The arrival of last weeks deadline for the New York State Health Department to complete a major portion of a controversial plan to close, merge and restructure hospitals and nursing homes throughout the state has left little doubt that the healthcare landscape there has been substantially altered. The question of whether the landmark effort has been a success or failure is, however, still up for grabs, those familiar with the endeavor said.
The benefits are long-term, and theyll be realized over the next 10 years, said Kenneth Raske, president and chief executive officer of the Greater New York Hospital Association. From an industry perspective, this was harsh medicine since it meant, in some cases, the closure of facilities that would affect patient care and the communities they serve. But in the long run, its important to have a healthcare system that is healthy and rationalized, so I think it was a needed agony we had to go through to come out better in the end.
Launched 2½ years ago, the statewide restructuring effort is part of a larger plan to pare New Yorks bloated long-term-care and urgent-care systems, improve primary-care access, and cut spending and waste. The $2.5 billion effort, which has hit some significant bumps in the road, is the result of a 2006 law that established the Commission on Health Care Facilities in the 21st Centuryalso known as the Berger Commissionand charged the group with studying and creating a plan for overhauling the states financially troubled healthcare system.
The commission issued a controversial set of mandates, which included the closure of nine hospitals and the reconfiguration, affiliation or conversion of 48 others. It also called for the closure of seven nursing homes. In all, the mandate called for cutting 4,200 inpatient beds and 3,000 nursing-home beds from the system. The commission allocated $550 million to help healthcare facilities comply with the closure and reconfiguration mandates.
While the reform process must be ongoing, New York has a stronger, better healthcare system today because of the Berger measures we have implemented, said New York State Health Commissioner Richard Daines in a news release.
As of June 30, some 3,400 hospital beds had been eliminated or slated for elimination by 2010, while a total of 2,700 nursing home beds will be taken out of the system by 2011, according to health department officials. By the end of this year, all nine hospitals and seven nursing homes will have shuttered their doors. The plan is projected to save taxpayers and providers about $1.5 billion annually, according to the commission report released in 2006.
We think there will be some savings immediately with the closure of hospitals, said health department Deputy Commissioner Jim Clyne. And we believe that people are seeking more appropriate care because were seeing that 40% of the emergency department visits received by those closed hospitals arent showing up elsewhere in the state. Clyne acknowledged, however, that the state hasnt done a study to confirm whether patients who were showing up for inappropriate emergency care at shuttered hospitals are seeking treatment at primary-care facilities throughout the state.
But even if the overhaul appears to be moving toward success, healthcare officials across the state say implementing the commissions mandates has been painful and met with resistance on a number of fronts. Kaleida Health embraced the Berger Commission as a call to actionthat change was needed, said James Kaskie, president and CEO of 1,134-bed Kaleida Health, Buffalo, and the newly created Western New York Healthcare System. We were willing to change, but part of the problem with Berger was the language of the recommendations was sometimes ambiguous. Other people just did not like the recommendations and some were flawed.
Several of the recommendations resulted in drawn-out battles between hospital and health-department officials. In the case of Kaleida and nearby 406-bed Erie County Medical Center, Buffalo, a court battle ensued to stop a directed merger of the two systems. I think the general sense was that because Kaleida is the bigger system, ECMC would be swallowed up, Kaskie said. So we had to clarify that that was not the intent, and assure that ECMC would be a vibrant medical campus throughout the larger health system.
Ultimately, the providers announced late last month that they would enter into a unified governance agreement that would allow both systems to retain separate income statements and balance sheets while being governed by the Western New York Healthcare Systeman organization established by the commission. The goal is to evolve in such a way to allow eventually for a merger, Kaskie said.
Despite clearing that major hurdle, health department officials said on the day that they announced the end of phase one of the commissions plan that there are still some kinks to be worked out.
On June 27three days before the deadline for completion of the overhaul effortthe health department had to unilaterally amend the operating certificates for 18 providers who were not in compliance with the commissions requirements. They include Albert Lindley Lee Memorial Hospital in Fulton, which is slated to become an outpatient facility; DeGraff Memorial Hospital in North Tonawanda, which will close in 2011 and become a provider of yet-to-be-determined services; and Millard Fillmore Gates Circle Hospital in Buffalo, which will cease to operate in December 2009 and merge with Buffalo General Hospital. DeGraff, Millard Fillmore and Buffalo General are all part of the Kaleida system.
State health officials are moving forward with implementing other phases of the commissions plan, said the health departments Clyne. They included providing $100 million in funding to develop primary-care services and facilities throughout the state; $150 million to fund Berger look-alike projects for hospitals and nursing homes that wish to merge or convert their services; and $6 million in planning grants for communities to assess their healthcare needs. Health officials will also create a Web site link that details whether New York communities have high or low numbers of preventable hospital admissions.