Fewer Hospitals, More Worries: What Medical Mergers Mean for Healthcare in NYC

These days the Mount Sinai Health System (MSHS) name and logo are omnipresent in Manhattan with a few outposts in parts of Brooklyn and Queens. Appended to pre-existing hospital and health-care facility signs – New York Eye and Ear Infirmary, St. Luke’s-Roosevelt Hospital, Beth Israel Hospital, many dozens of group medical practices, urgent-care centers, testing labs, and diagnostic and imaging centers – they are the outward manifestation of New York’s (and the country’s) rapidly changing health-care delivery environment. But the changes go far beyond mere names and signage; they represent the corporatization of one of our most basic services.

One recent change, the announcement in late May that MSHS will close or significantly downsize its Mount Sinai Beth Israel Hospital over the next four years, has sent a shockwave through lower Manhattan. Neighborhoods such as Chelsea and the West Village, which are still reeling from the health-services void left by the closing of St. Vincent’s hospital in 2010, will now have additional challenges as geography coupled with Manhattan traffic result in longer—perhaps life-threateningly long—trips to emergency rooms attached to far-away full-service hospitals.

The loss of Beth Israel means there will be no full-service hospital between the financial district’s New York-Presbyterian/Lower Manhattan Hospital, and the private NYU/Langone and public Bellevue Hospital in the east 30s or Mount Sinai West in the west 50s. It has local residents and politicians shaking their heads and demanding answers.

Yet this is not merely the tale of a business decision, although that’s part of it. One look at the locations of closed hospitals – generally outside Manhattan in poor, ethnically diverse parts of town – tells a story of New York’s haves and have nots. While some hospitals, like Brooklyn’s Bay Ridge Hospital and Queens’ Little Neck Hospital, have been converted to nursing homes or senior housing to meet changing demographic needs, many more are now either co-op apartments or have been demolished completely. Brooklyn’s recently shuttered Long Island College Hospital is in limbo. The result is fewer hospitals, and in particular fewer independent hospitals to serve a growing population.

Among the questions raised by local lawmakers as a result of the closing of St. Vincent’s Hospital and now Beth Israel is this: Just who is seeing to the health-care needs of the many different communities that make up New York City?

“In the past decade, 13 major hospitals have closed in New York City, and the closings have had a tremendous detrimental impact on local communities who rely on these safety-net providers,” said City Council Member Corey Johnson, who chairs the Council’s Health Committee and whose 3^rd Council District covers the West Village and Chelsea, in a telephone interview with City Limits. “Government at all levels needs to be making decisions that look out for Americans and New Yorkers. We can’t be driven by profit and that’s the horrible—in some instances amoral—guiding force here. St. Vincent’s served the poor on the entire west side of Manhattan. Beth Israel absorbed that patient load.”

Liz Solomon’s mother lived in the same building on 11^th street for 70 years. In 2007, at the age of 90, she fell and had to be taken to the hospital. “She was in intense pain,” recalls Solomon, who, like EMS, was summoned by her mother’s medical alert device. Solomon has relived the short ambulance ride to the now closed St. Vincent’s many times. “It was 5 p.m. on a Friday and a traffic-on-steroids nightmare. It’s horrible to imagine how much additional pain my mother would have had to endure had she had been forced to go across town to Beth Israel. And now what? Bellevue? Roosevelt? Or whatever they call it now?”

A land of giants

The looming closure of Beth Israel is only the latest in a long series of earthquakes and aftershocks that have shaken New York’s massive systems of private and public healthcare.

MSHS, which includes Mount Sinai Hospital and the Icahn School of Medicine at Mount Sinai (ISMMS), began expansion beyond its main Yorkville campus in 1999 with the purchase of Astoria General Hospital in Queens, which it renamed Mount Sinai Queens. In 2013 MSHS put the kibosh on a deal between the financially strapped Continuum Health Services – owner of Beth Israel, the New York Eye and Ear Infirmary, St. Luke’s-Roosevelt Hospital, Long Island College Hospital, and the Brooklyn Hospital Center – and NYU/Langone Medical Center by making its own preemptive deal. Mount Sinai could have suffered mightily if NYU/Langone had gained the upper hand and won the title of New York City’s largest health-care provider.

