Since adopted into law at the end of last year, the recommendations of the Commission on Health Care Facilities in the 21st Century, or the Berger Commission as it”™s better known, have triggered a number of lawsuits from health-care employee unions and facilities that have been slated for closing or downsizing.
Not every targeted facility is approaching the changes with dread, however. The picture is surprisingly positive in Ulster County, where the plan for consolidation of Benedictine and Kingston hospitals, both located in the city of Kingston, is steaming ahead. The progress is all the more remarkable given that Benedictine Hospital is a Catholic institution, and that a decade ago an attempted merger between the two was abruptly dropped because of community dissatisfaction about the handling of reproductive services, which are currently provided at nonsectarian Kingston Hospital.
The Berger Commission was assigned by former Gov. George Pataki to analyze and devise a plan to reform New York state”™s troubled hospital sector. The commission outlined a dysfunctional system in which bloated institutions saddled with spiraling costs compete on the basis of filling their beds rather than meeting the true needs of their patients, putting an unnecessary burden on taxpayers. Insurance companies charge low reimbursement rates unrelated to the hospitals”™ costs and services to the poor have shrunk because they aren”™t profitable. To fix the problems, the commission recommended the closing of nine hospitals and restructuring of dozens of others, with affected institutions required to comply by Dec. 31.
In Ulster County, hospital executives have long been preparing for the change: the boards of both institutions have been talking to each other for six months, and both they and lawmakers and representatives worked closely with the Berger Commission while it was formulating its recommendations.
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Time to retool
That”™s not to say there aren”™t bumps in the road. While the Berger Commission recommendations include a provision that reproductive services must continue to be provided in a separate facility adjacent to Kingston Hospital, there”™s concern in the community about whether that option ensures full care and also questions about the handling of other related issues, such as family planning and end-of-life treatment. Another major question is whether funding from the state and federal governments will be sufficient to cover the costs of the consolidation by the two hospitals, both of which are mired in debt.
Despite these concerns, there is no recourse but to move ahead. “If we did nothing and let the chips fall where they may, it would be devastating to the community if one of the hospitals closed down,” said Thomas A. Dee, chief executive officer and president of Benedictine. “This is an opportunity to do something special and very unique, which could be a model for the state and ultimately over time improve the quality of care here. It”™s about reducing redundancy and also about building new services. I see it as the retooling of our work forces.”
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Michael Kaminski, CEO and president of Kingston Hospital, added that the “realignment,” as the two men characterized the plan, would create the critical mass needed to solve one of the institutions”™ biggest problems ”” people migrating outside the area to receive care. For example, both hospitals now have cardiology labs, but they are limited in scope. By forming one lab, the menu of services could be expanded to include angioplasties, which aren”™t available in Kingston.
One difference the hospitals have with the Berger Commission”™s recommendations is the reduction in beds. The commission suggested capacity be reduced from the current level of 370 beds to 250 to 300 beds. Kaminski said the hospitals were inclined to seek a limit of 350 to 375 beds, given that both facilities were full during the preceding winter months. Plus, he foresees a need for more capacity in the near future as the new consolidated facility ramps up its quality of care.
“In two years, as we consolidate our services and improve care we”™ll begin to look at reversing the 10,000 patients going outside the area,” Kaminski said. Another factor is the changing nature of hospitals: while 10 years ago 15 percent of the beds were in intensive care, Kaminski predicted this number would change to 50 percent five years from now, given the current trend toward more ambulatory settings, which means hospitals increasingly serve only the seriously sick or injured.
Regardless of the ultimate bed count, both men said they didn”™t see staff layoffs as part of the plan. “We staff up to the volumes of patients we”™re seeing and there”™s no reason to expect those volumes to decrease,” Kaminski said.
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Special arrangement
Both hospitals have approved a memorandum of agreement to create a parent corporation that would oversee the boards of both institutions, which will maintain their separate identities and missions; revenues will be shared through the parent, which will also make joint decisions about capital budgets and the expansion and contraction of services, Dee said.
A consulting firm, Weiser L.L.P., has been hired to review, analyze and evaluate the clinical programs at each facility and identify those that might be integrated, dropped or expanded. Its findings are expected to be available in July.
