Jay Gallagher's story in today's Rochester Democrat & Chronicle discussed the hospital/nursing home closure commission. He quoted me a bit, accurately by the way, and I think I'll expand on what I said to him.
Many use the Federal Commission that targets military installations for closure as a handy metaphor to describe New York's hospital/nursing home closure commission. But there are a few key differences, some of which I discussed with Jay, some of which I didn't think of until afterwards.
- The Federal government owns its military installations while the hospitals and nursing homes are merely regulated by the State. Those facilities are owned by private, mostly not-for-profit organizations. There is no prospect of a legal challenge by a base commander to a closure decision. But we can count on a legal challenge from at least some hospitals and/or nursing homes being told to close.
- Because of the ownership difference all the savings from a base closing accrue to the Federal government while only a fraction of the savings from a hospital or nursing home accrue to the State, even when you include the local share of Medicaid costs.
- The political reaction against military base closings is overwhelmingly about direct jobs and other local economic impact. In addition to the economic issue, closing a hospital also generates an emotional effect among former and potential patients that is quite apart from their economic interests. So the issues take on a different tenor.
- Not every Congressional District has a military base. Indeed, military installations are concentrated in the South and West. But I'd bet that a very solid majority of NYS Senate districts have a hospital and probably several nursing homes. (There are 61 Senate districts and 150 Assembly districts, fewer than the number of hospitals and and many fewer than the number of nursing homes.)
- There's a huge difference between telling military personnel that it's time to pick up and move elsewhere and telling a frail 90 year old that they must move out of what has become their home for their waning days or telling their 65 year old child that they must travel further to visit mom. Can't you just imagine the "human interest" stories in the press on that one? It's hard enough to close a residential facility that's providing bad care. The Health Department press person who gets tasked with defending these cases and tagged as cold and heartless has nothing but my sympathy.
Here's how I came up with the "70 of the state's 230 hospitals" analytical estimate which contrasted with my "half a dozen, maybe a dozen" political estimate.
Health Department staff told me at the beginning of this week that New York has 247 hospitals with 62,800 beds and an occupancy rate of 60 percent. That equates to 37,680 patients per day. Optimal average occupancy is probably about 85 percent (allowing for normal fluctuation), but we'll cut them a bit of slack and say 80 percent. Eighty percent occupancy with 37,680 patients equates to 45,216 beds, or 17,584 less than what we have today. Today's average hospital has 254 beds. Divide 17,584 by 254 and you get 178 hospitals down from today's 247, a reduction of 69. So round that to 70. Given that it would be reasonable to assume a continued decline in hospital days and that we assumed 80 rather than 85 percent as optimal occupancy, these may be conservative estimates.
Certainly there are many folks who can come up with a more sophisticated political estimate than I, but here are the reasons for my skepticism. Assume that Senators and Assembly members in districts with a hospital proposed to be closed will tend to vote to overturn a package of Commission proposals. Then in order to protect the package from being overturned, you must have a majority in at least one of the houses which doesn't have a hospital in the package. Otherwise you've got sufficient votes for an override. So you've got to keep the total number small.
Mind you this assessment doesn't even begin to take into account a host of factors. Take for example, the research and education being conducted in teaching hospitals and their all-round political clout. These of course are the most expensive hospitals in the system and their care often doesn't measure up to that provided in community hospitals, but they have tremendous leverage.
Or take for example, communities with two hospitals whose total capacity is well recognized as more than necessary, but one of the hospitals is secular and the other is Catholic. Now which one do you choose?
Perhaps the Commission and Legislators will be gutsier than that, but find me the evidence in the past decade of that discipline and willingness to face the public having made those sorts of decisions.
For a future post, let's consider what the Commission would have to do to really impress us. (Feel free to send me private e-mails on this rather than comment. I'll keep your name out of it.) Here's a "just thinkin' out loud" start as to what the the Commission's package should include in order for us to be at least mildly surprised and impressed with their fortitude. The package has to:
- Include a proportionate number of teaching hospitals and at least two in any case.
- Target hospitals that are less efficient and/or provide care of lesser quality than their competitors. There are lots of quite sophisticated methods for measuring efficiency. And let's not count reputation as a quality measure. Show us some hard data.
- Compare more than the hospitals and their patients. First compare the use of hospital services within hospital service areas. It's a subtle but quite important difference. Look first at the per capita hospitalization rates of the populations in each hospital market or service area. Calculate which areas have high hospitalization rates and figure out why and the degree to which it may be unnecessary or avoidable. Then look to see where those patients are being hospitalized.
- Offer up a workable plan for retiring outstanding capital debt that doesn't take systems off the hook for their hospitals that are proposed for closure, but which also spreads some of the burden for retiring that debt on the surviving competitors.
- Detail how the savings will be generated from each closure and who will accrue the hard dollar benefit. (Remember, when some of a hospital's would-have-been patients go to another hospital, the surviving hospital gains, but neither Medicaid nor other payers get any savings. And if the surviving hospital has higher prices than the closed hospital, the savings can get real small real fast.)
- Close a sufficient number to make a real dent, but leave a sufficient number for each market to remain competitive.
I'm not sure that this is really supposed to happen. It's great rhetoric, but I continue to wonder whether it's a feint by some of the players in the hospital industry who expect to survive. Perhaps it's a way to get the State to pay off the capital debt for facilities that systems wanted to close anyway. Perhaps what I'm doing here is daring the Commission to generate proposals with the scope necessary to make a real difference. I'd be amazed, but glad to be wrong.
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