Long-time man about the city Stanley Brezenhoff was the Chairman and CEO of Continuum Heath Partners who struck the deal with MSHS. Tony Shorris was Chief of Staff at NYU/Langone who handled negotiations with Continuum before MSHS stepped in at the last minute and derailed the deal. Shorris, now Mayor de Blasio’s first deputy mayor and Brezenhoff, now Chairman of the New York City Board of Corrections, worked together at the Port Authority

But MSHS is not the only medical colossus in town.

The New York Presbyterian system, affiliated with Columbia University, includes the College of Physicians and Surgeons, Columbia University Medical Center, Weill-Cornell Medical Center, Weill-Cornell Medicine, the Allen Hospital, the Morgan-Stanley Children’s Hospital, Lower Manhattan Hospital, Lawrence Hospital in Bronxville, Hudson Valley Hospital in Cortlandt Manor, New York Presbyterian Queens in Flushing, New York Presbyterian Westchester in White Plains, and dozens of affiliated physician specialty practices and community health organizations.

NYU Langone Medical Center, affiliated with New York University, includes NYU School of Medicine, Tisch Hospital, the Rusk Institute of Rehabilitation Medicine, the Hospital for Joint Diseases, and Brooklyn’s NYU Lutheran Medical Center. Also under its umbrella are more than thirty ambulatory facilities in Manhattan, Brooklyn, Queens and Long Island along with scores of affiliated medical practices and testing and diagnostic facilities.

And Staten Island is served by Staten Island University Hospital, an affiliate of the Northwell Health System. Bronx residents rely on service provided by Bronx Lebanon Hospital Center, Montefiore Medical Center, and the St. Barnabas Health System.

Of the three major Manhattan-centric power players, MSHS is the only one not part of a college or university.

But why do patients and consumers need to know something about this confusing organizational structure? “Just let me get my check up, have my flu shot, treat my diabetes, get the kids immunized, have my parents screened for dementia,” you say. “I have enough trouble understanding my health insurance policy. And why does it matter that all our hospitals are run by one or just a few companies?”

Here’s why: Although hospital mergers are not new, such broad consolidation into city-wide and regional systems is.  Patients and doctors are not happy and entire sections of town have been left without adequate health services. Some who study the business of health care aren’t happy either because consolidation, or corporatization as some critics label it, is creating disturbances in the way primary, specialty, and hospital care is dispensed and to whom.

Continuum’s Long Island College Hospital was not part of the Continuum-MSHS deal and was closed in 2013. Plans and promises to replace it with another health-care services facility for Brooklyn’s Cobble Hill and surrounding area have yet to materialize. Meanwhile, Lenox Health Greenwich Village, the stand-alone emergency facility that is now housed in one of St. Vincent’s former buildings, has been criticized for charging high prices for very routine care. The facility is part of the Northwell Health System (formerly North Shore – Long Island Jewish Health System) and those who need hospitalization will be transferred to its Manhattan affiliate Lenox Hill Hospital on 77^th and Lexington unless otherwise specified. (St. Vincent’s hospital itself has been replaced by the residential Greenwich Lane. Price of apartments? Don’t ask!).

Bigger is … well, bigger.

Proponents of hospital consolidation maintain that multi-hospital and multi-practice systems provide patients with unprecedented access to the best care by combining everything under one umbrella. It is, they say, a necessary remedy to rising costs, sicker and aging populations, and the cost-cutting, efficiency, and patient-outcome demands of the Affordable Care Act. They cite the anticipated positive effects on both patient care and the bottom line.

In a press release issued about the changes coming to Beth Israel, Dr. Ken Davis, president and CEO of MSHS said: “For several years, we have been transforming the Mount Sinai Health System toward a new model of care, where we focus on keeping entire communities healthy and out of the hospital, and Mount Sinai Downtown is a dramatic next step that will enable us to improve access and increase quality by providing care for residents of downtown Manhattan where they live and work.”

