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New York Times February 4, 2005
Hospital's Closing Not Seen as a Public Peril
By LISA W. FODERARO
PORT CHESTER, N.Y. - When New York United Hospital Medical Center announced in December that it planned to close after years of losing money, there was hand-wringing among the hundreds of staff members over their livelihoods and a deep sense of loss among residents of this Westchester County village who had grown up with the hospital.
Hospital's Closing Not Seen as a Public Peril
By LISA W. FODERARO
PORT CHESTER, N.Y. - When New York United Hospital Medical Center announced in December that it planned to close after years of losing money, there was hand-wringing among the hundreds of staff members over their livelihoods and a deep sense of loss among residents of this Westchester County village who had grown up with the hospital.
But while residents and employees may have been surprised by the seeming suddenness of the decision, representatives of the hospital industry were not. For years, hospitals in New York State have complained that they are teetering on the edge financially because of a general decline in hospitalizations combined with sharply rising costs and stagnant reimbursement rates.
And in the last two years, the doom-and-gloom predictions have started to come true, as a dozen hospitals across the state have shut their doors for good.
What has changed, however, is the reaction to the closings. There was a time when even rumblings of a possible hospital closing set off fierce and prolonged community and political battles. But these days, with so many hospitals in financial trouble, the hospital industry, its unions and patient advocates are conceding that shrinkage is not only inevitable but in some cases healthy.
"I get paid dues for every hospital that stays open," said Daniel Sisto, president of the Healthcare Association of New York State, a membership organization representing 550 hospitals, nursing homes and health care agencies. "But the reality is that these closings by and large have not created major havoc in the community."
"What I see happening in many parts of the state is that where we have excess capacity, the boards of trustees have such a vested interest in maintaining their own hospital that there might be two hospitals in a town that only needs one. Both hospitals continue to erode, and they each hang on well past the point that closure by either one would benefit the community."
That is the argument that officials in New York State have long been making. Looking to save money on health care, they have portrayed the network of hospitals stretching from Brooklyn to Buffalo as costly and bloated, with too many beds over all. That assessment was reiterated last fall in a report commissioned by Gov. George E. Pataki urging the state to stop pumping money into failing hospitals. Mr. Pataki plans to name a commission to identify hospitals to close.
But even as hospitals throughout New York State have reported various degrees of distress - a survey in 2003 by a national health industry group and a financial services company found that hospitals in New York State were by far the nation's weakest financially - closings were few through most of the 1980's and 1990's.
So far, United Hospital's demise does not seem likely to plunge Port Chester and the surrounding community into turmoil. Patients have already been making their way to Greenwich Hospital, only three miles northeast, in Connecticut, or to White Plains Hospital Center, just six miles northwest. Many low-income immigrants from Port Chester have for years used a community health center in Rye Brook operated by the Open Door Family Medical Centers. The center plans to move to Port Chester this year.
Many nurses and other professional employees have already been hired by nearby hospitals.
Though the board of United is talking about replacing the hospital with a scaled-down outpatient center with a free-standing emergency room, as well as support services like radiology, respiratory therapy and laboratory testing, its president and chief executive, Philip G. Dionne, acknowledged that it was not at all clear whether such a center would thrive financially or break even.
Hospital employees, people with ties to the hospital and Port Chester officials are still trying to stop the closing - the date is not yet set - arguing that it is vital to the economic and health care interests of the community. But other local officials say that, whatever happens, residents of Port Chester - a gritty village known for its dozens of ethnic restaurants - and those in the more affluent communities of Rye, Rye Brook and Harrison will still have access to hospital care.
"While you hate to see an institution such as this close, from a health care delivery point of view, you may not be losing anything," said Lawrence A. Rand, mayor of the village of Rye Brook, which has a population of 9,600. "You're talking about a community that is blessed with health care services." Nonetheless, he said, he would welcome United's plan to convert to an outpatient center.
What does concern health and hospital officials is the haphazard way these closings are occurring. For one, most hospitals that have closed were in struggling communities with many immigrants. The number of Hispanic residents in Port Chester, which has a population of 28,000, has ballooned in recent years, to 46 percent of the overall population in 2000, from 16 percent in 1980. United Hospital officials say that 49 percent of its patients are on Medicare and 23 percent on Medicaid.
"There are ways of reducing duplication in hospitals and pursuing consolidation, but random failure is not the answer," said Kenneth E. Raske, president of the Greater New York Hospital Association, a trade group that lobbies on behalf of the state's major hospitals.
Even officials at 1199/S.E.I.U., the powerful hospital and health care workers' union, with 250,000 members across New York, are sounding resigned to the idea that some hospitals must close, though concerned about which ones.
"We may need to look at downsizing, but it's not being done in any planned way," said the union's political director, Jennifer Cunningham.
