This story was originally published as part of Crain's New York's Forum on Health Care Equity. Find more exclusive content, data and graphics in the full package here.
After the hospital leaves town
In the weeks before Kingsbrook Jewish Medical Center in Brooklyn closed as a full-service hospital, in the summer of 2021, the ceiling sprung leaks that sent water trickling into the lobby. Patients and healthcare workers had to navigate around garbage cans set out to catch the drips.
"They had stopped fixing things. They had stopped replacing broken equipment," said Julie Keefe, a nurse who worked with respiratory patients. "We were trying our best, but it just felt like total disinvestment."
Kingsbrook served a largely Caribbean American community on the border of Crown Heights and Flatbush, where the majority of residents are people of color. Its patients were largely uninsured or relied on Medicare or Medicaid. That typically spells financial trouble for hospitals, which depend on relatively higher private insurance payments to stay afloat. A 2016 analysis of five struggling Brooklyn hospitals by Northwell Health, the state's largest healthcare provider, projected that Kingsbrook would need $50 million in state funding that fiscal year just to stay open.
The study yielded no miracles for the facility. The state, which regulates and helps fund private hospitals, announced Kingsbrook would close its beds and transfer patients to nearby Interfaith and Brookdale medical centers. The trio would then unite under a new system, One Brooklyn Health. Kingsbrook would become a shell of its former self, whittled down to an emergency room and a few other services, while the rest of its land would give rise to affordable housing and a "medical village" for nonhospital services.
Lawmakers and hospital executives for decades have touted consolidation as a solution to cut costs and increase the quality of care. Their allies argue that cutting unnecessary beds will reduce healthcare spending by redirecting patients from hospitals to doctors' offices, where care is less expensive, more consistent and more focused on prevention.
Instead, the consolidation strategy has given rise to increasingly flush megasystems of hospitals concentrated in whiter, wealthier areas of the city. During the past 25 years, 20 hospitals have closed across the city, amounting to a loss of about 5,800 beds, a Crain's analysis found. Twelve were in communities that tend to bear the highest burdens of disease: poorer neighborhoods where the majority of residents are people of color. Six districts, including four where the majority of residents are non-white, now have no hospital at all.
The city's legacy of hospital consolidation risks widening longstanding health disparities by forcing already underserved New Yorkers to travel farther for medical care and spend more to get it. Others will never go elsewhere, instead entirely falling off the map of the city's lopsided healthcare system.
Meanwhile, wealthy hospital systems build expansive care networks and amass hundreds of millions of dollars in profits.
'A bed built is a bed filled'
The modern orthodoxy of hospital consolidation traces back to healthcare scholar Dr. Milton Roemer, who in 1959 argued that supply induces demand when someone else will shoulder the cost—whether the government, employers or an insurance company. Eliminating beds, his logic followed, would therefore reduce demand and the commensurate expenses.
In the next couple decades, New York Mayors John Lindsay, Abe Beame and Ed Koch all turned to hospital consolidation in an effort to slash the government's portion of healthcare spending. Across the city, roughly 20,000 hospital beds disappeared.
Early on, doubts about the strategy emerged. Walter McClure, a health-policy researcher who had been a hospital-consolidation proselytizer, analyzed several of the city's hospital closures in 1979 and concluded that bed numbers were in fact a "poor proxy" for hospital spending. He found that the closures shifted care to hospitals with more costly, intensive services, offsetting savings from the reduction in beds.
Nonetheless, Roemer's mantra, "a bed built is a bed filled," became the cornerstone of a sprawling 2006 report that instigated the closure of nine hospitals across New York state, including five in New York City.
The Berger Commission report, as it became known, came at the behest of Gov. George Pataki to cut healthcare spending by "rightsizing" the state's hospitals. Its chairman, investment banker Stephen Berger, had gained his cost-cutting bona fides as an architect of New York's response to the 1970s fiscal crisis.
Hospitals rely heavily on the state for funding, whether through capital grants or New York's Medicaid program, which is the second-largest in the U.S. in terms of spending. That money comes with strings—ones that lawmakers often pull in their ceaseless quest to cut costs and balance budgets. The Berger report claimed its recommended consolidations would cut healthcare costs by more than $1.5 billion annually, or $15 billion over a decade, all without compromising patients' access to care.
"The repercussions of hospital closures on public health are nonexistent or minimal," the report said, arguing that little is lost because hospitals that close "have been in trouble for extended periods of time" and had already "gradually withered away."
The assumption was that a hospital in financial distress was better closed than rescued, at least from a fiscal standpoint. But critics argue the Berger Commission did not account for the harm that closures would incur on New York's most vulnerable people.
"Healthcare is not a machine with interchangeable parts," said Alan Sager, a professor at the Boston University School of Public Health who has studied the causes and effects of hospital closures in American cities. "Healthcare is a network of relationships that take years to establish, and once they're uprooted they die, like a plant."
"You make hospitals better by fixing them, not closing them," he added.
Deborah Socolar, a health policy researcher who worked with Sager and an activist who protested Kingsbrook's closure, said research indicates as many as a third of patients whose hospital closes will not reappear at other hospitals for some time—or potentially at all.
