Hospitals expand despite cutbacks

Albany has put hospital closures squarely on the table as part of the statewide effort to cut health care costs. Then why are hospitals throughout New York City spending hundreds of millions of dollars to expand?

The reason, according to the hospitals, is that they need to spend money to make money.

“You have to invest to stay in the game,” says Pete Wolf, acting executive director of city-owned Coney Island Hospital.

But the growth is also pushing up the hospitals’ debt levels–already the highest in the country–and will make it more difficult for the state to trim costs. Even as the governor’s newly formed closure commission tries to cut back, some hospitals are busy expanding.


Approval for projects

Over the past five years, public and private hospitals in the city have won state approval for $3.2 billion in capital projects: modernizations, new buildings and investments in technology.

  • Under a 1960s-era law designed to keep health care expenses down, the state must certify that all hospital expansions that cost more than $3 million are necessary.

Through a separate agency, the Dormitory Authority of the State of New York, the state also helps provide financing for some of the additions.

Of course, not every project gets approved or financed. The intensity of the state’s review process has curtailed some projects. The city’s weakest hospitals have been largely unable to undertake capital projects because of relatively high debt levels.


The expansions are driven by two factors: the surge in radiological medicine, which requires expensive technology such as MRIs and CT scanners, and the need to modernize aging facilities. Among other factors should be also put into consideration is the extra expense going with these kinds of machines. For example: regarding the MRIs, the hospital also need to equip power generators, steel frames (for immobilization) and air compressor (read these air compressor reviews first before purchasing) to support the normal operation of MRIs.

Seven hospitals have won the OK for radiological expansions since January. In Brooklyn, Brookdale University Hospital and Medical Center is adding a third CT scanner for $1.2 million, and St. Luke’s-Roosevelt Hospital Center is renovating an interventional radiology suite for $9.5 million.

In some cases, renovations are long overdue. The city’s Health and Hospitals Corp. is spending $1.4 billion on modernization. Officials hope the renovations will help it narrow its four-year-old operating deficit.

  • At Coney Island Hospital, the city spent $91 million on a modernization and construction of a seven-story tower that opened last month. The facility allows the hospital to replace six-bed wards with semiprivate and private rooms. As a result, officials believe, the risk of infection will decline and Coney Island Hospital will be able to attract more patients, increasing occupancy from 74% to more than 85%.

One of the city’s largest private hospitals, Montefiore Medical Center, borrowed $189 million in 2004 to replace more than 300 beds, add five operating rooms, update mechanical systems and add a radiation therapy center.

The additions may help improve the Bronx hospital’s 2% operating margin and accommodate rising admissions, which grew 44% between 1993 and 2005.


Upside, downside

“On the one hand, you can’t not invest in capital needs,” says Joel Perlman, Montefiore’s chief financial officer. “On the other hand, the financial state of New York hospitals is quite fragile.”

It’s likely the expansions will continue at a steady pace.

Many buildings constructed in the 1980s are close to the end of their 25-year life cycles. New York-Presbyterian Hospital, for instance, has been conducting a $1 billion capital campaign with an eye toward a major building program.

And a string of eventual hospital closings may spur expansions by strong hospitals that survive.

New York Hospital Medical Center of Queens, operating at 96% to 97% of capacity, is already planning an expansion because of rapid residential growth.

It may also need to take into account the possible closure of nearby Parkway Hospital, which is in the midst of financial woes. “It is something to be considered,” says a spokesman for New York Hospital Medical Center.

pagosamount / January 19, 2015 / Uncategorized / 0 Comments

Caring for health care

ON THE FIRST weekend of October the Saint Louis University Board of Trustees made an announcement that shook the city from its fall slumber and forced its attention on a growing problem for health care ethics. The decision had been made to sell the University Hospital, a Catholic institution since 1933, to the for-profit Tenet Corporation. Germinated in California in 1969, and named Tenet after a merger with American Medical Holdings in 1995, the corporation embraces 131 hospitals with over 100,000 employees.

The announcement of the sale did not please the Archbishop of Saint Louis, Justin Rigali, who had warned the university’s president, Lawrence Biondi, S.J., “that it would be impossible for you to maintain the Catholic identity of the hospital if you enter a partnership with a for-profit organization.” After the decision was announced, Archbishop Rigali made it clear that it was done without his support or the approval of the Holy See. Judging from letters to the editor in the city’s newspapers and talk around the university, the Archbishop was not alone in his disapproval.