Advances in medicine do drive some of the rationale for eliminating hospital beds. For example, a friend of the author’s had an open-heart, triple bypass operation earlier this year at Weill-Cornell Medical Center and was home fending for himself in less than a week. That wouldn’t have been the case even 15 years ago. But while technical advances mean that at least some medically-necessary hospital stays are shorter or can be eliminated altogether, or that some surgery can be performed in so-called ambulatory surgical units, it doesn’t mean the need for primary and even secondary care doesn’t exist on an even greater scale. In fact it makes it even more important. Yet the business model at the heart of consolidation is the very thing that is forcing doctors to choose specialties rather than primary care.

Indeed, studies reported in professional journals such as Medical Economics and Modern Healthcare, by health-care focused foundations such as the Robert Wood Johnson Foundation, and the Kaiser Family Foundation, and news outlets such as the Los Angeles Times and the Washington Post, do not support the “bigger is better” mantra. They show that hospital consolidation may actually increase costs as services get shifted from individual doctors’ offices to multi-specialty hospital-based outpatient departments. A report published by the Conservative think tank the Manhattan Institute also demonstrates that consolidation stifles competition and isn’t necessarily a barometer of good patient outcomes. Gone are options for what the doctor considers the best patient care or for choice by either party.

Professor Leonard Rodberg, Chairman of the Department of Urban Studies at Queens College (CUNY), notes that studies show the argument for an increase in efficiency is false—that costs go up. “Hospital consolidation just gives hospitals and their computer systems more power over physicians, reduces contact between doctors, patients, and colleagues, and adds to the alienation felt by primary-care doctors,” says Rodberg. “Bigness for bigness sake doesn’t improve patient care. Primary care, the all-important entry point to regular and preventive care is becoming inadequate, and all the financial models lead medical students to choose specialty rather than primary care. Primary care doctors spend twice as much time and money to meet the requirements of the new systems, and it harms the quality of their work because it’s not inner directed,” he says. “Also, less time with a patient means you miss patient signals.”

Assemblyman Richard Gottfried of Manhattan says one of the reasons for “accelerating hospital consolidation is the need for providers to have enough market clout to bargain with increasingly consolidated insurers. Hospitals can’t group together the way workers in a union do because that would be an anti-trust violation. But they’ve discovered that if they’re part of a larger entity they have more bargaining clout. Otherwise you have situations like St. Vincent’s.” Gottfried noted that St. Vincent’s tried to form a network with other Catholic hospitals around city, but when those hospitals went belly up, St. Vincent’s was saddled with their debt. That situation was made worse when the network collapsed and they were only hospital in Manhattan that was not part of a network. As a result they couldn’t get good insurance deals and commercial health insurers were paying them less than Medicaid.”

It’s true that hospitals are not the only ones in the health-care business who are merging. According to Families USA, a consumer health-care advocacy group, “last July, four insurance giants announced proposed mergers. Anthem is proposing to purchase Cigna, and Aetna to purchase Humana. A merged Anthem-Cigna would cover 53 million people, and a merged Aetna-Humana would cover more than 33 million people. Together, these merged companies, along with United Health Group’s approximately46 million insured consumers, would concentrate the coverage of 132 million lives in just three companies. These proposed mergers come at a time when the vast majority of commercial health insurance markets are already highly concentrated, and when the Medicare Advantage markets (in which all of the merging companies also participate) are also highly concentrated.”

The doctors aren’t in

Private-practice doctors affiliated with, but not practicing at the component hospitals of various systems in New York say they are seeing even more red tape than before, not only for themselves and their staff, but for patients. Many are worried about the overall impact on their patients. (Those affiliated with Mount Sinai, NYU/Langone, and NY Presbyterian interviewed for this article would agree only to speak on background because they feared professional repercussions.)

Of the seven physicians interviewed, four primary-care doctors (three in Manhattan and one in Queens), and three Manhattan specialists (an ear, nose, and throat doctor, a cardiologist, and a rheumatologist), all said they felt constrained and caught in a downward spiral that continues to erode the delicate doctor-patient relationship by adding even more layers to an already bloated system.