That poses a dire risk for the city's communities of color, which already face higher rates of chronic illness and premature death, according to state data. The Brooklyn neighborhoods served by Kingsbrook are classified as "medically underserved" by the federal government.
One Brooklyn Health downplayed the consequences of Kingsbrook's closure in an application for state approval of the plan, saying that the hospital was only 52% to 60% full on average. But healthcare workers said those yearly averages obscured their reality of overcrowding, particularly during the Covid-19 pandemic. Even before then, in 2015, Kingsbrook typically had 188 patients in its 198 staffed beds—a 95% occupancy rate—according to internal data cited by Northwell in its study.
In its application, One Brooklyn Health projected that 70% of Kingsbrook patients would either go to hospitals other than Interfaith and Brookdale or "would not materialize" elsewhere.
One Brooklyn Health declined to make the system's CEO, LaRay Brown, or Kingsbrook executives available for an interview.
More than a bed
When a community hospital such as Kingsbrook closes, its neighbors lose more than beds. They lose a hospital that is likelier to understand their racial, ethnic and cultural identities. That kind of personalized care, called cultural competence, has been shown to improve patient outcomes and reduce health disparities by fostering trust and effective communication.
Vivienne Phillips, a registered nurse who started at Kingsbrook in 1991 and now works in its ER, grew to know her patients, who often had multiple chronic conditions and were in and out of the hospital. Over time she has cared for multiple generations.
"They knew when they landed in the emergency room they would be cared for by people who knew them, knew their family," Phillips said.
Kingsbrook's Caribbean patients saw health care workers who looked like them and understood how their values and beliefs shaped their approach to care. Phillips said she and her fellow nurses knew to offer their Caribbean patients something to cover their head. The hospital's recognition of its patient population even extended to the cafeteria, which served an oxtail stew beloved by both patients and staff.
"It's never been the biggest hospital or the fanciest, but it was the home hospital for a lot of people," said Keefe, the other Kingsbrook nurse. "I worry that people fell through the cracks."
One of its longtime patients was Lithia Panton-Moore, a Crown Heights resident who was in and out of Kingsbrook from the 1990s until her death in 2019 in its hospice unit, at the age of 95.
Her daughter, community activist Karen Fleming, recalled how Kingsbrook helped her mother walk and talk again after a traumatic brain injury. Fleming got to know the hospital's security guards, who let her in to give her mother a kiss before early-morning shifts as a coach-bus driver. A cleaning lady helped Fleming keep calm when her mother was rushed to the ER after a seizure.
After Fleming's mother was admitted to hospice care in 2019, Fleming decided to sew her a shroud of muslin. When the time came, two nurse aides helped Fleming prepare her mother's body for burial just as she envisioned. It showed her they cared.
"I'm not saying they were perfect, and I'm not saying they were angels, but there were some angels in there," Fleming said of Kingsbrook. "You can't find that everywhere."
Healthcare workers said longtime Kingsbrook patients have expressed reluctance to seek care elsewhere, at times refusing transfers to Brookdale or Interfaith. Others find there is no bed for them.
Dr. Subhash Malhotra, a cardiologist, described one patient of his who walked into Kingsbrook's emergency room in mid-January, not knowing the rest of the hospital had closed, then went into respiratory failure. Brookdale and Interfaith had no available ICU beds. After hours of languishing in Kingsbrook's ER, the patient ended up in the ICU at Maimonides Medical Center in Borough Park. It was there that he died.
Proponents of hospital consolidation prescribe an expansion of primary and preventive care to fill the void, arguing that most medical care should and would happen outside a hospital. In Kingsbrook's case, a portion is slated to become a "medical village" for primary care, urgent care and other outpatient services.
Socolar said that ignores the symbiotic relationship between hospitals and other medical care, because many doctors have offices in or near the hospitals where they work; when hospitals close, doctors go elsewhere to practice.
The tradeoff also seems to be reserved for marginalized communities, she added.
"Wealthier communities don't tend to get confronted with 'It's one or the other,'" Socolar said.
Many doctors who rented clinical suites at Kingsbrook were forced out when the hospital closed, said Malhotra, who still has a private practice across from Kingsbrook.
Elisabeth Benjamin, vice president of health initiatives for the Community Service Society of New York, a Manhattan nonprofit that studies and fights economic inequality, said promised expansions of nonhospital care often do not happen, leaving a healthcare desert in the wake of a closed hospital.
Northwell's study found the neighborhoods served by One Brooklyn Health would need 120 more doctors within five years to offset the consolidation. It proposed a network of 36 new facilities, at a cost of roughly $226 million, but it noted that those costs would exceed what the state had committed for the consolidation plan. Only a handful have materialized.
Today the city's 1,300 health centers, including several hundred primary-care offices, are still overwhelmingly concentrated in Manhattan, according to a 2020 analysis by the New York City Economic Development Corp. Manhattan has nearly 1,200 doctors per 100,000 residents, while Brooklyn has 352 per 100,000 residents and the Bronx about 226.
Winners take all
The echoes of a hospital's closure ripple through the broader healthcare ecosystem, driving up costs by shifting more care to large academic medical centers that charge higher rates and offer more expensive specialty services.