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The memorandum specifies three services that will be prohibited at the partially Catholic-run hospital: abortions and male and female sterilizations. As mandated by the Berger Commission, these operations will be performed at a separate building that will be connected to Kingston Hospital by a covered walkway. Other types of ambulatory surgeries, related to ophthalmology, ear, nose and throat specialties, and podiatry, will also be performed at the facility, which will be operated under state Department of Health rules as an Article 28-certified facility and run by a subsidiary corporation called Kingston Health Services. Its revenues would be managed separately.
That arrangement concerns the members of the newly formed citizens”™ group Health Care STAT, which fears the locating of reproductive services in a separate building might compromise the quality of care. “When you”™re out of the mainstream, there”™s a diminishment of quality,” Health Care STAT member Sam Magarelli said. “There”™s a vulnerability. If we agree to something now we”™re not optimistic about, five years down the line it”™ll be difficult to make a change or cut back.”
The group, some of whose members actively fought the previous attempt at a merger, also objects to what it alleges is the memorandum”™s “enormous paragraphs and sections that guard and protect Benedictine with very minimal references to protecting the secularity of Kingston Hospital,” Magarelli said. Also not adequately addressed are the differences in approach of the two philosophies regarding contraceptives and family planning, end-of-life issues, and stem cell therapy, he said.
“We”™d like to have our lawyers look at the agreement and tell us what kinds of safeguards exist,” he said. “We”™re not accepting this facility as a solution to the problem.”
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State, fed money allocated
Assembly member Kevin Cahill, D-Kingston, took a different view. The memorandum only prohibits abortions and sterilizations, which means a full range of other related services would be allowed to be provided at the consolidated facility. And a separate facility for reproductive services doesn”™t necessarily connote a sacrifice of quality of care. “I”™m less concerned by this concept of proximity than with the integration of health care,” he said.
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The guaranteed solvency of the operation is absolutely vital, he said. “You have to ensure they don”™t go begging with a tin cup and that there”™s no threat of closure, which means having good profits,” he said. Folding reproductive services into a full menu of ambulatory services is a way to help achieve this, given that Kingston Hospital doesn”™t make money on abortions. Kaminski said the facility performs 150 to 175 abortions and sterilizations annually, compared with 2,000 to 3,000 operations by ophthalmologists, ENT doctors and podiatrists.
As for funding, the state has allocated $1 billion through its Health Care Efficiency and Affordability Law for New Yorkers (HEAL-NY) to pay for the restructurings; the federal government has allocated another $1.5 billion. However, no payments are being offered to any of the hospitals until they comply with the Berger Commission findings ”” an alarming situation, according to state Senator William Larkin, R-Cornwall.
“The Berger Commission made a major error in saying here”™s what you have to cut without providing the dollars up front,” Larkin said. He noted that Kingston-Benedictine requested $1 million of HEAL money “but they can”™t get it. They”™re being told to borrow.” All in all, “I think some of the commission”™s recommendations are great, but somebody on that commission should have sat down and said to the hospitals, ”˜How much do you owe?”™ They”™re walking a tightrope.”
Just what will the realignment cost? Dr. Eugene Heslin, chairman of the board at Kingston Hospital, has cited $75 million, an amount that would wipe out each hospital”™s long-term debt of $25 million and provide $25 million for the consolidation costs. Calling that number “the ideal, perfect solution,” Cahill said it”™s unlikely the full amount would be available, but he”™s nonetheless optimistic the necessary funds would be forthcoming given the hospitals”™ willingness to work with the Berger Commission and their alacrity in creating an affirmative plan. So far, the due diligence has cost $1 million and the separate ambulatory surgery facility has an estimated price tag of $2 million, he said.
The hospitals are in the process of submitting grant applications to the state Department of Health, which is evaluating them on a case-by-case basis. “We”™ll fund as much of everybody as we can,” said Health Department spokeswoman Claudia Hutton. “There”™s always some institutions that ask for everything, including the kitchen sink, and there”™s not enough for the kitchen sinks. We believe we have adequate funding to take care of the most pressing needs.”
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Dr. Eugene Heslin and the chairman of the board at Benedictine, William Le Doux, will appear at a series of public forums to update residents about the realignment plan and get feedback. The first forum, moderated by Assemblyman Kevin Cahill, will be held at the Ulster County Office Building in Kingston on April 26 at 7 p.m.
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