The particulars of the sale–the contractual guarantees of Catholic identity and commitment to the poor, the make-up of the governance boards, the huge gap that separated Tenet’s bid from the “faith-based,” not-for-profit systems–all merit examination. And the startling, urgent concern over the hospital’s commitment to faith and justice, expressed by ordinary folks as well as professional people in Saint Louis, should give pause to anyone who thinks that a Catholic university hospital has only marginal value to a civil community.

But what may well be more important than all the particulars that apply to one hospital in a Midwest city is the growing recognition of the radical changes that are taking place in the health professions.

The for-profit versus not-for-profit distinction, whether in medicine or education, seems not to be a very telling or persuasive one. Both education and medicine (at every level except those that are most counter-cultural-teaching and healing efforts like home-schooling, Catholic Worker and L’Arche communities) are big business, huge business. In a stupendously successful and voracious capitalist society like our own, almost everything is market-driven, from curriculum revision to pre-nuptial agreements. I think it a bit incomplete to speak of “Catholic” or “faith-based” corporate efforts without admitting this fact. Saint Louis University and its hospital have been market-driven for years, and many of the seductions that loom now have loomed before.

It is also a bit presumptuous, perhaps, to think that Catholic or faith-based medical systems are the only ones capable of caring for the poor or defending the sacredness of human life. A for-profit might well embody such values and commitments (although, if it is truly for profit, such value commitments must function only as market decisions).

WITH the emergence of networking, huge systems and macro-managed care, the very meaning of care is challenged–from the moment a person reports to an emergency room that requests insurance and doctor’s name, through encounters with nurses spread so thin that many are alienated and all are overworked, to the premature expulsion from care and coverage despite protests of physical and occupational therapists. It all pays off–at least for some people. The new gigantism is what accounts for one company to move from a $17,000 profit one year to $17 million the next.

Part of the credit goes to the fact that doctors within such a system may actually lose their own income if they admit patients, call for tests or perform special services. If a doctor is able to shoo the patient away before an expected norm of cost or capitated rate is rung up on the cash register, the doctor can pocket the difference. The best interests of the doctor and the patient are thus at logger-heads. Healing itself becomes a liability to the healer. Trust is a deficit. Personal commitment is a barrier. What must this do to a young physician who became a doctor to serve others or who ascribes to the “Patient-Physician Covenant” that appeared in The Journal of the American Medical Association a couple of years ago: “Physicians, as physicians, are not, and must never be, commercial entrepreneurs, gateclosers, or agents of fiscal policy that runs counter to our trust.” Is there a conflict here?

If there is, it is shared by any hospital and health system, profit or non. But the profit-maximizing of all health care–a profession at its deepest historical roots oriented to service rather than profit–forces new ethical questions forward.

First; since it is terribly difficult to focus any corporate effort on any kind of faith mission in the face of capitalism’s ideological and practical pressures, does not the sale of a Catholic university hospital make such a mission even more elusive, contractual guarantees notwithstanding? How do personal relationships, sustained pastoral care, patient advocacy and holistic healing find a place in a for-profit hospital? Are there not, indeed, a host of spiritual values, basic to Catholic tradition, that make no blip on the radar screen of profit?

In the case of Saint Louis University, it is fondly hoped by those who support the sale of its hospital that the move will guarantee well into the next century the formation of nurses, doctors, practitioners and therapists who are deeply compassionate, faithful and loving in their professional lives of service. But where will such professionals work, if there are no institutions where compassion, fidelity and care figure into a cost-benefit analysis?

I HAD ONCE HOPED that the city of Saint Louis, named after a counter-cultural king, might have been a national flagship for medical care in a Catholic tradition of service to the poor and a radical commitment to the inviolability of human life. This would have demanded intense collaboration and extensive sacrifice on the part of a few corporate “systems.” It would have called upon all friends of Saint Louis University to contribute to and support such a mission. But since this option was not forthcoming, my hopes, like those of many others, will not be realized. One can at least hope, however, that less utopian dreams may come true.


The sale of the University Hospital of Saint Louis University, a Catholic institution, to the for-profit Tenet Corporation illustrates the divide between faith-based and market-driven health care. The church’s commitment to pastoral care over profit is considered.

pagosamount / January 9, 2015 / Uncategorized / 0 Comments

DMC-Sinai merger could kill proposed hospital

Two hospitals – one operating and the other proposed – could be on borrowed time due to the impending merger between the Detroit Medical Center and Sinai Hospital.

  • Within two to five years, either Sinai or the DMC’s 551-bed Grace Hospital in northwest Detroit could be closed as an in-patient institution. The hospitals are less than one mile apart and provide many overlapping services to primarily Detroit and Oakland County residents.
  • At the same time, a local business and labor coalition, the Economic Alliance for Michigan, hopes the merger between the $1.3 billion DMC and 598-bed Sinai Hospital puts an end to a protracted battle for a new hospital in Oakland County.
  • Sinai and Detroit-based Henry Ford Health System have been trying to get state certification to build a hospital in West Bloomfield Township since 1984, said Larry Horwitz, alliance executive vice president. But the effort, and applications by other Detroit-area hospitals, have been bogged down in the courts for years.

