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Falls hospital to cut services Financial problems force 're-invention' to focus on types of care most needed in area

Mounting financial strain has forced the city's hospital to look at cutting some medical services.

Officials of Niagara Falls Memorial Medical Center say they plan to change their focus to "core" services -- a move needed as uncompensated care continues to take its toll on the hospital balance sheet.

In what they call a "re-invention," they said they expect the hospital to continue to provide such services as cardiac, stroke and renal care, the areas where they see the highest patient need.

"We can't be everything to all people, so we're going to have to skinny back," said Joseph A. Ruffolo, the hospital's president and chief executive officer.

A consultant's report expected by the end of next month will help officials decide where to cut and will confirm or refute their beliefs on what direction to take, Ruffolo told The Buffalo News.

The hospital's grim financial picture compels action.

After losing $38 million from 1996 to 2002, Memorial has lost nearly $4 million more in the last two years.

During the past five years, the hospital has invested $30 million in capital improvements -- including the Heart Center of Niagara, an expanded emergency room and other programs in such areas as diabetes, sports medicine, women's health and brain and spine injuries.

Hospital officials have asked the state for $5 million to help cover the cost of more than $12 million in uncompensated care the hospital provided last year and so far this year.

Lawmakers predict that could be a tough sell in a state with a budget hole in the billions of dollars.

"We're not anxious to cut services," said Dr. Mark D. Perry, a member of the hospital's board of directors and chief of the radiology department. But to help the facility survive, "we have to find that new revenue stream," he said.

Dr. Michael E. Merhige, medical director of the Heart Center of Niagara, said the hospital has been forced into trimming services because so many of its patients can't pay for their treatment.

More than half of patients who come to its emergency room are unable to pay full charges or are on Medicaid. The same goes for about a third of all hospital patients.

An admittedly frustrated Merhige said he believes the health care system needs to be reformed to reward hospitals providing services that improve a community's health.

If hospitals were judged by the effectiveness of their treatments, the medical center would receive additional funding because it has helped reduce the rate of cardiac death in Niagara Falls, Merhige said.

He supplied the following statistics:

Before the heart center opened, Niagara County had one of the highest cardiac mortality rates of any county in the country.

Heart attack deaths in the hospital are down nearly two-thirds since the heart center opened in 2003.

Work at the center has saved insurance companies 25 percent on every dollar spent on heart care.

But insurance companies haven't reflected those savings in reimbursement rates to the hospital, Merhige said.

A merger with a health system also could aid the hospital.

Hospital officials have met with leaders of Kaleida Health several times during the past year, although a full-asset merger never has been discussed, Ruffolo said.

The timing of such an action "isn't good," he said, since Kaleida has a number of other high-profile projects on its plate.

The hospital already works with Kaleida, which provides some laboratory services to the hospital.

Other avenues would increase the hospital's revenue under reimbursement programs, but patients have no incentive to enroll in those for which they qualify, hospital officials said.

Every newborn child is eligible for benefits under the state program Child Health Plus, Ruffolo said. A mother merely has to make a phone call to get the insurance, but many fail to do so.

Laws prevent the hospital or a patient advocate from filing the forms for the patient, so the hospital loses available funding even though the patient doesn't lose out on the care.

Whichever services do get cut, the hospital will work with the state Health Department to link patients with other providers in the area, Ruffolo said.

The closing earlier this year of the hospital's Bridges adolescent mental health unit involved such coordination.

Now, some patients 12 years old and younger receive treatment from Buffalo's BryLin Hospital, while children older than 12 are treated in Erie County Medical Center.

Medical center official says the transition for patients has been smooth.

In addition to the expected focus on renal, cardiac and stroke care, the hospital expects to look at diabetes care as an area of need, especially because of the area's aging population.

The hospital is awaiting word on its application, filed earlier this month with the state Health Department, for a 17-station dialysis unit.

Hospital officials, meanwhile, said they also plan to make their consultant's findings widely available.

Don J. King, a member of the medical center's board of directors, said hospitals will look very different in five to 10 years, and hospital leaders will have to be visionary.

After all, they have cut the equivalent of 100 full-time jobs just in the past year and remain on slippery financial footing.

"The system's broken," King said.

e-mail: abesecker@buffnews.com

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