New York's hospital pricing has not always worked this way. Between 1983 and 1997, the state used a complicated rate-regulation system to determine the prices that hospitals could charge. The system was meant to control costs and provide safety-net hospitals with adequate financial support. As analysts with the United Hospital Fund, a local health-policy nonprofit, wrote in a 2002 Health Affairs study, it kept the city's hospitals "financially weak but alive."
The state abandoned the system under Pataki, the same governor who convened the Berger Commission. The deregulation coincided with falling occupancy rates, as the AIDS and crack cocaine epidemics subsided. Insurers used the old system's rates as a ceiling and cinched even lower hospital prices. The result was seismic.
"The city's hospitals grew fiercely competitive and within a mere two years [1997 and 1998] had reorganized themselves into four large networks … in an effort to increase market share, strengthen bargaining leverage over insurers, and rein in costs," the 2002 study said.
Kenneth Raske, president of the Greater New York Hospital Association, a lobbying group that represents 140 hospitals and health systems in the state, said consolidation was necessary to counter monopolization among insurance companies. It also enabled hospitals to invest in long-overdue upgrades to their buildings and technology, he said.
The resulting oligopoly also secured enough bargaining power to send hospital prices skyrocketing. A 2016 New York State Health Foundation report found that hospitals with the biggest market share, such as New York–Presbyterian and Northwell, tend to charge the most. Across the city, prices for the same services vary by thousands of dollars depending on the hospital and insurance plan, a November Crain's analysis found.
Raske said New York already has a congested healthcare marketplace and said that, despite evidence to the contrary, competition between the city's large hospital systems can temper the impact of consolidation on prices.
"We have major systems going at each other on a day-in, day-out basis," he said.
As Raske put it, hospitals become less important as more procedures can be performed without an overnight stay, so replacing them with new kinds of facilities, as in the case of Kingsbrook's planned medical village, is only appropriate. Raske envisions a healthcare environment where all hospitals are part of systems—where independent hospitals use consolidation and government support to get themselves out of the red, then become absorbed by a behemoth like Northwell.
"You have just two choices here: government support or systems," he said. "Pick one."
Asked about the disproportionate number of hospital closures in the city's communities of color, he replied, "I would love to see your data, because I don't believe it. We haven't closed any hospitals in those communities… so, what the hell are you talking about?"
"To tie consolidation to the health equity issue, I just don't see it," he said.
As large systems siphon away lucrative, privately insured patients with their capital upgrades, community hospitals like Kingsbrook end up hemorrhaging money serving patients who are uninsured or on Medicare or Medicaid, which tend to pay hospitals below cost for the care provided. The hospitals end up with little money to invest in quality improvements or service expansions, which further perpetuates the cycle.
Kingsbrook garnered mixed quality ratings over the years leading up to its closure, including a C rating for patient safety in spring 2021 from the nonprofit LeapFrog Group. Keefe, the Kingsbrook nurse, acknowledged the hospital was a "little shabby" and needed upgrades. In the weeks before Kingsbrook stopped admitting patients, she said, the hospital had stopped replacing broken equipment. Still, she added, that did not justify its closure.
Northwell's study said the solution for hospitals such as Kingsbrook is "to catch up with the broader market strategies other providers have been pursuing over the past decade."
In the same breath, it acknowledged: "The market and financial forces confronting these hospitals make it virtually impossible for them to succeed on their own."
Road map for the future
Experts point to regional health planning as a way to make New York's healthcare delivery system more equitable, both within hospitals and outside them.
"There's nothing to stop the city Department of Health from building up capacity to essentially assess what's needed in the health delivery system in the five boroughs and advocate for it," said Lois Uttley, senior advisor of Community Catalyst's Hospital Equity and Accountability Project.
City Councilwoman Lynn Schulman, who chairs the council's health committee, wants to tweak the zoning review process to include assessments of how a proposed development will impact local hospital capacity.
The Coalition for Affordable Hospitals, which was convened by Local 32BJ SEIU, a labor union, is pushing for state legislation to bar hospitals from using certain anticompetitive contract terms when they negotiate prices with insurers, weakening their leverage to set high rates.
Advocates notched a win in December, when Gov. Kathy Hochul signed legislation that requires hospitals to file an independent equity assessment when they propose a major project. For the first time, they will have to detail their plan's likely impact on medically underserved communities.
Experts nonetheless predict that hospital consolidation will continue. New York's next fight is unfolding just outside city limits, at Mount Vernon Hospital. Montefiore acquired the Westchester County hospital in 2013, when its previous owner filed for bankruptcy, as part of an aggressive expansion into the Hudson Valley. During the next few years, Montefiore eliminated beds and closed department after department.
Then, in 2019, it announced plans to close the hospital. In an echo of hospital consolidations past, Montefiore said it would replace the hospital with a $41 million emergency and outpatient facility funded by a state grant. The following year, in the face of protests and the pandemic, Montefiore said it would reassess the plan. What happens next is uncertain.
But one data point is clear: In the area surrounding Mount Vernon Hospital, three-fourths of residents are Black or Hispanic.
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