When the pain in his groin was too great to bear, Ralph Hutchins, who works as a mover, headed to the crowded emergency room at the nearest hospital one recent Tuesday, his life at risk. Tanya Boynton, a mother of four who works 12-hour shifts, hobbled into another emergency room from a homeless shelter, afraid illness would end her job.
They needed care in the heart of Brooklyn, not far from the world’s richest concentration of premier hospitals. Only a few private hospitals have survived in neighborhoods like Bedford-Stuyvesant, Brownsville and Bushwick to serve poor patients like them. Now all are in such dire financial shape that a small group of veteran health care planners appointed by Gov. Andrew M. Cuomo is debating last-ditch measures to save them.
For decades, the fallback solution in American cities has been to close such hospitals.
But one of the actions being considered by the group may be even more radical: expunge the hospitals’ debt of more than $1 billion, partly at taxpayer expense, and then let large for-profit companies take over the facilities and restructure patients’ care. Experts say what ultimately becomes of the hospitals could make them a model, or a disastrous experiment, in the delivery of health care to the poor.
The proposals are still being drafted but are already generating concern among public health advocates, who worry that the changes would shred a frayed medical safety net and send the poorest and uninsured patients to other overwhelmed hospitals, especially to three public hospitals that are at capacity and facing new budget cuts.
Proponents say this fear is unfounded. But it runs deep in New York State, which added a right to health care to its constitution during the Great Depression, and is the only state that still prevents large companies and their stockholders from owning hospitals.
“If we don’t figure out a way to redesign the system, we’re going to have free-fall bankruptcies not only in Brooklyn, but all over the state,” said Stephen Berger, chairman of Mr. Cuomo’s Brooklyn Work Group. Its recommendations are due this month.
Brooklyn shows the acute stage of a problem that has vexed the nation for years: how to sustain delivery of major medical care to the poor. After the crack and H.I.V. epidemics of the 1980s, either shrinking hospitals with empty beds or letting them fail was seen as a way to make the system more efficient. But as big cities lost more than half their hospitals, closings were concentrated in places like central Brooklyn, where the bed-to-population ratio is now below state and national averages and busy hospitals are struggling financially despite high occupancy rates.
Kings County Hospital Center, Woodhull Medical and Mental Health Center and the State University of New York Downstate Medical Center, the three public hospitals in the area, could shoot up to as much as 130 percent of capacity and face a third more emergency room visits if even one or two of the most vulnerable private hospitals closed, according to a study submitted to the Berger group by the union representing interns and residents at public and private hospitals.
Alan Aviles, the president of New York City’s public hospital system, said it was making contingency plans for such a flood but could not go it alone, particularly since the collapse of the city’s Roman Catholic hospital network.
“We have to make sure that we still have voluntary safety net hospitals that are capable of sharing in that effort,” he said, noting that city hospitals already provided 75 percent of all outpatient care to the uninsured.
To stay healthy, experts say, even nonprofit private hospitals need a 3 percent profit margin. Only two of Brooklyn’s 10 private hospitals are doing that well, and of the five considered endangered — Interfaith Medical Center, Wyckoff Heights Medical Center, Brookdale University Hospital and Medical Center, Kingsbrook Jewish Medical Center and Brooklyn Hospital Center — some are hemorrhaging money.
Questions about mismanagement hang over some of these institutions, but analysts agree on the basic problem: Most of their patients rely on Medicaid, the government insurance program for the needy, which has been repeatedly cut as eligibility expanded. There is no confidence that the national health care overhaul will help. Indeed, federal cuts expected through 2013 will disproportionately hurt the same hospitals. In neighborhoods with mainly black and Latino residents, in a borough of 2.5 million where more than one in five residents live below the poverty line and two in five receive Medicaid, the five endangered hospitals account for 83,000 admissions, 325,000 emergency room visits and 760,000 clinic visits a year.
