As Hospitals Consolidate, Health Consumers Must Have a Voice

Posted July, 9 2018 by Taylor Frazier

Guest post by Lois Uttley and Emma Chessen.

Remember St. Vincent’s Hospital in Manhattan, now the site of luxury condos? How about Millard Fillmore Gates Hospital, now an assisted living facility? Or Cornwall Hospital, which was gradually dismantled as an inpatient facility and replaced with outpatient care? Perhaps you were a patient of Amsterdam Memorial Hospital, which was closed in 2014 and converted into an ambulatory surgery center. Wonder what’s happening to community hospitals all over New York?

If so, you are not alone. Over the last 20 years, 41 New York hospitals have closed all of their inpatient services, affecting consumers across the state. Many of the remaining hospitals, particularly smaller community hospitals, are joining large health systems. In fact, the 12 largest health care systems now control half of all acute care hospitals in the state and 70 percent of the inpatient acute care beds.

Why is all this hospital consolidation happening? One cause is the movement of medical care into outpatient settings, leaving unneeded hospital beds. Another factor is the rise of complicated reimbursement schemes that require the sophistication of a large hospital system. Some urban hospitals are suffering financially from treating a high percentage of patients who are uninsured or have Medicaid, as opposed to better paying commercial insurance, and receive inadequate government support for serving these patients.

What does consolidation mean for consumers? Hospitals joining systems often argue that quality of care and financial stability will be improved. But, hospital consolidation can have negative consequences for affected consumers. Local hospitals that join large systems are sometimes downsized, closed or transformed into outpatient facilities. Patients needing advanced care may be referred to academic medical centers located an hour or more away. Decision-making often shifts to out-of-town system executives who don’t know the community and the specific health needs of the local population. Consolidation can also cause the price of health care to go up.

With such significant consequences for patients, it’s important that consumers have a say when their local hospitals are proposing mergers or other types of consolidation. But all too often, that doesn’t happen, according to year-long study MergerWatch recently completed with the support of the New York State Health Foundation. Our report, “Empowering New York Consumers in an Era of Hospital Consolidation,” concluded that New York’s 54-year-old Certificate of Need (CON) system of state hospital oversight needs to be updated to ensure that consumers are notified and engaged when their local hospitals propose to join health systems or plan to downsize, close or transform the way they deliver health services.

MergerWatch’s recommendations include requiring public hearings in affected communities prior to hospital closings or elimination of key services, such as maternity care or the emergency department. MergerWatch urges that when health systems are taking over local hospitals, they should be required to disclose whether services might be downsized or transferred elsewhere in the system, and predict whether the transaction might cause the price of health care to go up. The report also recommends changes to the New York State Department of Health website to make it easier for consumers to find information about proposed hospital consolidations and submit comments.

The report urges a stronger voice for consumers in state decision-making through increased consumer representation on the state Public Health and Health Planning Council (PHHPC), which considers the most important hospital transactions. The PPHPC has only one consumer seat, and it has been vacant since 2016, while the majority of council members (including the chair) are employed by hospitals and other health providers. By contrast, in New Jersey and Maryland the majority of hospital review board members are consumers and in Delaware, the chair of the review board must be drawn from the “public at large.”

As hospital consolidation continues around the state, MergerWatch hopes to see an improved and more transparent state review process that informs, engages and carefully considers comments from the consumers whose health care will be dramatically affected. Want to learn more about our findings and recommendations, and get involved in helping improve the system? Join our webinar on July 19 at 2 pm.

Lois Uttley, MPP, lead author of the new report, is founder of MergerWatch and Director of Women’s Health for Community Catalyst. She serves on the steering committee of Health Care for All NY. Emma Chessen, co-author of the report, received her Master’s in Public Health in May from Columbia University’s Mailman School of Public Health.