Michael Bloomberg’s media organization extended its lease at 731 Lexington Ave., providing a big win for the building’s owner shortly before its $500 million mortgage comes due.
The 11-year extension takes effect when Bloomberg LP’s existing lease for 950,000 square feet expires in 2029. The firm will retain all its space. Terms weren’t disclosed, but the media organization paid $132 per square foot in 2022, Crain’s reported.
“We’re glad to be staying,” said Bloomberg, CEO of Bloomberg LP and the former mayor, adding he’s a believer in “the power of in-person work to drive collaboration and innovation, and 731 Lexington’s open spaces help us do that.”
For the building’s owner, Alexander’s Inc., the timing couldn’t be better because the mortgage expires in June and will have to be refinanced, likely at a higher rate. Alexander’s, which is managed by Vornado Realty Trust, had asked lenders to extend the loan before signing the lease extension with Bloomberg, and Fitch Ratings lowered its outlook for the mortgage in February on the risk a deal might not get done. Signing the tenant that occupies 98% of the office space should make refinancing much easier.
The 1.3 million square-foot, 56-story building at the corner of East 59th Street was developed by Steven Roth and opened its doors in 2004. The top floors are residential, and Bloomberg’s global headquarters take up most of the rest.
“Bloomberg’s decision to remain is a testament to the rare and enduring quality of the tower,” Roth said in a statement.
When does efficiency turn into bureaucracy?
City Council members and the Adams administration went head to head last week over that very question.
During a contentious Wednesday hearing, city lawmakers voiced their displeasure with a new City Hall policy requiring officials to fill out a form to request meetings with or action from agency leaders.
Council members said they were blindsided in April by the launch of the Elected Officials Agency Engagement Request portal, saying the process would upend the decades-old practice of lawmakers directly contacting department officials to request a meeting or seek help for a constituent issue. Even some members of the Adams administration think the form is a waste of time.
As Crain's reporter Nick Garber noted in a recent article, critics accused the mayor of implementing the system as another form of micromanagement. But Tiffany Raspberry, Adams' senior adviser and director of his intergovernmental affairs office, characterized it as an effort to streamline services, centralize requests and level the playing field to ensure that newly elected officials are not disadvantaged compared to government veterans with more extensive contact lists.
"The form is not intended to stand in the way of elected officials picking up the phone to reach out to a commissioner, borough commissioner or any other official in the administration," said Raspberry.
City Councilman Lincoln Restler, however, reportedly questioned the Adams administration's legal authority to weigh in on how the council interacts with agency leaders.
But officials might be a bit hasty in their dismissal of the new policy. Yes, Mayor Eric Adams has a reputation for getting involved in issues that don't necessarily warrant his input. With everything from homelessness to rats wearing on the city, how lawmakers interact seems as if it should be the least of his worries. And it's possible the new form would have had a smoother rollout if suggestions had been taken from the people who would be using it before it became a mandate.
However, cronyism and "playing politics" can be a drain on local government. Whether a department head answers a phone call or takes a meeting should not be a matter of friendship. If an official request policy can indeed ensure newer officials get the same amount of face time as those who are well seasoned at being in the right rooms, then it really doesn't sound so oppressive.
Besides, lawmakers have teams of direct reports who already manage their calendar and could easily fill out the form for them. No doubt Restler, for example, who called the form "inane" and a "dangerous politicization of city government to prevent city agencies from doing their job based on the political whims of the mayor," will not personally lose valuable working hours slaving over a Google doc.
Not every process that can be updated should be, of course. If the form is indeed used for gatekeeping by the administration or as a measure to slow down city agencies' responses to requests from elected officials, that would be a major issue, and officials should work swiftly to have it scrapped.
But just because something has always been done a certain way doesn't mean it always has to be. Attempting to make the meeting process more democratic seems like a noble task. City officials could benefit from giving the new process a fair shot to see if it achieves its intended benefits before dismissing it entirely.
(Bloomberg) -- UnitedHealth Group Inc. Chief Executive Officer Andrew Witty told lawmakers his company is still trying to determine why its computer systems were left vulnerable to hackers who perpetrated a devastating cyberattack.
Lawmakers zeroed in on lax defenses during more than two hours of questioning by the Senate Finance Committee, in the first of two congressional hearings about the breach on Wednesday. The intruders got in through a server that didn’t have multifactor authentication — a basic cybersecurity measure used on consumer bank accounts — and got access to a hoard of health and personal data. Witty said the trove might cover one-third of Americans.
“We’re trying to dig through exactly why that server had not been
protected,” Witty told lawmakers. “I’m as frustrated as anybody about that fact.”
Some lawmakers said the company had neglected basic safeguards and failed both to prevent the attack and recover from it, with backup systems that were also vulnerable. “This company flunked both,” said Senator Ron Wyden, the Oregon Democrat who chairs the Finance Committee.
The largest U.S. health insurer faced aggressive questions from some
lawmakers over the February hacking incident, including concerns about whether its vast reach into myriad health care operations concentrated risk that cybercriminals exploited. The hack snarled billions of dollars in payments for doctors and hospitals.