The case of Mr. Hutchins, who showed up at Wyckoff, illustrates the strain. It was the third time in two months he sought help, he said. This time, at his insistence, the hospital admitted him.
Surgery revealed a strangulated hernia so far gone that cutting out life-threatening infected tissue left an open wound, he said.
Cost efficiency demanded speedy discharge; last year, Medicaid cut by 31 percent what it would pay for a case like his. But before Mr. Hutchins could be released, the hospital had to get him a portable wound pump.
At hospitals that pay suppliers promptly, administrators say, the device typically gets same-day delivery. At Wyckoff, it took a week.
Wyckoff’s general counsel, David Hoffman, said the hospital was like a homeowner with an underwater mortgage. Its buildings are worth a fraction of the $88 million it owes on a $140 million state loan, used in 1994 to rebuild. Its reserves are gone.
Such hospitals have not benefited from recent gentrification in Brooklyn. Affluent newcomers typically keep ties with their Manhattan doctors, who send them to hospitals there with the prestige to get top dollar from private insurance plans.
In 1980, Brooklyn had 26 hospitals; now it has 15, and 41 percent fewer acute-care beds — 2.3 beds per 1,000 residents, compared with Manhattan’s 4.7, the state’s 3.1 and the nation’s 2.6.
That pattern has played out nationwide, said Alan Sager, a professor of health policy and management at Boston University who has analyzed decades of hospital closings in 52 cities.
Professor Sager found that what best predicted that a hospital would be closed was not inefficiency, but location in a minority neighborhood, and for-profit hospitals were likeliest to close.
Proposals to save the Brooklyn survivors include a federal waiver that could redirect state Medicaid savings to so-called safety net hospitals, and a push for additional mergers. Another idea is making one or more of the hospitals a free-standing emergency department, a concept being tried at the defunct St. Vincent’s Hospital in Greenwich Village.
The proposal requiring the most salesmanship, and possibly a change in law, would leave taxpayers, bondholders and other creditors to absorb the hospitals’ net debt and then invite investors into a reformulated health care network.
Steven Moore, an executive with PricewaterhouseCoopers, the consultants invited by Mr. Berger to sketch out this proposal, likened Brooklyn’s indebted hospitals to banks with toxic assets, and suggested a bailout first. “Our premise is you have to design a system that will attract private capital,” Mr. Moore said. “Private capital is more efficient, it demands productivity, it demands creativity, it demands innovation.”
It also demands profits. Many experts doubted the proposal’s contention that 20 percent to 30 percent waste could be safely carved from Medicaid spending in Brooklyn to yield a reliable return of about 7 percent.
At the Greater New York Hospital Association, the lobbying group for hospitals, board members worried about people without insurance, particularly the city’s many illegal immigrants. Getting rid of toxic assets — hospitals’ debt — would not solve the problem of patient mix and revenue, said Kathleen Shure, an association executive, and “the board fears that it will end up in for-profit entities getting rid of ‘toxic populations.’ ”
Mr. Berger, an investment banker and veteran of health commissions, is impatient with such objections. “Health care is not hospitals,” he said. “Health care is an integrated system, a network,” one that requires new patterns of investment.
By law, hospitals must provide emergency care. But it is unclear what that might mean in a reformulated for-profit system, particularly for people in pain who damage the bottom line, like Ms. Boynton, 40, who limped into Interfaith with what turned out to be an acute attack of gout the same day Mr. Hutchins went to Wyckoff.
She would have preferred the Bronx clinic in her Medicaid managed-care plan, but her family had been evicted from its Bronx apartment after the landlord failed to make repairs required for a housing subsidy. At Interfaith, she got a three-day prescription that put her back on her feet and commuting, from a Brooklyn homeless shelter to her $300-a-week job at a home goods store on the Upper West Side of Manhattan.
Mr. Hutchins, 50, now discharged, is also on the mend. The hospital’s prognosis is more guarded.
