ALBANY — The fragile condition of the hospital industry across upstate New York was laid bare the other day at a hearing examining the health care portion of the state budget.

The overall focus of the day was elsewhere — with the biggest bone of contention concerning Gov. Andrew Cuomo’s plan to find $2.5 billion in savings from the Medicaid program as part of an overall effort to close a $6.1 billion budget hole.

All the big players in the health care industry were represented at the hearing

So, as is often the case, the rural regions of upstate did not get much attention — at least not until a fellow named Gary Fitzgerald parked himself in the witness chair.

Fitzgerald is the chief executive officer of Iroquois Healthcare Alliance, and the point person for the Upstate New York Heathcare Coalition, representing more than 60 hospitals in 45 upstate counties.

He voiced major concerns about the possibility that “unilateral cuts” will be felt across the healthcare industry if the Medicaid redesign team does not achieve the savings outlined by the governor.

But he also made many points that summed up the state of affairs faced by upstate hospitals.

There is an acute nursing shortage, with some 2,000 unfilled openings for registered nurses throughout the region, he said. There is also a shortage of physicians and shortages as well in “every worker area,” he said.

Some 85 percent of upstate hospitals operated at a loss in 2017, the most recent year for which statistics were available, he said. The average margin was minus-4.3 percent.

Compared to those treated at downstate hospitals, the patients at upstate hospitals are older and sicker, Fitzgerald said. More of these patients rely on Medicare and Medicaid, and the Medicaid rate, on average, only covers 69 percent of costs.

If struggling hospitals are forced to convert to emergency room operations, as has already happened in some towns, the doctors assigned to them will likely re-locate, Fitzgerald said. Nursing homes attached to those hospitals could also close.

But Fitzgerald had more on his mind than simply providing a worrisome picture. He also talked about strategies and solutions, ones that would not only benefit the hospitals, but the upstate region itself.

For instance, he suggested, the Cuomo administration ought to consider channeling some of the millions of dollars in economic development funds it has spread across the state to upstate hospitals that could use the money for staff training, workforce development and loans.

“If you want to talk about business development, what business in their right mind would ever want to come to a community that just closed its hospital, and where it’s very difficult to get a doctors appointment in that community?” Fitzgerald asked.

Then he added: “We cannot break through the economic development funding sources to explain that without healthcare systems in upstate New York you will not get economic development in those communities.”

No one quarreled with that point.

Fitzgerald went on to point out that in 2017 lawmakers enacted legislation to create the Rural Health Council, to be comprised of providers and other stakeholders in the industry.

While that happened nearly three years ago, not only has the council never been convened but no appointments have been made to it, even though Cuomo signed the legislation, Fitzgerald said.

He also mentioned the proposed legislation to require nurse-patient staffing rations, a measure pushed by the New York Nurses Association, a union, could not be enforced at many upstate hospitals because of the current staffing shortages and weak financial positions. If the hospitals were forced to comply with such a mandate, some would just close their doors, he said.

Fitzgerald advised Sen. Gustavo Rivera, D-the Bronx, chairman of the Senate Heath Committee, that he’d be more than willing to meet with representatives of Cuomo’s Medicaid redesign team, should he be invited in for a sitdown.

Fitzgerald made his points concisely, and they stuck with me so that as I left the hearing I wondered: Will these same lawmakers remember at crunch time in the budget season what he had to say about the need for nurturing upstate hospitals?

They are going to act on the governor’s request to extend more than $400 million in tax credits to the film and television industry.

They are going to act on legislation that would allow Cuomo to control hundreds of millions of dollars in economic development funds.

What will they do for the upstate hospitals and other heath care facilities in the region — a region that already has far fewer doctors per capita than the downstate region of New York?

Will they see the connection between healthy hospitals and a healthy upstate economy, as outlined by Gary Fitzgerald?

Joe Mahoney covers the New York Statehouse for CNHI’s newspapers and websites. Reach him at jmahoney@cnhi.com