Going to the hospital? Better bring a friend. A pushy one, if possible.
Struggling under a landslide of financial pressures, Western New York hospitals have made unprecedented cutbacks that have inevitably hurt the quality of care they deliver. Even insiders say that the wise patient today brings along a full-time advocate to look out for his interests when he can't.
The trend mirrors a national phenomenon and it's a huge reversal for the once-grand institution most closely associated with the human yearning for good health. Reeling from the combination punches inflicted by managed care, government cutbacks and even advances in medicine, hospitals across the country have taken beds out of service, laid off nurses, cut back on training and even reduced their housekeeping staffs.
The consequence? When a patient calls for help today, the nurse who responds may be less skilled than in years past, will carry a larger load of patients and will have less time to tend to any of them. She will take longer to arrive, and when she does, she will enter a room that's not kept as clean as it used to be. The result, as a recent analysis showed, can be fatal.
There are many reasons for this harrowing trend in hospital care; a number of them, such as reductions in Medicare reimbursements, are universal. But another factor is also at play in this region, one that left unattended will hinder all efforts for improvement: We have too many hospitals.
Mortality rate above average
No patient deaths have been documented in Western New York as a direct result of these pressures, but by other measures, hospitals here have worse problems than those in other parts of the country. Layoffs, low reimbursements and bloated capacity have put Buffalo area hospitals on the critical list.
Worse, according to a business-led study, mortality rates in Western New York hospitals are above average in many key measures.
"If my wife had to go to the hospital, I would quit work and go stay with her," said one man who ought to know. He is Dr. Donald Copley, a cardiologist who practices at Kenmore Mercy Hospital.
Nurses today are harried, he said; hospital pharmacies are understaffed. It's the kind of environment that incubates trouble, he said, from administering incorrect doses of medicine to simple failure to notice that a patient has fallen out of bed.
Copley is not alone in believing what would have been considered a sacrilege only a few years ago. A nurse who was recently hospitalized said her experience taught her the advisability of recruiting an advocate, and even the head of Erie County Medical Center didn't dispute the wisdom of bringing along a protector. "It's more and more common for families to help when a patient is in the hospital," said Sheila Kee, nodding her head at the mention of Copley's proposition.
More broadly, in a recent national survey commissioned by the American Nurses Association, 75 percent of nurses responding said they believe the quality of care at the place they work has declined over the past two years. Forty percent said they would not feel comfortable having a family member or someone close to them be cared for in their facility.
There is plenty of blame to go around for the condition of American hospitals, including insurance companies, government officials, doctors and the hospitals themselves.
But if a patient, frustrated with the care he is receiving, wants a complete list of suspects, he should not forget to check the mirror. The demands of patients drive many of the issues bedeviling hospital care, and before any widespread improvement can occur, patient behavior will have to change.
American hospitals are mired in the mud of a prolonged fiscal crisis, and the spatter on patients is only the most obvious place its effect can be seen. Hospitals also face declining occupancy rates, a growing shortage of nurses and competition that grows ever more fierce, not always in medically helpful ways.
The money crunch makes it more difficult to keep up with technology, stay ahead of debt collectors and maintain adequate staffing levels. "How do I upgrade equipment?" asked Dr. David Hohn, president of Roswell Park Cancer Institute. "How do I recruit doctors, when reimbursements are 30 to 40 percent less than in Chicago or San Francisco?"
The causes of hospitals' declining fortunes are multiple, including growth of the uninsured, but there are two principal sources plus a long-term trend that will only accelerate.
The immediate issues are the effects of managed care and government funding cutbacks. The dominance of managed care has forced hospitals to compete for patients by accepting lower payments from insurers. In Buffalo, for example, about 64 percent of privately insured residents are covered by managed care plans offered by insurers like Blue Cross and Blue Shield, Univera and Independent Health.
Even more significant is the government role. Washington cut Medicare payments to hospitals four years ago in an effort to reduce its annual budget deficit, moving to reduce costs by $115 billion over five years. That would have hurt, but the Balanced Budget Act ended up taking nearly double that amount, about $218 billion, according to Sen. Charles E. Schumer, D-N.Y.