The ransomware strike that wrecked systems at UnitedHealth’s Change Healthcare subsidiary will likely be the largest health care data breach in the U.S. to date, the company said. It’s also among the most costly hacks ever, denting UnitedHealth’s profit by as much as $1.6 billion this year.
Witty was the sole witness to appear in the hearings, which also included an afternoon session with a subcommittee of the House Energy and Commerce Committee. Lawmakers from both parties expressed concern about UnitedHealth’s size at a separate House panel two weeks ago.
Senator Elizabeth Warren, the Massachusetts Democrat, called on
regulators to break up the company during the Wednesday hearing. Even conservatives expressed concern about its corporate power.
“Is the dominant role of United too dominant, because it’s into everything, and messing up United messes up everybody?” said Senator Bill Cassidy, a Republican from Louisiana.
Witty said Change Healthcare’s footprint was the same as it was before
UnitedHealth acquired it in 2022. The company UnitedHealth bought for almost $8 billion ran on legacy technology, he said, with some systems 40 years old. “We’ve been working to improve those,” he said.
UnitedHealth’s shares closed almost unchanged Wednesday, a sign that Witty’s grilling in Washington had little impact for investors.
Lax Defense
Wyden said the committee is drafting legislation in response to the attack. He called again for standards for the industry, and said larger companies would have to meet tougher standards. “The bigger the company the more significant your responsibilities,” he said.
UnitedHealth faces constant attacks from intruders trying to crack digital defenses, with more than 450,000 attempts a year, according to Witty’s prepared testimony released ahead of the hearings. The exact nature of those attempts wasn’t immediately clear.
Despite the persistent threat, he said the intruders gained entry to Change Healthcare’s systems through a Citrix remote access portal that wasn’t protected by multifactor authentication, a common cyberdefense meant to thwart hackers by requiring more than a password to verify that a login is legitimate.
Once they broke into the system on Feb. 12, attackers claiming to be the notorious cybercrime group BlackCat pilfered data undetected for more than a week. They deployed ransomware nine days later. Witty said he was at a board meeting when he learned of the attack on Feb. 21.
Wyden questioned whether UnitedHealth knew how much personal data of its users was stolen. “You don’t have the logs to show what data walked out the door,” he said.
Witty estimated that the data breach could affect about one-third of all Americans — which would be more than 100 million people — though he said the number was uncertain. Facing a House panel in the afternoon, he said he couldn’t guarantee that hackers hadn’t copied stolen the data to distribute online.
The full extent of that breach will take months to assess, according to
UnitedHealth, leaving Americans in the dark about what private medical data may have been exposed. The company has set up a site to offer credit monitoring and other help.
Witty said he decided to pay a ransom to protect patient data, “one of the hardest decisions I’ve ever had to make.” He confirmed that the payment was $22 million, a figure that has previously been reported based on an analysis of cryptocurrency payments.
He also said the attackers locked up the company’s backup systems,
delaying how long it took to restore Change Healthcare’s services.
UnitedHealth rebuilt much of the infrastructure from scratch on cloud-based systems, he said.
He told the committee that UnitedHealth’s response was “swift and forceful,” by disconnecting Change’s systems from the rest of the health care world. While that was “extremely disruptive,” he said it stopped the damage from spreading more widely.
The company said many systems are back online. It has advanced more than $6.5 billion in payments and interest-free loans to medical providers facing cash-flow interruptions.
Witty also said the company supports minimum security standards for
health care companies and improvements to the U.S.’s cyber defenses,
including standardized reporting of cybersecurity events.
Tri-state area hospitals performed solidly in March and are showing sustained signs of improvement over the same period of 2023, according to the latest data from research firm Kaufman Hall. However, they still lag behind the country on the whole.
The data, released Thursday, shows that local facilities’ median operating margins declined by 5% year-over-year. However, that decrease was offset by improvements across their patient volume and revenue metrics. Discharges increased by 5% over 2023, while patient days and emergency department visits both grew by nearly 4%. The number of observation days as a percentage of patient days decreased by 26%, which could signal a positive change, as hospitals are typically reimbursed less for observation stays than inpatient treatment.
Net operating revenues jumped by 8%, the data illustrates, while inpatient and outpatient revenue grew by 8% and 3% over 2023. Bad debt and charity, or a measure of whether a hospital can obtain reimbursement for care it provided, rose by 29% over last year.
Erik Swanson, the senior vice president of data and analytics at the Chicago-based firm, said the improvements could be a sign that more local patients are electing to receive health care than they did in the years immediately following the pandemic. New York’s population density means hospitals can see a significant bump in performance when patients go back to their doctors, he said.
“Knowing where the position was of New York, the fact that we are starting to see some of these volumes recover generally probably indicates that patients are choosing to resume care in more meaningful ways than they have in the past,” he said.
However, Swanson noted, local facilities still lag behind the rest of the country, a trend that has persisted. According to Kaufman Hall, hospitals in other regions of the country posted higher year-over-year operating margin improvements. The South, for example, saw a 5% increase in median operating margins between 2023 and 2024, while margins grew by 8% in the Midwest.
