The NewStandard ceased publishing on April 27, 2007.

Closures Loom for Community-Focused Hospitals in New York

by Michelle Chen

Healthcare advocates say a state commission's plan to consolidate hospitals is wrong-headed, glossing over the real problem and real reforms.

New York City; Dec. 8, 2006 – The narrow hallways and drab plaster walls of Manhattan’s Cabrini Medical Center don’t suggest the cutting edge of medical science. In a city peppered with bigger, more-technologically advanced hospitals, Cabrini sticks modestly to what it knows best.

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"We are not trying to be a trauma center at all. We are not trying to be a signature hospital at all," said Lolita Compas, a registered nurse and local resident who has both provided and received care at Cabrini. The facility’s niche, she said, is "providing healthcare to people from all walks of life, many of them minority patients." The hospital houses bilingual staff and programs for special-needs groups, ranging from AIDS survivors, to psychiatric patients, to the home-bound elderly.

But some say places like Cabrini are a thing of the past. According to a commission launched by New York Governor George Pataki, Cabrini and many other New York hospitals are becoming a liability, rather than an asset. Suffering financial strains and low occupancy rates, the panel argues, the hospitals are saddled with "overcapacity" – an excess of beds and buildings that purportedly lead to high costs and inefficiency.

In response, the so-called Berger Commission – nicknamed after its chairman, investment banker Stephen Berger – is proposing to reshape the state’s hospital infrastructure into a more nimble, financially viable system.

“It isn't enough to close places. You also have to invest in creating the capacity for people to be served in community.” -- Susan Dooha, Center for Independence of the Disabled of New York.

The plan, released last week, will go to the state legislature for an up-or-down vote this month.

Led by healthcare executives, hospital board members and other public figures, the Berger Commission wants to wipe out 4,200 hospital beds across the state – about 7 percent of total capacity. Some 3,000 nursing-home beds would also vanish. Forty-eight hospitals would be restructured or merged, and nine hospitals – five in New York City including Cabrini – would be formally shuttered.

The Berger Commission claims the plan will save about $1.5 billion per year over the next decade, through reduced costs and reinvestment of savings in healthcare.

Dozens of healthcare advocates, unions, and community groups have formed the Save our Safety Net coalition (SOS), a political counterweight to the 54-member commission, arguing the panel did not sufficiently incorporate public input.

The Berger Commission did conduct nineteen regional hearings throughout the state, but the hearing process ended before the recommendations were presented to the legislature. SOS is now calling for a formal public review of the impact of restructuring on the affected communities.

"You don't look at hospitals and decide which ones to close," said Judy Wessler of the advocacy group Commission on the Public’s Health System. "You look at a community health-needs assessment, and you look at where people need care. That’s not what happened."

‘Rightsizing’

Activists say chronic inequity, not unused beds, is the real healthcare crisis.

The Berger Commission’s plan is not the first effort to downsize hospitals as a way to curb healthcare costs. Yet a recent analysis by Boston University’s School of Public Health suggests that across the country, initiatives to "rightsize" hospitals have fallen flat at the public’s expense.

In their study of hospital closures in New York and other states, researchers Alan Sager and Deborah Socolar found scant evidence linking hospital capacity and cost-effectiveness. The number of hospital beds per thousand people in the US has tumbled over the last 20 years, while per capita medical costs have risen steadily.

Sager and Socolar concluded that while "the policy of closing hospitals has been held out as a painless, efficient and even noble way to cut hospital costs," it typically fails to produce the promised savings, and might even lead to greater expenses. If humbler, lower-cost hospitals are extinguished, the authors wrote, patients will be forced into larger, often costlier facilities that are left to dominate healthcare system.

Fringes of the safety net

The Berger Commission’s central premise is that traditional inpatient facilities are out of line with changing needs, as healthcare systems across the country move away from hospitalization and toward more-flexible outpatient services.

Announcing the report last week at a press conference, the Berger Commission’s executive director, David Sandman, said a tough process was needed to downsize troubled facilities and redistribute patients and healthcare dollars. Without intervention, he said, ailing institutions could "further destabilize the system and compromise patient care."

But community healthcare advocate Wessler said chronic inequity, not unused beds, is the real healthcare crisis.

The Commission's critics say it skirted systemic, politically tense issues, like reining in insurance-company profits and providing universal health coverage.

"The major problem is the maldistribution of services," she said. "Lots of low-income people… have serious problems in access. There are unbelievable racial and ethnic disparities in both access and outcomes of care. And I don’t see how this report changes or improves any of those."