What is more, those losses came after repeated reductions in Medicaid payments by the state. Together, those government health programs account for more than half the revenues of many hospitals. Washington restored about $35 billion in Medicare and Medicaid payments in December, but while that helps, hospitals say it only slows the rate of loss.
Those blows staggered the industry, but the assault on hospital health also springs from another, more Darwinian source. With the development of powerful new medicines and the rise of less expensive outpatient surgery, often conducted outside of hospitals, the health care industry itself is evolving in a way that undermines the economic well-being of hospitals, whose primary product, inpatient care, is in declining demand.
And, just to complicate matters, because many ailments can now be treated outside the hospital, patients who are admitted tend to be sicker, as a group, than they were just five or 10 years ago.
In Western New York, conditions are worse. The financial squeeze took hold here just as the area's population began to plummet. Tens of thousands of residents fled the region as the economy went into a nose dive. Only a few decades ago, for example, Buffalo was projected to reach a population of half a million. Now, it is shrinking, with about 300,000 people to produce the revenue needed to maintain the buildings, pay the nurses and buy the expensive, high-tech equipment hospitals need.
So the hospitals bleed. Western New York's private hospitals lost $29.5 million in 1997, according to Healthcare Association of New York State, then went on to lose more than twice that amount -- $71.9 million -- the following year. In 1999, the most recent year for which figures are available, losses were $47.2 million.
(The state Health Department calculates operating margins differently, and shows losses to be significantly lower. Its figures include the hospitals' investments and endowments, but Moody's Investor Services, one the nation's two principal credit rating agencies, says the hospitals' method is the more informative.)
Not surprisingly, the losses cost people their jobs. The region's hospitals laid off 10 percent of their staffs between 1994 and 1998, according to the Western New York Healthcare Association. In Erie County, the figure was over 11 percent. Licensed by the state to operate nearly 5,200 acute care beds, only 3,850 are in operation in this region.
Nationally, Moody's reported in October that hospital downgrades "significantly outpaced" upgrades in the first nine months of 2000. It was the third consecutive year Moody's recorded that trend, blaming hospitals' worsening fiscal condition on factors such as lower reimbursements from government and managed care companies, competitive pressures and the rising costs of labor, drugs and supplies.
While Congress restored some of the cuts inflicted by the Balanced Budget Act in December, no substantial relief is in the offing. Insurance companies are unlikely to agree to large increases in reimbursements and, perhaps even more to the point, science is not going to slow its march toward treatments that are simultaneously less invasive and more effective. In fact, the pace of change will likely increase, as the impact of the Human Genome Project reaches the hospitals over the next 10 or 15 years.
It's a different day in American health care, and hospitals are largely on their own. Forces outside of their control are already imposing change, and there is no sign of letup. The immediate question is whether that change will arrive as the product of a far-sighted plan that acknowledges the inevitable or as the consequence of a free fall that ends when the pieces scatter.
Hospital building boom
The misery of American hospitals may seem to be a recent development, but it took a long time to reach this point of crisis, and in fairness to the hospitals, there is plenty of blame to go around.
Until the 1980s, for example, the federal government essentially paid for construction of new hospitals, relieving their backers of the kind of caution that normally accompanies financial risk. Some proof of need was required before a hospital could be built with federal reimbursement, said John Friedlander, president of Kaleida Health, but the bottom line is that the wariness a market economy normally instills was absent. The result was a hospital building boom.
Albany contributed its own brand of chaos. For years, the state dictated how much hospitals could charge for various services, typically underpaying but nonetheless shielding administrators from the rigors of a competitive economy. Worse, it penalized hospitals that accrued surpluses by reducing their reimbursements the following year. The effect? Hospitals had no reason to conserve.
