One year after becoming law, New York’s landmark experiment in mandated hospital closures, mergers and restructurings is proceeding as planned. In fact the majority of affected hospitals and nursing homes are meeting or exceeding the June 30, 2008 deadline, according to state Health Commissioner Richard Daines.
Three of nine hospitals slated for closure by the Commission on Health Care Facilities in the 21st Century, also known as the Berger Commission, have shuttered ahead of schedule, and hospital systems that were commanded to talk to each other about affiliations are talking to each other. There are, of course, unhappy hospitals, but in general it seems to be working.
“The health department through the implementation has shown some flexibility, which has been welcome, in carrying out the mandates,” said William Van Slyke, a spokesman for the Healthcare Association of New York State. “It remains to be seen whether the resources will be made available to match the appetite for change.”
Other states are no doubt closely watching New York’s process for revamping its entrenched and financially embattled hospital system. The New York health department’s one-year checkup on the progress arrives as New Jersey prepares for a report from its own commission, albeit one that was not given the full power of law as the New York commission was.
Headed by Princeton University economist Uwe Reinhardt, the report from the Commission on Rationalizing New Jersey’s Health Care Resources was due earlier this month, but now is not expected until after Jan. 1, 2008. Hospital industry insiders say the report is being held up because of the recent nomination of Heather Howard as health commissioner to succeed Fred Jacobs, who recently announced he is leaving office to return to St. Barnabas Health Care System as executive vice president and director of the St. Barnabas Quality Institute, effective Jan. 28, 2008.
New York has $1.5 billion to pay for the mandates but in the latest round received $2.5 billion in requests, said Claudia Hutton, a state health department spokeswoman. So far $550 million has been made available to assist hospitals and nursing homes with their implementation of the mandate, and to date the health department has distributed $362.3 million in awards with the balance expected to be announced by the end of the year, Hutton said.
One hospital relatively happy with the process and the outcome was 515-bed Lenox Hill Hospital in New York, which was ordered to close 29-bed Manhattan Eye, Ear and Throat Hospital. Lenox Hill received a total of $37.5 million to move the process along and is anticipating final state approval by the end of this year so that it can begin shutting down inpatient beds after the first of the year and merge the facility into Lenox Hill as an outpatient center, said spokeswoman Barbara Osborn.
Once one of the financially strongest hospitals in New York, Lenox Hill has struggled with its balance sheet in recent years because of the costs of operating Manhattan Eye, Ear and Throat Hospital as a subsidiary.
The Berger Commission recommendations “actually allowed us to go forward with our plan to merge MEETH into Lenox Hill Hospital,” Osborn said.
The health department also noted that 149-bed St. Vincent’s Midtown, New York, and 55-bed Bellevue Woman’s Hospital in Schenectady have also closed ahead of schedule.
There has been some resistance to the mandates, prompting the state health department to step in to move things along. In October, recognizing the “deep feelings in western New York” surrounding the mandate to join 1,200-bed Erie County Medical Center and Kaleida Health in Buffalo under a single, brand-new governance structure, state health authorities assembled the governing board, which led to a letter of intent, Hutton said.
Kaleida President and Chief Executive Officer James Kaskie was named CEO of the new organization and the 15th voting member of the board. Officials said it would take at least another year to study and develop plans to achieve the goals of the new unified system.
Meanwhile, four hospitals that were directed to explore affiliation agreements were not able to, but have identified initiatives that they can jointly pursue, state health officials noted. They include 256-bed Arnot Ogden Medical Center and 250-bed St. Joseph’s Hospital in Elmira; and 288-bed Niagara Falls (N.Y.) Memorial Medical Center and 175-bed Mount St. Mary’s Hospital and Health Center in Lewiston, which is sponsored by Ascension Health.
In the end, religious differences precluded the merger in Niagara County, hospital officials jointly declared in a news release. Niagara Falls Memorial had proposed a full asset merger into a new community-owned organization that would maintain all aspects of the ethical and religious directives for Catholic healthcare at Mount St. Mary’s, but that was not acceptable to Mount St. Mary’s or Ascension. As an alternative, Mount St. Mary’s and Ascension proposed a merger with Ascension as the corporate sponsor with options for continuing “certain reproductive healthcare procedures for the Niagara Falls community” independent of the combined hospital, according to officials. That was not acceptable to Niagara Falls.
Despite the differences, the talks “have already borne fruit,” officials said. The hospitals already have jointly recruited a cancer specialist, and they are exploring the pooling of resources to upgrade information technology, they said.
