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Western New York's health care dilemma Quality of care suffers when there are too many hospitals, but no one wants the one in his neighborhood to close

Do we want numerous mediocre hospitals, or do we want fewer hospitals that can invest sufficiently to deliver world-class care in the long term? Most people would willingly drive an extra mile or two to seek care where they have a better chance of surviving. The problem is that no one wants to see a hospital in their neighborhood close.

The Buffalo-Niagara Falls region has too many hospitals. Many hospitals in the region are underutilized and, as a result, are facing financial strains that have made it difficult for them to maintain adequate staffing at the bedside, acquire modern equipment, upgrade facilities and retain and attract top-flight clinical staff.

On Dec. 1, when the New York State Commission on Health Care Facilities in the 21st Century (aka the hospital closing commission) issues its recommendations, the names of the hospitals targeted for closure will be big news. That is when it will be important to remember that it doesn't matter which adult, acute-care hospitals are closed, particularly in downtown Buffalo, where they are so close together.

What matters most is whether or not we actually succeed in closing enough hospitals. A rising tide will float all boats, so if we close enough hospitals, the remaining hospitals will be able to afford to hire more nurses, modernize plant and equipment and retain and attract more high-quality specialists.

A regional advisory committee proposed last week that three major hospitals be closed. And study after study has concluded that this region has too many hospitals for its own good. But as a region, we have failed repeatedly to act responsibly to address the problem. Here is a list of some of those studies:

* In February 2001, a Buffalo News editorial series, "Quality Care Fading Away," concluded that maintaining too many Western New York hospitals is eroding quality of care.

* In August 2001, a HealthNow (a division of Blue Cross & Blue Shield of Western New York) study concluded "Buffalo hospital leaders have long acknowledged that there is an overcapacity issue in the market" but "the problem is larger than the previously accepted local perceptions."

* In October 2001, a Buffalo Health Care Task Force study conducted by Cap Gemini Ernst & Young concluded that there is "agreement that there is excess capacity."

* In April 2002, a federal Department of Housing and Urban Development study, "Healthcare Inpatient Capacity Analysis, Buffalo-Niagara Falls, New York," concluded that capacity should be reduced by 1,585 beds and that this reduction should come from hospital closure.

* In November 2004, Gov. George E. Pataki's Health Care Reform Working Group initial recommendations suggest, "The competitive pressures and loss of revenues in the acute care system associated with out-migration of services to alternative providers have meant excess inpatient capacity and a struggle to maintain quality core services."

* In April 2005, a New York Times article about hospital overcapacity in Buffalo was titled "Half-Empty Hospitals in a Shrinking City."

This February, the Commission on Health Care Facilities in the 21st Century issued a study that concluded that health care industry "mega-trends support the need to restructure and right-size the delivery system" statewide to be "more flexible and less costly than one that is heavily based on physical infrastructure."

In a presentation to the Niagara Health Quality Coalition's membership on Sept. 8, David Sandman, Ph.D., executive director of the commission, emphasized that hospital capacity utilization in Western New York is much worse than even the New York State average, which is already too low.

> A long-standing problem

Most telling are the comments by Buffalo's hospital system CEOs themselves, who have all said publicly that excess capacity exists and is a long-standing problem. For example, William D. McGuire, the retired chief executive of Kaleida Health, told the New York Times in 2005, "Debt is the principal obstacle to closing hospitals." He added, "We're kingdom builders as a group: I've got to have more beds than you do. I've got to have more hospitals than you do. I've got to have the biggest empire."

Because this problem has remained largely unaddressed for more than two decades, hospital quality has been constrained and many hospitals have amassed a mountain of debt with very little to show for it. Under the weight of this debt, Western New York hospitals have merged into large systems to enable them to negotiate higher prices, to garner more political clout and to save themselves from bankruptcy.

Many people are under the mistaken assumption that all hospitals are about equal in quality or that a hospital good at one thing must be good at everything. Nothing could be further from the truth. In spite of mergers and a considerable increase in debt at area hospitals, quality remains uneven. A quick review of area hospital quality in the New York State Hospital Report Card, which is available at no charge on www.myHealthFinder.com, shows wide variations in quality, as the chart above shows.

Increasingly, health care competition is becoming regional. Hospital centers in cities like Cleveland, Pittsburgh, Boston, Erie, Pa. and Rochester aggressively advertise to attract profitable Western New York patients. And some insurers are happy to pay for our area residents to receive care outside of the region because it can be more affordable, even at world-class centers. By losing profitable patients to other regions, hospitals in Western New York are left with a higher percentage of uninsured, less profitable patients. This leaves them less able to fund their programs.

Currently, the number of patients seeking care for complex procedures elsewhere is relatively small, but patients are becoming much more savvy about where to find high quality care, and increasingly they are realizing that they have choices in and out of the region.

> Taking an interest

In the first week after publication of the New York State Hospital Report Card, the myHealthFinder.com Web site exceeded 3 million hits in one day and averaged 15,000 discrete users per hour for extended periods.

People are learning that it is smart for them to get involved in their health care decisions just as it is necessary to keep an eye on your own financial investments. It is true that high quality care can be found in this region for nearly all types of services, but variations in quality remain unacceptably high at our hospitals.

What will it take for the commission's plan for hospital right-sizing to work in Western New York? For this to happen, several hurdles must be overcome and people must be willing to work together.

First, the commission's recommendations must be sound. Enough hospital locations must be targeted for closure to make the remaining hospitals strong. Closure recommendations must serve the community, for example by providing continued access to the underserved and uninsured. Commission deliberations must be free of undue influence by special interests. The plan should bolster competition. And the recommendations must be implemented in a way that will keep the problem from recurring.

Second, the state and federal government must deliver Western New York the resources they promised to support the commission's recommendations. State and federal funding must favor those regions where the excess of capacity is greatest.

Some are advocating that funding from the commission should flow to each of the six New York State regions, not based on where the commission identifies a greater excess of hospitals, but rather based on each region's population. While this appears to be a "balanced" distribution of funding, it is not fair given the commission goals. Western New York hospitals have very high debt loads, and the area will not be able to close enough facilities to make a difference without sufficient debt relief flowing in harmony with the recommendations from the commission.

Third, any recommendations from the commission will be painful, and for some stakeholders, any plan to close any hospital would be unacceptable. What we as Western New Yorkers must remember is that we pay the bill. These are our hospitals, and they should act in a way that serves the community as a whole rather than preserving the self-interests of any single system.

> A bold plan

As government continues to increase debt instead of using fiscal restraint to solve its problems, it is seeking more ways to shift the cost of basic services like health care to individuals so it can make higher debt payments without increasing taxes. Simultaneously, many employers are implementing consumer-directed health plans, Health Savings Accounts and reduced benefit structures within existing plans that force individuals to shoulder more of the cost of their own health care.

Thus, even the more fortunate among us with health insurance are paying more of the cost, and for those without health insurance, the prospect of paying more and getting less for our hospital care is simply not acceptable.

We need a bold plan from the commission with real reductions in the number of hospitals and a commensurate reduction in the total debt held by our hospitals. We need fair and adequate funding from government to make the commission's plan feasible. And we need to recognize that the plan will not be perfect, and that in fact it will be painful.

Finally, we need to recognize that if we do nothing, it will be you and I, and our children and grandchildren, who will suffer the consequences. "Too many hospitals" is not someone else's problem anymore.

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