No surprise, then, that New York's hospitals were ill-equipped to cope when a 1996 law cast them into the cold world of supply and demand. "It was like suddenly going from a Soviet economy to a capitalist one," said Dale St. Arnold, president of the Catholic Hospital System, who came here from Ohio in 1998, just as the new law took effect.
It was an icy awakening. Forced for the first time to bargain with insurance companies, hospitals approached the negotiations hoping the anemic state-set rates, already significantly lower than hospitals were paid in other parts of the country, represented the floor on which new prices would be calculated, said Friedlander. The HMOs, though, saw those rates as the ceiling.
Not surprisingly, the insurance companies prevailed against the poorly organized, economically untutored hospitals. Rates that New York hospitals struggled with for years were suddenly cut even more.
Once again, conditions are even worse in this region. As low as hospital reimbursements are around the state, they are lower still in Western New York, an unfair consequence of having developed cost-cutting efficiencies in years past, said William D. Pike, president of the Western New York Healthcare Association.
Of course, those depressed rates cut both ways, since they also hold down the noticeably lower insurance premiums subscribers pay for health care coverage here. Many observers see those rates as a blessing, one of the few economic incentives this high-tax region can offer to employers.
Still, even some Buffalo business leaders argue that healthy hospitals are more important to the region than extraordinarily low premiums. The hospitals say they'd have $65 million more per year to invest in larger staffs and newer equipment if reimbursements here were the same as Rochester's, and $172 million more if rates were identical to those in Syracuse.
The phenomenon extends to Medicare rates. High reimbursements give hospitals in Rochester $2 million a year more than Buffalo, while hospitals in Nashville, Tenn., take in $53 million more.
The insurance side of the story
Insurers have their own take on this issue, of course, and it is a compelling one. They say the region's hospitals are too slow to attack their problems, mainly the related issues of excess capacity and a level of quality that is too often mediocre. The result, they say, is unnecessary expense that the HMOs have to consider in negotiating reimbursements.
Even the hospitals don't argue the capacity issue. The area doesn't just have too many beds, which is the usual measure of capacity; it has too many hospitals. Erie County alone has 13 acute-care hospitals, including the VA Hospital.
A random comparison to other regions offers persuasive evidence. Erie County, with a population of around 934,000, has approximately 1.4 hospitals for every 100,000 residents. Onondaga County, by contrast, which includes Syracuse, has only 0.9 hospitals per 100,000, or 36 percent fewer buildings per resident. Considering the cost of constructing, maintaining and operating a hospital, that's a huge savings.
The pattern repeats itself in other areas, too. Duval County, Fla., (Jacksonville) also comes in at 0.9 per 100,000, while the Raleigh-Durham-Chapel Hill region of North Carolina registers 0.8 hospitals per 100,000.
Other areas checked have even higher numbers than Erie County's, but none was as bad as Niagara County, which has 2.3 hospitals per 100,000. Together, Erie and Niagara counties average a burdensome 1.7 hospitals per 100,000 residents. Factors such as age and overall health of the community obviously can influence the number of hospitals needed, but there is strong evidence that the insurance companies and other critics are dead on the money. We have too many hospitals.
More likely to die
Quality is harder to measure, partly because public statistics are scarce. But consider this: A hospital-rating project by Ford, General Motors and the United Auto Workers shows that people are more likely to die in Western New York hospitals than in hospitals in Atlanta, Cleveland, Indianapolis or Southeast Michigan. The study was nationally benchmarked and accounted for the influence of high-risk patients.
To be fair, the figures show that mortality rates in Western New York hospitals equal the national average 85 percent of the time. But, of the five regions in the comparison, Buffalo area hospitals have the highest percentage of cases where the mortality rate is worse than the national average. And the reverse is also true: This region has the second poorest showing among cases where mortality rates are better than the national average.
Those figures vary by procedure, hospital and even doctor, and they are unweighted -- that is, hospitals are treated identically whether they perform an acceptable minimum number of cases or many times that amount. Nor do the figures suggest that patients can't get good care in Western New York. But the bottom line is that, on average, a patient in a Western New York hospital is more likely to die than a patient in one of the other four regions.
