting in an overall slow funding landscape.
Despite these challenges, financing has become easier to secure now than it was in mid-2023 – a factor that should spell optimism for an uptick in health care deals. But external factors such as the cyberattack on claims processing software company Change Healthcare and a ramped-up regulatory landscape have presented obstacles that have caused deals to stagnate, Rebecca Springer, lead health care analyst at PitchBook, said in the report.
The hack of UnitedHealth subsidiary Change Healthcare, which shut down claims processing for a large swath of the country and exposed millions of patients’ data, caused temporary delays in private equity deals, Springer said. Companies seeking private equity investments scrambled to address billing interruptions while investors sought assurance that revenues would go back to normal, she added.
The result is that private equity firms are more concerned about cybersecurity and compliance with patient privacy laws than before – and that’s showing up in how they make deals.
“This is a material risk that we take seriously,” said Steven Yecies, managing partner of Kain Capital, a private equity firm in the Financial District that invests in health care companies. Yecies said that his firm considers cybersecurity protections that companies have in place when making investments, factoring in whether or not they’d have to pay for cyber assessments and new technology in deal pricing.
Federal oversight of health care consolidation has increased in the wake of the Change Healthcare outage, causing investors to more carefully consider cybersecurity in their deals, Springer said.
But scrutiny of private equity activity in health care has also ramped up in general. Springer said that bad press around private equity involvement in health care has presented risks for deal-making, especially as federal regulators including the Federal Trade Commission, Department of Justice and the Department of Health and Human Services announced an inquiry on corporate greed in health care in early March. This headline risk could increase as the country heads into election season, she said.
“Even if the public spotlight drifts elsewhere post-election, we fear a lasting effect on perceptions of [private equity’s] interests and approaches among potential sellers and partners in the provider landscape,” Springer said.
States including New York have echoed these concerns, attempting to regulate private equity deals in health care on a local level. New York implemented a law last year that would allow it to track private equity investments in health care companies. California is trying to go a step further; the state legislature is considering a law that would allow its attorney general to approve or reject private equity deals in health care.
Despite the impacts of external challenges on deal-making, Springer said she expects deals to rebound later this year.
“Firms have deals in the pipeline,” she said. She added that experts expect most of the deal processes to progress slowly, with more announcements trickling in at the end of this year and “picking back up in earnest” in 2025.
Garnet Health Medical Center in Middletown recorded a -5% operating margin in the first quarter of 2024, an improvement over the first quarter of 2023, according to financial results released Tuesday.
Revenue increases drove the quarter’s better performance. Total revenues grew by 6% over the first quarter of 2023 to $161 million, while patient service revenue saw a 7% boost to nearly $159 million. Other revenue experienced the largest jump: a 20% increase to almost $2.5 million.
According to the hospital’s management notes for the quarter, inpatient utilization and patient days both grew over the same period of 2023, contributing to the revenue increases. Total discharges increased to 5,481 from the first quarter of 2023, a 5% boost. Medical/surgical units experienced the most growth, with 4,453 patients discharged from said units compared to 4,077 in 2023. Medical/surgical units also saw the largest increase in patient days for the quarter: they recorded 25,288 days total for the quarter, a 10% jump. Emergency room admissions also grew by 12% to 4,312, the notes show.
By contrast, outpatient utilization dropped by 8%. Outpatient surgeries and imaging procedures saw small bumps while the number of laboratory, oncology, cardiology, radiation, occupational therapy, physical therapy and substance use procedures and visits all declined.
Despite the hospital’s improved revenues, its operating margin remained in the red because of rising expenses, which were driven by higher wages and benefit costs. Total expenses rose by 3% to $169 million. The cost of benefits increased the most, by 17%, to just under $31 million. Wages saw a 10% jump to $66 million while the cost of supplies dropped by 2% to just over $29 million. These fluctuations are consistent with trends among other New York hospitals also dealing with persistent wage increases and staffing pressures.
Management notes said that Garnet Health Medical Center is working to improve its financial position in the wake of the results. The hospital applied for a grant through the New York State Statewide Health Care Facility Transformation Program, a state funding initiative to improve hospitals and health centers, with the intent to reduce debt. Leadership also applied for a $20,000 grant from the Vital Access Provider Assurance Program to improve the institution’s financial position.
Management noted that the hospital retained a national consulting firm in 2023, after recording quarterly losses, to help better its performance.
“It is management’s expectation that the successful culmination of certain initiatives will result in improved liquidity and operating results,” the notes said.
Representatives from Garnet Health Medical Center, which has 383 licensed beds, could not provide comment before publication. The hospital’s parent company, Garnet Health, also operates the Garnet Health Medical Center–Catskills hospital, which has two campuses in Callicoon and Harris, and a network of urgent care practices.