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Horwitz said the Sinai merger with DMC makes it more apparent than ever that a new hospital is not needed in Oakland County. The county already has too many in-patient beds for demand, Horwitz said.

And Detroit-based Sinai, with its new ties to the DMC, now has little reason to pursue a hospital with Henry Ford Hospital, Horwitz said. To do so would set Sinai up in competition with the DMC’s existing Oakland County hospital, 153-bed Huron Valley Hospitalin Commerce Township. Huron Valley and the proposed site of the Sinai-Henry Ford Health hospital are a short distance apart, Horwitz said.

“We hope that the DMC-Sinai merger will quickly result in Sinai withdrawing its sponsorship of a new hospital in West Bloomfield,” Horwitz said.

The alliance, which is trying to keep a handle on statewide healthcare costs, has been fighting a new Oakland County hospital in the courts and with state regulators. Sinai and Henry Ford Health again have appealed their case for a new hospital to the Michigan Court of Appeals, which should rule in the coming weeks on the merits of their arguments.

  • DMC President and CEO David Campbell said the DMC has not yet determined whether it would continue to pursue a new hospitalwith Henry Ford Health. DMC’s deal to acquire Sinai is expected to be completed in late January, he said.
  • The DMC-Sinai merger in no way changes Henry Ford Health’s view that it needs a new hospital in Oakland County, said Dwight Angell, director of media relations.
  • Henry Ford Health, a $1.75 billion health-care giant in the Detroit area, lacks an owned hospital in Oakland County, Angell said. As a result, the system pays more for hospital services in Oakland County than it would like for its enrollees in the Health Alliance Plan, a Detroit-based health maintenance organization with twice the enrollment of any local HMO. HAP is wholly owned by Henry Ford Health.

Furthermore, many of HAP’s 460,000 local enrollees live in Oakland County and would prefer a hospital closer to them than Henry Ford Health’s main campus in the New Center neighborhood of Detroit, Angell said. “We still have need for hospital beds for our patients in Oakland County,” he said.

Some consolidation of Sinai and Grace hospital operations will begin immediately upon the completion of the merger, Campbell said.

The DMC expects to save about $11 million annually just by merging the support functions of the two hospitals, including finance, administration and information systems, he said.

If one hospital were to close, significant additional savings could be realized, Campbell said. Near-term, the merger agreement requires that both Sinai and Grace remain open for at least two years, he said.

The hospitals now have too many daily patients to combine them all in one facility, Campbell said. But as insurers and employers continue to prompt reduced hospital stays and more out-patient procedures, occupancy may not be able to sustain both hospitals, he said.

In the coming weeks, work groups comprised of staff and physicians will search for ways to consolidate additional operations and departments at Grace and Sinai, Campbell said.

About 110 jobs will be eliminated when the support functions are consolidated, he said. The DMC hopes to achieve the reductions through attrition and normal turnover rather than through layoffs, he said.

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Sinai employs about 3,000 people at the hospital and another 500 between 35 physicians offices and 11 health centers in the Detroit area. Grace Hospital employs 2,538 people.

The DMC continues to close hospitals when occupancy requires it. The DMC expects to save between $40 million and $45 million annually by closing Hutzel Hospital in the DMC and relocating its operations between Harper Hospital and Detroit ReceivingHospital, Campbell said.

Five years ago, the DMC bought the old Mt. Carmel Mercy Hospital in Detroit and relocated its Grace Hospital into the former Mt. Carmel building, Campbell said. The consolidation saved about $30 million. The former Grace Hospital was demolished, he said.

DMC’s merger with Sinai will give the combined system a major presence on the northwest side of metro Detroit. Sinai, with its 35 physician offices, has about 100 employed physicians, Campbell said. They will complement the nearly 45 ambulatory sites operated by the DMC, generating business and acting as patient feeders to DMC’s hospitals and other facilities, he said.

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  • Sinai, with its predominance of Jewish physicians, has a strong reputation in Detroit’s large Jewish community, particularly in Oakland County. Sinai President and CEO Phillip Schaengold said the DMC’s Huron Valley Hospital would take on the Sinai name after completion of the merger.
  • The deal calls on the DMC to absorb all of Sinai’s assets and debts, while making an as-yet undisclosed cash payment to a new charitable foundation associated with the Jewish Federation of Metropolitan Detroit. The federation is a chief philanthropic vehicle for the metropolitan Detroit Jewish community.