Meanwhile, figures provided by Blue Cross and Blue Shield suggest that this region, compared to 15 others, also has significantly higher rates of admission and surgery, as well as longer stays, factors directly linked to excess capacity.
Insurers and some other knowledgeable observers say a large part of the problem is that doctors here resist adopting "clinical pathways," guidelines that standardize treatments for certain conditions, and that hospitals, worried that the doctors will take their patients to a competitor, are too cowed to insist upon them.
Copley, who is also vice president of the Erie County Medical Society, bridles at the pressure from insurers. The insurance companies, and the standardized procedures they push for, are directed toward financial concerns, not medical ones, he protested.
"Physicians are trained to be nonstandard," Copley said. They have a contractual obligation to their patients, and that requires innovation. "I will not make apologies."
Copley is not alone. His frustration with insurance companies reflects those turned up in a 2000 survey of physicians by The Commonwealth Fund, the Harvard University School of Public Health and Harris Interactive. The survey found that 56 percent of generalist physicians believe their ability to provide quality care declined over the previous five years. The number is even higher among specialists, including cardiologists.
Still, other hospitals, such as Rochester General and Strong Memorial, also in Rochester, have adopted those standardized procedures, bringing doctors into the process of developing them and giving them the freedom to deviate when they believe it is necessary. The result, officials at both hospitals say, is improved quality.
For the most part, hospital officials here don't directly argue the quality issue. They may say they are not familiar with particular numbers, or note that certain quality measures are improving, or complain that low reimbursements are part of the problem. All may be accurate observations, but they don't flat-out say the conclusions about quality are wrong.
The role of politics
Politics plays an important role in the deteriorating condition of hospitals, as well, and not just the governmental kind. Hospital politics, doctor politics and union politics are mixed up in the economic mess that hospitals have become. Perhaps most surprising -- and disturbing -- is the role that ethnic politics have played in pushing Western New York hospitals to the brink.
The reason this region has so many hospitals can be traced, at least in part, to the former practice of building a hospital in every neighborhood. In ethnically diverse regions such as Buffalo, that meant different hospitals for different ethnicities. More than just a geographic decision, hospital construction was also based on how your skin was colored or what accent shaded your speech.
For example, the old Deaconness Hospital on Humboldt Parkway was used mainly by Germans, said Dr. James Nolan, former chief of medicine at Buffalo General Hospital and Erie County Medical Center. Columbus Hospital, on the Lower West Side, was mainly Italian. Often what drove that issue, he said, was discrimination by hospitals against physicians, whose patients were typically of a similar background.
Other observers have other ideas about whether this division was the outgrowth of bald-faced bigotry or simple ethnic insularity or the practice of putting a hospital in every neighborhood. Regardless, it seems certain that at least part of the reason this region is saddled with so many expensive, cash-starved hospitals lies in the ancient urge of people not to associate with those who are different.
And the influence is still with us, though the catalyst has been purified from ethnic division to fierce, neighborhood loyalty. But while that kind of affection is easy to understand -- "My child was born at that hospital" . . . "Doctors at that hospital saved my father's life." -- it ultimately undermines the economic health of all hospitals in this region and, consequently, their ability to treat the sick.
Add to that cultural phenomenon the other, usual forces: doctors who become attached to a particular hospital, out of convenience or productivity or ego; administrators who are determined to protect or expand their market share; unions whose responsibility to their members may conflict with the best use of health-care dollars.
The result is a metastasizing inefficiency, deficient quality and a group of constituents who, for different reasons, seem devoted to maintaining both.
That includes the politicians, who often respond to public sentiment by hindering efforts to take the most obvious and necessary step to protect this region's hospital system: Some of them have to close. Nothing else makes sense.