Local hospitals’ spending patterns also reflect the idea that the tri-state area has been particularly hard-hit by the impact of the pandemic, compared to other regions, and the high costs of labor and providing care. The vast majority of expense metrics all average higher than they did in 2023. Total expenses are up 6%; total non-labor costs saw the largest increase at 7%. Labor expenses grew by 5% since 2023, a challenge that lingers as hospitals continue to enter into new contracts with employees and make more hires.
The differences between 2024 and 2021 are even more pronounced: hospitals’ total expenses were 20% higher than the same period in 2021. Total labor and non-labor costs were both 21% higher.
However, Swanson said there is one silver lining in the data which hints that local facilities could start to come in line with national trends. The month-over-month data could indicate that hospitals are becoming more efficient with their spending, he said.
He noted that the hospitals’ total expenses per adjusted discharge dropped by 2%, and labor costs per discharge declined by about 1%, in March compared to February.
“The hospitals in New York probably were set up, along with their expense base, to be able to handle more volume than they were previously seeing,” Swanson added. “And as such as the volumes began to come in they didn't necessarily have to flex up staffing to meet that demand.”
Local hospitals’ median operating margins also bounced back to 2% in March, he added, a 34% increase from the challenging month of February. This statistic, along with improved revenues and patient volumes, bucked the national trend of sluggish volumes and revenues for the month, he said.
Swanson also predicted that hospitals will continue to improve their volume and cost ratios in the coming months–and that more patients will seek care in the summer. This will help area facilities perform at a more similar level to their counterparts in other regions as 2024 progresses, he said.
Kaufman Hall publishes national hospital flash reports each month.
NYU Langone is asking state officials to greenlight the completion of its merger with Long Island Community Hospital in Suffolk County, finalizing a deal that’s been in the works for the last three years.
The Midtown-based health system has operated as the parent company of Long Island Community Hospital since 2021, when state regulators gave it the nod to start the acquisition process. Now it's asking regulators to seal the deal by approving a full asset merger – a decision that would halt operations of the East Patchogue hospital as a separate entity, according to a certificate-of-need application submitted late last month.
If the project gets approved by the Public Health and Health Planning Council, a regulatory body that evaluates health care mergers and capital projects, Long Island Community Hospital would get a new name and become a division of the NYU Langone hospital system.
The health system expects the full merger with Long Island Community Hospital to occur in about a year, said Steve Ritea, spokesman for NYU.
NYU first proposed to merge with Long Island Community Center in July of 2021 to help the hospital remain financially viable, stating in its application that the 306-bed facility lacked “adequate cash flow to make significant investments in its campus and ambulatory programs.”
Since the approval, the merger has rolled out in phases. During the first phase, Long Island Community Hospital operated as a separate corporation but was able to draw on NYU’s resources, Ritea said.
NYU pledged to invest $100 million into Long Island Community Hospital to upgrade its electronic medical records systems, improve infrastructure and grow the hospital’s ambulatory footprint, Dr. Andrew Brotman, chief clinical officer and vice dean for clinical affairs and strategy, previously told Crain’s.
NYU Langone did not provide additional details about how much it has invested in Long Island Community Hospital since the start of the merger, nor the additional costs of the full asset merger.
The acquisition of Long Island Community Hospital is NYU’s latest expansion. The health system acquired NYU Langone–Brooklyn, formerly known as Lutheran Medical Center, in 2015 and NYU Langone–Long Island, formerly Winthrop Hospital, in 2019.
NYU Langone has six inpatient locations and more than 350 outpatient locations in the New York City region. The health system reported $2.4 billion in operating revenues in the most recent quarter.
New York state will get a cut of a $270 million multistate settlement with opioid maker Amneal Pharmaceuticals over allegations that the company fueled the overdose epidemic, the attorney general’s office said Friday.
Attorney General Letitia James and attorneys general from five other states negotiated a preliminary settlement with Amneal Pharmaceuticals for fueling an overdose crisis that killed 6,000 New Yorkers in 2021, the latest year that data is available. The attorneys general alleged in a lawsuit that Amneal failed to monitor and report suspicious orders placed by its customers, as it is required to under state law.
The Bridgewater, New Jersey-based drug company was the largest manufacturer of generic opioids between 2006 and 2019, selling nearly 9 billion pills, according to James.
Although the agreement has been announced, many details – including how much money New York will receive – have yet to be hammered out, said Alexis Richards, a spokeswoman from the attorney general’s office.
But the preliminary deal spells out a 10-year timeline in which Amneal will pay $92.5 million in cash and distribute $180 million-worth of the overdose reversal medication naloxone to states and local governments, James said.
The agreement was negotiated with attorneys general from California, Delaware, Tennessee, Utah and Virginia.
The funds from the Amneal agreement are the latest to flow to New York’s pot of opioid settlement funds. James has secured $2.7 billion in settlements from lawsuits against opioid manufacturers and distributors such as Publicis Health, Hikma Pharmaceuticals, Johnson & Johnson and Mallinckrodt. The funds will flow to New York over the next two decades to pay for initiatives around harm reduction and substance use disorder treatment.