Hospital Closure

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"Hospital Closure" Issue: Status quo not an option

For more than 20 years, the local business community has called for reengineering the delivery of health care in our region. Our objective: to improve the quality of care, and reign in ever-increasing costs to patients, taxpayers and employers. 

Efforts to achieve this through voluntary action have been unsuccessful.  That is why I see great opportunity in the recommendations of the Commission on Health Care Facilities in the 21st Century, and the $2.5 billion in state and federal dollars allocated to support their implementation.

The Business Council of New York State estimates the commission's recommendations would reduce Medicaid costs by an estimated $249 million a year, with similar savings for employers and other private purchasers of health insurance. Hospitals and other service providers would reap an estimated $721 million annually that could be used to help pay restructuring and other costs.

The recommendations will yield challenges for local hospitals as they?re implemented.  But our community will emerge in the near future with a health care delivery system that is stronger, better and more affordable.  That?s why the Partnership?s position on this issue has been, and is, that the status quo doesn?t work, and isn?t an option.

It?s important to keep in mind these recommendations were not developed by people with no ties to health care or Buffalo Niagara, but by representatives from our region, and experts in the delivery of health care services.  The commission was mandated to be sensitive to local needs throughout its deliberations, and was comprised of statewide and regional members (nine total from our region), and a regional advisory committee representing Bufalo Niagara that included representatives from local hospital systems.

Some other key points to consider, as you wade through the media reports and listen to various opinions about the recommendations:

Cost/Affordability ? Excess capacity is expensive. Empty beds and buildings that are underused and understaffed have fixed costs that must be paid, even as they are spread over a diminishing number of patients.  Dollars that are spent to maintain excess capacity are dollars that are being diverted from the recruitment of physicians, health care workers, information technology and state of the art medical technologies. 

Quality - In health care there is a direct positive relationship between volume and quality of care.  The more cases and procedures a physician or hospital performs, the better the outcomes.  Excess capacity disperses volume and expertise, which reduces quality.  We need to create a critical mass of programs and services at our facilities to establish the level of clinical excellence this community deserves.

Access ? Both a declining population, and the fact that health care services are rapidly migrating out of large institutions and into ambulatory, home and community-based settings, affects the occupancy rate of hospital beds. We need to reallocate resources from underused hospitals to meet the need for additional home and community-based services. 

New Technology - When hospitals in a region compete for expensive and sophisticated technologies that produce higher financial margins, there is an unnecessary duplication of services.  Further, our community misses out on important advancements that can improve care and outcomes. We need to create the environment where integration and collaboration can eliminate redundancies and allow for greater investments in new leading technologies.

Redeveloped Workforce - There are persistent shortages in a variety of health care occupations including registered nurses, pharmacists, home care attendants and other paraprofessionals.  We need to support a significant effort to retrain the relatively few displaced hospital workers to prepare them for the increasing uses of advanced health technologies, and to redeploy the existing workforce to fill vacancies in the health care sectors that are being created by the shift in delivery of health care services. The Partnership has already discussed this need with the Workforce Investment Boards in Erie and Niagara Counties.

The commission's full report (which is quite lengthy?but there is an executive summary worth reviewing) is available at www.nyhealthcarecommission.org.

As always, I welcome your comments.

Sincerely,

Andrew J. Rudnick

President & CEO