One cardiologist talked about the hoops he has to jump through just to act as a patient advocate when additional specialty care and further tests are needed. He added that the more time he has to spend navigating the bureaucracy, the less time he can spend with or on behalf of a patient. A primary-care doctor in Queens noted that his hospital’s bureaucracy looked upon their other borough facilities as a backwater. And one ear, nose, and throat specialist said that a patient’s interests may lie beyond what is available within a single, albeit large and comprehensive system.

Critics also point out that the reputation of the main hospital brand (Mount Sinai, NYU/Langone, and NY Presbyterian) is no guarantee that practitioners at component hospitals are of equal caliber.

Dr. Oliver Fein, an internist affiliated with NY Presbyterian/Weill-Cornell, says “the upside for patients may be the ability to transfer between component institutions and more access to quaternary care,” meaning experimental medicine or uncommon diagnostic or surgical procedures.

“Networks of physicians and services are narrower and there are (geographic) communities that are not getting into those networks,” Fein adds, as hospitals jettison services in poor neighborhoods because they aren’t profitable.

“One major concern,” says Dr. Steffie Woolhandler, a primary-care physician, professor at the City University of New York (CUNY), the Albert Einstein College of Medicine, Harvard Medical School, and a spokesperson for Physicians for a National Health Program (PNHP) “is that the poor are being completely shut out of the healthcare system.” Dr. Woolhandler notes that Medicaid and private patients are seen in segregated settings in private hospitals and the uninsured are not welcome at all.

Dealing with the still-uninsured

Such segregation combined with the inability of the uninsured to access care in a private hospital means that the loss or merger of hospitals puts greater strain on the city’s public hospitals. The Affordable Care Act (ACA) was supposed to address many of these problems, but has actually made things worse in New York City. “One out of 12 patients in Manhattan alone is still uninsured,” Dr. Woohandler said.

Through a program known as Disproportionate Share Hospital (DSH), the United-States government provides some reimbursement to hospitals that treat indigent patients. DSH payments to New York City’s public hospitals were removed when the ACA went into effect on the assumption that the expansion of Medicaid, along with the ability to buy insurance on New York’s Health Exchange would drastically reduce the number of uninsured. But as Mayor Bill de Blasio pointed out at a press conference when he presented his budget at the end of April, the ACA means the city now gets less money to reimburse hospitals for the care they provide to the uninsured because undocumented immigrants, for whom the public hospital system is the only real source of care, were never factored into the equation. “The federal government does not recognize the existence of undocumented people, and we end up paying,” de Blasio said.

City hospitals do get reimbursed for patients covered by Medicaid, but that payment can take years to be collected. “Really neat trick, to owe us money and not pay us money,” said the mayor.

The need for better access to primary care is a reason Gottfried has sponsored a bill to create a single-payer health insurance system for New York State. The Assemblymember argues that primary and preventive care have a lot to do with how long we live. “Yes, we need the high-tech stuff, but if the result is the withdrawal of resources from primary and preventive care, that seriously undermines the health care system.”

Is there a cure?

A new report by patients rights watchdog MergerWatch grades each state on its hospital oversight laws and the way it protects community access to health care. According to their website “a robust Certificate of Need (CON) Law ensures that the affected community is notified about a proposed hospital merger and has an opportunity to comment, and requires state regulators to consider those comments and the potential impact on patients’ access to care if the merger were approved.” Lois Uttley of MergerWatch has “concerns about the way New York’s system fails to take consumers into account and doesn’t hold public hearings in the communities affected by consolidation.” With the current system in New York consumers first have to understand the state’s very complicated oversight system, and then figure out way to get on the agenda.

Chuck Bell, Programs Director for the Yonkers-based Consumers Union told City Limits in a series of emails “that it’s very, very difficult to undo a merger once it has happened – you can’t unscramble the egg. And, relatively few transactions get the detailed scrutiny they need.”

Bell emphasized the need for “ongoing public and regulatory oversight…and reducing barriers to entry for new potential competitors and service providers. “It’s really important that community activists speak out…hold health providers accountable on better population health, better consumer experience of care, provided at lower total cost, for all people in all neighborhoods. If consolidation of ownership becomes a barrier in any of those areas, we should blow the whistle and address it head on.”