“We stay open at the grace and generosity of our vendors,” said Mr. Hoffman, Wyckoff’s general counsel. “They know it will eventually get better, because we have to have hospitals. Otherwise, we’ll have sick and dying people lying in the streets, and nobody wants that.”
They needed care in the heart of Brooklyn, not far from the world’s richest concentration of premier hospitals. Only a few private hospitals have survived in neighborhoods like Bedford-Stuyvesant, Brownsville and Bushwick to serve poor patients like them. Now all are in such dire financial shape that a small group of veteran health care planners appointed by Gov. Andrew M. Cuomo is debating last-ditch measures to save them.
For decades, the fallback solution in American cities has been to close such hospitals.
But one of the actions being considered by the group may be even more radical: expunge the hospitals’ debt of more than $1 billion, partly at taxpayer expense, and then let large for-profit companies take over the facilities and restructure patients’ care. Experts say what ultimately becomes of the hospitals could make them a model, or a disastrous experiment, in the delivery of health care to the poor.
The proposals are still being drafted but are already generating concern among public health advocates, who worry that the changes would shred a frayed medical safety net and send the poorest and uninsured patients to other overwhelmed hospitals, especially to three public hospitals that are at capacity and facing new budget cuts.
Proponents say this fear is unfounded. But it runs deep in New York State, which added a right to health care to its constitution during the Great Depression, and is the only state that still prevents large companies and their stockholders from owning hospitals.
“If we don’t figure out a way to redesign the system, we’re going to have free-fall bankruptcies not only in Brooklyn, but all over the state,” said Stephen Berger, chairman of Mr. Cuomo’s Brooklyn Work Group. Its recommendations are due this month.
Brooklyn shows the acute stage of a problem that has vexed the nation for years: how to sustain delivery of major medical care to the poor. After the crack and H.I.V. epidemics of the 1980s, either shrinking hospitals with empty beds or letting them fail was seen as a way to make the system more efficient. But as big cities lost more than half their hospitals, closings were concentrated in places like central Brooklyn, where the bed-to-population ratio is now below state and national averages and busy hospitals are struggling financially despite high occupancy rates.
Kings County Hospital Center, Woodhull Medical and Mental Health Center and the State University of New York Downstate Medical Center, the three public hospitals in the area, could shoot up to as much as 130 percent of capacity and face a third more emergency room visits if even one or two of the most vulnerable private hospitals closed, according to a study submitted to the Berger group by the union representing interns and residents at public and private hospitals.
Alan Aviles, the president of New York City’s public hospital system, said it was making contingency plans for such a flood but could not go it alone, particularly since the collapse of the city’s Roman Catholic hospital network.
“We have to make sure that we still have voluntary safety net hospitals that are capable of sharing in that effort,” he said, noting that city hospitals already provided 75 percent of all outpatient care to the uninsured.
To stay healthy, experts say, even nonprofit private hospitals need a 3 percent profit margin. Only two of Brooklyn’s 10 private hospitals are doing that well, and of the five considered endangered — Interfaith Medical Center, Wyckoff Heights Medical Center, Brookdale University Hospital and Medical Center, Kingsbrook Jewish Medical Center and Brooklyn Hospital Center — some are hemorrhaging money.
Questions about mismanagement hang over some of these institutions, but analysts agree on the basic problem: Most of their patients rely on Medicaid, the government insurance program for the needy, which has been repeatedly cut as eligibility expanded. There is no confidence that the national health care overhaul will help. Indeed, federal cuts expected through 2013 will disproportionately hurt the same hospitals. In neighborhoods with mainly black and Latino residents, in a borough of 2.5 million where more than one in five residents live below the poverty line and two in five receive Medicaid, the five endangered hospitals account for 83,000 admissions, 325,000 emergency room visits and 760,000 clinic visits a year.
The case of Mr. Hutchins, who showed up at Wyckoff, illustrates the strain. It was the third time in two months he sought help, he said. This time, at his insistence, the hospital admitted him.