TABLE: HOSPITAL MORTALITY RATES
Buffalo area hospitals rate worse than others on several standard procedures or treatments*
Percentage worse than expected or worse than national average
Southeast Michigan 1.7
Percentage as expected or at the national average
Southeast Michigan 78.7
Percentage better than expected or better than national average
Southeast Michigan 19.6
Percentages were calculated by The Buffalo News, based on
risk-adjusted mortality rates reported in the hospital profiling project done by Ford, General Motors and the United Auto Workers.
* The rates are for most relevant hospitals in each region (some
elected not to participate) in 1999 and include the following procedures or illnesses: bowel surgery, coronary artery bypass graft, cardiac angioplasty, cardiac valve procedures, chronic obstructive pulmonary disease, heart attack, heart failure, pacemaker, pneumonia and stroke.
Data are available at www.myhealthfinder.com. Click on "Ford, General
Motors, UAW Hospital Performance Report Buffalo Hospital Profile."
TABLE: THE BOTTOM LINE
Hospital losses: Western New York's private hospitals lost $29.5 million in 1997, according to Healthcare Association of New York State, then went on to lose more than twice that amount -- $71.9 million -- the following year. In 1999, the most recent year for which figures are available, losses were $47.2 million.
Low reimbursement rates: The hospitals say they would have $65 million more per year to invest in larger staffs and newer equipment if reimbursements here were the same as Rochester's, and $172 million more if rates were identical to those in Syracuse.
The phenomenon extends to Medicare rates. Hospitals in Rochester receive $2 million a year more than Buffalo, while hospitals in Nashville, Tenn., take in $53 million more.
TABLE: Too many hospitals, too little money
Erie County hospitals
Bertrand Chaffee Hospital, Springville
Erie County Medical Center, 462 Grider, Buffalo
Roswell Park Cancer Institute, Elm and Carlton streets, Buffalo
Sheehan Memorial Hospital, 425 Michigan Ave., Buffalo
Veterans Administration Medical Center, 3495 Bailey, Buffalo
Catholic Health System hospitals:
Kenmore Mercy Hospital, 2950 Elmwood Ave., Kenmore
Mercy Hospital of Buffalo, 565 Abbott Road, Buffalo
St. Joseph Hospital, 2605 Harlem Road, Cheektowaga
Sisters of Charity Hospital, 2157 Main St., Buffalo
Kaleida Health hospitals:
Buffalo General Hospital, 100 High St., Buffalo
Children's Hospital, 219 Bryant, Buffalo
Millard Fillmore Gates Circle, Buffalo
Millard Fillmore Suburban Hospital, 1540 Maple Road, Williamsville
Niagara County hospitals
Inter Community Memorial Hospital, Newfane
Lockport Memorial Hospital
Mount St. Mary's Hospital, Lewiston
Niagara Falls Memorial Medical Center
Kaleida: DeGraff Memorial Hospital, North Tonawanda
Hospitals per 100,000 residents
Erie County, 1.3 hospitals per 100,000 residents
Niagara County, 2.3 hospitals per 100,000
Onondaga County (Syracuse), 0.9 hospitals per 100,000
Duval County, Fla., (Jacksonville), 0.9 hospitals per 100,000
Raleigh-Durham-Chapel Hill, N.C., 0.8 hospitals per 100,000
Number of acute-care beds in service
Erie County hospitals Certified beds Beds in service % in service
Bertrand Chaffee Hospital 49 34 69.4%
Catholic Health System* 1,305 1,067 81.2%
Erie County Medical Center 281 199 70.8%
Buffalo General Hospital 637 501 78.6%
Children's Hospital 294 240 81.6%
Millard Fillmore Hospital 588 420 71.4%
Roswell Park Cancer Institute 218 119 54.6%
Sheehan Memorial Hospital 69 69 100.0%
Niagara County hospitals
DeGraff Memorial Hospital 135 85 62.9%
Inter Community Memorial Hospital 71 33 46.5%
Lockport Memorial Hospital 114 70 61.4%
Mount St. Mary's Hospital 159 100 62.9%
Niagara Falls Memorial 194 94 48.5%
*Includes all four Catholic hospitals
Source: Western New York Healthcare Association