Fw: 8 city hospitals are candidates for shutdown

 

8 city hospitals are candidates for shutdown

Consensus builds for consolidation

By Gale Scott
Published on February 21, 2005

Eight New York City hospitals are emerging as likely targets for closing, as the consensus grows that the state has too many hospitals.

Area hospital executives and consultants agree that the facilities ripe for shuttering include Interfaith Medical Center, Peninsula Hospital Center and Victory Memorial Hospital in Brooklyn; Our Lady of Mercy Medical Center in the Bronx; Cabrini Medical Center and St. Vincent's Midtown Hospital (the former St. Clare's) in Manhattan; and Mary Immaculate Hospital and Parkway Hospital in Queens.

"Everyone's got a list of which hospitals could go," says Francis Serbaroli, a partner and health care specialist at law firm Cadwalader Wickersham & Taft.

The likelihood that some of these hospitals will close in the near future is growing, now that the Greater New York Hospital Association, the 1199 SEIU health care workers union and the Hospital Association of New York State have all publicly agreed that closings are necessary.

With Gov. George Pataki determined to rein in skyrocketing state Medicaid costs, and scores of hospitals already losing money or barely staying alive, the hospital groups and union say they are eager to find a way to close some facilities to make limited resources go further.

Simply losing money, as 53% of the state's hospitals did in 2003, is not criterion enough to make the hit list, because some money-losing hospitals are in areas that desperately need their services. In all eight cases, it's believed that the surplus hospitals have little to offer patients that couldn't be provided at another nearby hospital. By continuing to operate, these hospitals siphon off patients from their competitors.

Niche services

For example, under new ownership, Parkway Hospital expects to make money by offering gastric bypass surgery and lucrative wound care treatments using a hyperbaric chamber. At the same time, the hospital is abandoning less profitable services such as obstetrics and pediatrics--leaving those essential services to nearby hospitals, including North Shore-LIJ's Forest Hills Hospital.

The Saint Vincent Catholic Medical Centers system is trying a similar approach in turning its Hell's Kitchen affiliate, formerly known as St. Clare's, into a high-tech heart disease center. Critics say it won't work.

"There's St. Luke's-Roosevelt doing that a few blocks north, St. Vincent's Hospital to the south, and Beth Israel Medical Center, and other centers all over Manhattan. It's hard to see why there's a need," grumbled a competitor's chief executive, asking not to be named.

However, most of the hospitals on the hit list insist they don't belong there, citing reasons like neighborhood growth, new niche strategies, or a history of serving the poor.

Yet most in the industry agree that some hospitals need to go, although they differ on how to reach that goal. One argument favors forcing some closings. Another backs a more free-market approach by giving hospital systems financial resources to help them restructure, downsize or close down on their own.

A recent report from the governor's task force on hospitals and health care, headed by Stephen Berger, calls for creating a 19-member commission to set criteria for deciding which hospitals should close, then coming up with a strategy that would permit the state to revoke their licenses to operate.

Base-closing advocates

The GNYHA and the union say they believe such a "base-closing commission" could work, but differ from Mr. Berger's plan by calling for unions, the hospitals, the public and legislators to have far more say in deliberations.

But HANYS disagrees with this approach. Its president, Daniel Sisto, says that board members, including 20 from New York City, voted overwhelmingly at a recent meeting to reject the idea of having a commission decide their fates.

"We don't want 19 political appointees with their own agendas making these decisions," Mr. Sisto says, adding that hospital systems would close marginal facilities on their own if the state would cover their outstanding debt.

Mr. Serbaroli predicts that with a commission deciding which facilities to close, unionists on the panel would favor closing nonunion hospitals, and big hospitals' representatives would favor closing any small competitors.

"No one should tell a hospital that it should close if it's making money," says Mr. Serbaroli.