Surgery revealed a strangulated hernia so far gone that cutting out life-threatening infected tissue left an open wound, he said.
Cost efficiency demanded speedy discharge; last year, Medicaid cut by 31 percent what it would pay for a case like his. But before Mr. Hutchins could be released, the hospital had to get him a portable wound pump.
At hospitals that pay suppliers promptly, administrators say, the device typically gets same-day delivery. At Wyckoff, it took a week.
Wyckoff’s general counsel, David Hoffman, said the hospital was like a homeowner with an underwater mortgage. Its buildings are worth a fraction of the $88 million it owes on a $140 million state loan, used in 1994 to rebuild. Its reserves are gone.
Such hospitals have not benefited from recent gentrification in Brooklyn. Affluent newcomers typically keep ties with their Manhattan doctors, who send them to hospitals there with the prestige to get top dollar from private insurance plans.
In 1980, Brooklyn had 26 hospitals; now it has 15, and 41 percent fewer acute-care beds — 2.3 beds per 1,000 residents, compared with Manhattan’s 4.7, the state’s 3.1 and the nation’s 2.6.
That pattern has played out nationwide, said Alan Sager, a professor of health policy and management at Boston University who has analyzed decades of hospital closings in 52 cities.
Professor Sager found that what best predicted that a hospital would be closed was not inefficiency, but location in a minority neighborhood, and for-profit hospitals were likeliest to close.
Proposals to save the Brooklyn survivors include a federal waiver that could redirect state Medicaid savings to so-called safety net hospitals, and a push for additional mergers. Another idea is making one or more of the hospitals a free-standing emergency department, a concept being tried at the defunct St. Vincent’s Hospital in Greenwich Village.
The proposal requiring the most salesmanship, and possibly a change in law, would leave taxpayers, bondholders and other creditors to absorb the hospitals’ net debt and then invite investors into a reformulated health care network.
Steven Moore, an executive with PricewaterhouseCoopers, the consultants invited by Mr. Berger to sketch out this proposal, likened Brooklyn’s indebted hospitals to banks with toxic assets, and suggested a bailout first. “Our premise is you have to design a system that will attract private capital,” Mr. Moore said. “Private capital is more efficient, it demands productivity, it demands creativity, it demands innovation.”
It also demands profits. Many experts doubted the proposal’s contention that 20 percent to 30 percent waste could be safely carved from Medicaid spending in Brooklyn to yield a reliable return of about 7 percent.
At the Greater New York Hospital Association, the lobbying group for hospitals, board members worried about people without insurance, particularly the city’s many illegal immigrants. Getting rid of toxic assets — hospitals’ debt — would not solve the problem of patient mix and revenue, said Kathleen Shure, an association executive, and “the board fears that it will end up in for-profit entities getting rid of ‘toxic populations.’ ”
Mr. Berger, an investment banker and veteran of health commissions, is impatient with such objections. “Health care is not hospitals,” he said. “Health care is an integrated system, a network,” one that requires new patterns of investment.
By law, hospitals must provide emergency care. But it is unclear what that might mean in a reformulated for-profit system, particularly for people in pain who damage the bottom line, like Ms. Boynton, 40, who limped into Interfaith with what turned out to be an acute attack of gout the same day Mr. Hutchins went to Wyckoff.
She would have preferred the Bronx clinic in her Medicaid managed-care plan, but her family had been evicted from its Bronx apartment after the landlord failed to make repairs required for a housing subsidy. At Interfaith, she got a three-day prescription that put her back on her feet and commuting, from a Brooklyn homeless shelter to her $300-a-week job at a home goods store on the Upper West Side of Manhattan.
Mr. Hutchins, 50, now discharged, is also on the mend. The hospital’s prognosis is more guarded.
“We stay open at the grace and generosity of our vendors,” said Mr. Hoffman, Wyckoff’s general counsel. “They know it will eventually get better, because we have to have hospitals. Otherwise, we’ll have sick and dying people lying in the streets, and nobody wants that.”
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