12/4/12

Brooklyn's Broken Hospitals

The State Department of Health has targeted six private hospitals in Brooklyn for possible closure, merger or downsizing: Brookdale Hospital Medical Center, Brooklyn Hospital Center, Interfaith Medical Center, Kingsbrook Jewish Medical Center, Long Island College Hospital, and Wyckoff Heights Medical Center.

Low-income families and the working poor will be hardest-hit by these closures.

The medical safety net is giving way because there isn't enough reimbursement money.  Brooklyn's clinics and hospitals, although they get the same amount of reimbursement as do their counterparts on the Upper East Side of Manhattan, are dealing with a much poorer, sicker population.

The Affordable Health Care Act (ACA), fully effective on January 1, 2014, will reduce Medicare and other federal reimbursements, on top of the state's capping Medicaid payments.  That's bad financial news for Brooklyn most vulnerable hospitals, unlikely to bridge the gap with reimbursements from commercial insurers.

What happens when over-bedded, under-reimbursed hospitals in Brooklyn close, maybe leaving patients who depend on their emergency rooms for primary care without alternatives, isn't clear.

New York City has been losing hospitals for ten years now, beginning with Interfaith Medical Center's campus on the Crown Heights border, followed by Our Lady of Mercy Medical Center in the Bronx; Beth Israel on East End Avenue in Manhattan; St. Joseph's Hospital in Flushing; St. Mary's Hospital in Brooklyn; St. Vincent's Midtown Hospital in Manhattan; Cabrini Medical Center on East 19th Street in Manhattan; Victory Memorial Hospital in Bay Ridge; Parkway Hospital in Forest Hills; St. John's and Mary Immaculate in Queens; North General Hospital in Harlem; St. Vincent's Catholic Medical Center on West 12th Street in Manhattan; and Peninsula Hospital in Rockaway, Queens.

The basic problem is a loss of insurance revenues: Medicaid, Medicare and direct government subsidies.

The deeper problem is how hospitals are designed. Hospital operations depend on revenues from high-priced specialty care to cover routine care at lower rates. To cover their high overhead, hospitals compete with each other for patients in need of high-end "tertiary" surgeries, where insurance reimbursements run highest.

But even hospitals that can cover their primary and emergency care costs have too many beds -- an estimated 30% of hospital beds in Brooklyn are vacant.  The big bucks used to be in inpatient care, but demand has shrunk due to shorter stays and more outpatient procedures.

The state helped create the surplus of hospital beds. Hospital executives once had to prove a compelling need in order to open a new hospital, but when times were good, the state loosened the regulations on hospital openings to accomodate growing healthcare empires.

Now, with cuts in Medicaid and Medicare and private insurers slashing their reimbursements, that's all over. Hospitals are trying to figure out how to cut inpatient beds and merge facilities to save money.

Under the new federal health care law, providers will no longer be reimbursed on a "fee for service" basis -- a fixed amount per patient -- but based on how many people each system cares for. As a result, providers will have to cut costs and provide smarter, more efficient care.

Since bigger systems have more negotiating clout with insurers, hospitals will likely merge and create specialty centers.  Free-standing hospitals and small healthcare systems are not likely to survive.

The article from Brooklyn Bureau.

Hurricane Sandy a boon to Brooklyn hospitals [Daily News.]

The city's "boom or bust" hospital system struggles to keep up with demand for emergency services -- as emergency rooms close [Bloomberg Business Week.] 

More from WNYC.

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