SOS Co-coordinator Louis Guida said the Berger Commission’s rhetoric could be obscuring evidence of unmet needs. "It’s disingenuous to talk about underutilization," he argued, "when there are almost 3 million uninsured people in the state who don’t have access to health-insurance coverage and therefore may not be able to access the care that they need."

Guida noted that although the report emphasizes that about a third of the state’s licensed hospital beds are unused, legally licensed beds often "only exist on paper": the number of beds actually staffed and funded may be significantly lower and more aligned with the patient pool.

The Berger Commission’s New York City regional advisory committee reported in November that patient occupancy in the city closely matched the availability of actual beds. At peak times, recent occupancy rates reached 98 percent.

Guida added that over-capacity may have little to do with low utilization or a lack of demand for services. Rather, under financial pressure from rising healthcare costs, he said, institutions may be forced to limit staff and services to patients in order to survive.

‘Centers of Excellence’

Chairman Berger said in a press statement that the reforms would help develop "centers of excellence," or cutting-edge flagship hospitals. By contrast, common features of hospitals slated for closure, aside from financial distress, are relatively modest size and scope of services, along with fewer ties to academic institutions.

Belinda Conway, an administrator at Cabrini, suggested the targeted facilities might lack "the political clout [of] the others who survived, who are gaining because of the recommendations of the Berger Commission."

The Commission’s regional advisors for New York City stressed that the area Cabrini serves includes "communities that face serious primary-care shortages for Medicaid and low-income residents… as well as high incidence of mental illness, substance abuse, HIV/AIDS and chronic diseases."

Cabrini, which admits it hemorrhaged about $10 million last year, has already launched its own restructuring initiative. The plan would shed acute-care services to focus on patients with longer-term and chronic needs, and, according to Cabrini, would cost less than the Berger Commission’s closure plan.

But the Berger Commission ultimately recommended that Cabrini close, siphon its patients off to better-established nearby hospitals – and sell its prime Midtown real estate for a projected $130 million.

Making Room

The SOS Coalition agrees that many hospitals are in disrepair. But with one in seven New Yorkers lacking health insurance – about half of them black and Latino – advocates want assurance that restructuring would replace failing institutions with something better.

Denise Soffel, a health-policy analyst with the low-income advocacy organization Community Service Society, said that before trimming "excess" hospital capacity, officials should be wary that in some underserved communities, "by eliminating the only game in town, you may end up doing more damage than you meant to."

Hospitals are also more likely than other, smaller providers to offer disability-related accommodations, like sign-language and wheelchair access, said Susan Dooha of the Center for Independence of the Disabled of New York. While her group wants to see more channels for care outside of hospitals, she said, "it isn't enough to close places. You also have to invest in creating the capacity for people to be served in community."

In New York’s HIV/AIDS community, poor and underserved people "already are facing tremendous challenges around access to care," said Marjorie Hill, CEO of the advocacy organization Gay Men’s Health Crisis. "And so having fewer places to go potentially could have a very negative impact."

Adam Gurvitch, director of health advocacy with the New York Immigration Coalition, said hospitals vary widely in services for immigrants and non-English-speakers. So if a local care provider shuts down, he said, people may be apprehensive about transitioning to an unfamiliar, perhaps less-culturally accommodating facility.

SOS also foresees more healthcare barriers in the federal funds backing the plan, which come through a $1.5 billion Medicaid waiver program. That waiver mandates the state to constrain Medicaid spending, so critics say the restructuring could in effect be tethered to shrinking healthcare for the poor.

Elizabeth Swain of the Community Health Care Association of New York State, which represents publicly funded primary-care providers, said that while the Commission focuses on pockets of "excess" capacity, an overarching problem driving healthcare costs is a lack of capacity in basic primary services. Costs rise, she explained, when poor and uninsured patients resort to emergency rooms for problems that could have been treated earlier, at lower public cost – if primary care were widely accessible.

"We waste so much money in New York on health care at the wrong location, wrong time in people’s lives," she said.

The Commission’s report does touch on reforms that healthcare advocates have pushed for, including expanding coverage for the uninsured, and strengthening the primary-care infrastructure. Nonetheless, those suggestions are open-ended, with no funding commitments. This leaves some concerned that while the state seems poised to downsize hospitals, the political will to create more comprehensive resources is more elusive.

From the SOS coalition’s perspective, the Commission skirted systemic, politically tense issues like reining in insurance-company profits and providing universal health coverage.

"Just to look at bricks and mortar, and bed counts and bottom lines, is just not an effective way to go about making changes in the healthcare system," said Guida. "People [are] looking for simple solutions to a complicated problem."

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The NewStandard ceased publishing on April 27, 2007.


Michelle Chen is a staff journalist.

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