At the same time, however, 1199/S.E.I.U., industry lobbyists and other health care lobbyists are gearing up to vigorously battle Governor Pataki's proposal to rein in the rising cost of Medicaid, the $44.5 billion-a-year health insurance program for the state's low-income residents. Mr. Pataki announced $1 billion in spending cuts for health care and Medicaid, as part of his proposed budget. Union leaders and hospital officials forecast a devastating impact on patient care if the cuts go through.
"We don't have Medicaid nurses, we have nurses, and they take care of everybody," Mr. Raske said.
Jim Tallon, president of the United Hospital Fund of New York, a nonprofit policy group, said those hospitals that served large numbers of uninsured and low-income patients were most vulnerable.
"If you have a concentration of nonpaying patients and you are not simultaneously making it up with paying patients," he said, "there's not the opportunity to make up for your losses."
But with the costs of labor, malpractice insurance and drugs rising, and insurance reimbursement rates lagging, even hospitals in well-off communities are having a hard time, industry representatives said.
"I have 209 members, and two-thirds of them are hanging on the side of the cliff, holding on with their hands," said Mr. Sisto, president of the Healthcare Association. "When one of them falls, we shouldn't ask, why them? We should ask, how many more?"
According to the Healthcare Association, the 209 nonprofit hospitals in New York lost $2 billion collectively in the last six years. The last time the hospitals as a group made money was in 1997, the association said. The hospitals that have closed in recent years include St. Agnes in White Plains, Caledonian campus of Brooklyn Hospital Center, Our Lady of Mercy's Florence D'Urso Pavilion in the Bronx, Bayley Seton on Staten Island, St. Joseph's in Queens, Beth Israel's Singer Division (the former Doctors Hospital) on the Upper East Side and a few upstate.
"An aging hospital that has been drained of financial resources for decades and that isn't in a community with a capacity for philanthrophic giving is more likely to die than one which may have just recently endured losses," Mr. Sisto said.
United has had financial troubles for years. It opened in 1889 in two rented rooms on the second floor of Scott's Dry Goods Store here. Its 14-acre campus, nestled close to both Interstate 287 and Interstate 95, grew to 255 beds and 633 staff members. It posted operating losses every year since 1990, with deficits recently in the $10 million range.
The hospital's creditors, from Con Edison to its food-service provider, were angry with the late payments - some $13.5 million was more than 200 days past due - and demanded cash up front.
The hospital, unable to invest in the latest technology or renovate its aging center, had trouble recruiting new doctors. It managed to raise $4 million for a new emergency room, but the board canceled the plan because the rest of the hospital was so antiquated that it could not support an updated emergency room.
"There's a decline in reimbursements, an increased need for equipment, aging buildings," said Mr. Dionne, United's president, who is also a principal of Kurron Shares of America, a hospital management company on Long Island hired by United's board in September. "And the most telling decline was that patients were simply choosing other places to go for their emergency care. In urban high-growth areas, that's a red flag for other problems."
In December, the administration sought Chapter 11 bankruptcy protection, and the hospital stopped admitting patients for elective treatment on Christmas Eve. By Thursday, only two inpatients remained. The emergency room will stay open until the end, but no one knows exactly when that will be. The hospital submitted a "plan of closure" to the State Health Department, and a specific date will be set once the state signs off, Mr. Dionne said.
Officials from both United and local towns and villages are working with hospital administrators in the area to ensure a smooth transition for emergency care. "United has in the past done 16,000 E.R. visits a year, which is significant," Mr. Dionne said. "That need will continue."
Greenwich Hospital, for one, says it is ready to pick up the slack, even if it means treating more patients without insurance. "We want to do whatever we can to help that community," said George G. Pawlush, a hospital spokesman. "We're here to serve the patients regardless of their ability to pay."
In the newly competitive health care environment, United's loss was Greenwich's gain. In 1998, 15.7 percent of Greenwich Hospital's patients came from Westchester. Last year, 28.7 percent of patients were from Westchester, specifically the communities served by United.
And Greenwich has not been shy about advertising its services in Westchester County newspapers and stepping up mailings to Westchester residents.
"One of the reasons United got caught was competition," Mayor Rand of Rye Brook said. "When you look at it from an intellectual plane, you ask: 'How can it survive?' The answer is: 'It can't, because of the numbers.' And it doesn't need to."
But that assessment does not make the imminent closing any less agonizing for many of the hospital's employees. Clarence Medley, 58, worked at United for 28 years, most recently in the mailroom. He is one of 133 employees who live in subsidized housing on the hospital's campus. Though he has already been laid off, United is letting him and other tenants remain in their homes until the property is sold.
"Now I have to find a job and find a place to live," he said. "We heard rumors, but we didn't believe them. Finally it hit home."
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