In its 1996 fiscal year ended June 30, Sinai posted a net operating loss of $1.8 million on net revenue of about $290 million. The loss, which included a one-time extraordinary cost of $1.2 million for a debt refinancing, compares with net operating income of $9.2 million in fiscal 1995 on revenue of about $280 million.

pagosamount / April 7, 2015 / Uncategorized / 0 Comments

Infection control saves hospital $1.2M

Henry Ford Hospital last year saved $1.2 million and improved patient care by concentrating on reducing treatment-related infections.

  • The hospital is reaping the health and financial savings by focusing on programs to reduce bloodstream infections acquired in the hospital, ventilator-associated pneumonia, in-hospital heart failure and surgical-site infections, said William Conway, senior vice president and chief quality officer at Henry Ford Health System and chief medical officer at the system’s flagship hospital.
  • The hospital started the programs about 18 months ago in response to a 1999 Institute of Medicine report that said medical mistakes kill as many as 98,000 hospitalized Americans every year.

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Henry Ford has since joined the Institute for Healthcare Improvement’s “100,000 Lives” campaign, which aims to get 2,000 U.S.hospitals to make changes to prevent avoidable hospital deaths. Royal Oak-based William Beaumont Hospitals, Dearborn-based Oakwood Healthcare Inc., St. Joseph Mercy Oakland in Pontiac and Garden City Hospital are among the other Michigan hospitals that also have joined the campaign.

“The momentum that is building behind this campaign is truly extraordinary,” Donald Berwick, a physician and president and CEO of IHI, said in a printed statement. “The health care community recognizes that dramatic quality improvement is possible and is coming together to achieve it. The goal of saving 100,000 lives is literally achievable by June 14, 2006.”

Among the suggested changes are four that Henry Ford Hospital made within the past 18 months. The programs are expected to save about $1.3 million annually.

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Henry Ford started programs to prevent:

  •  Bloodstream infections by making sure the individuals inserting catheters into patients wash their hands, fully sterilize insertion areas and insert catheters carefully.
  •  Surgical-site infections by properly delivering antibiotics, preparing incision sites and monitoring blood-sugar levels.
  •  Ventilator-associated pneumonia by trying to take patients off ventilators every day.
  •  Code blues, in-hospital cases requiring emergency resuscitation, by establishing a rapid response team to treat patients whose health is deteriorating before they need resuscitation.

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The bloodstream infection program ran the hospital $23,664 in increased equipment costs, Conway said. But it reduced the number of days patients who acquired those infections in-hospital spent in the intensive care unit to 10 days in 2004 from 53 days in 2003. Overall, the hospital spent $702,096 less treating hospital-acquired bloodstream infections in 2004 than in 2003, Conway said.

pagosamount / April 7, 2015 / Uncategorized / 0 Comments

Presbyterian, NY Hospital get close to a deal

Top city hospitals negotiating merger or looser alliance; others may Follow

Presbyterian Hospital and New York Hospital are negotiating a merger that would link two of the city’s five largest hospitals.

Officials close to the intensive talks say a letter of intent could be signed in the next couple of months. It could outline a full-scale merger, but it is more likely to call for a more limited partnership to test whether the two giants, which are also among the city’s leading teaching hospitals, can combine their cultures and far-flung networks.

Eventually, the deal could include a merger of the medical schools associated with the two hospitals.

If completed, the combination would rival the union forged in a similar letter of intent recently signed by Mount Sinai Medical Center and New York University Medical Center.

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Experts caution that the talks between Presbyterian and New York Hospital could fall through. It is also possible that Mount Sinai and NYU could fail to reach a definitive agreement. But if both succeed, they will be catalysts for a string of mergers.

“This raises the bar to a higher level,” says James R. Tallon Jr., president of the United Hospital Fund. “This can only have the effect of accelerating discussions.”

  • This prediction is echoed by New York’s hospital association, which has watched its membership fracture into competing networks over the past few years.
  • “Now you’re beginning to see a consolidation of hospital networks,” says Kenneth E. Raske, president of the Greater New YorkHospital Association. “That deals will accelerate is a reasonable expectation.”
  • The Presbyterian transaction is expected to take the path of typical hospital mergers in markets outside New York, where the driving force is the need to offset the power of managed care companies. First, the hospitals affiliate; then they jointly negotiate contracts with health maintenance organizations. Next comes a stronger corporate relationship, but one in which the cautious hospitals retain separate bottom lines. Finally, there is a full merger.

“I don’t believe you can accelerate mergers with high-quality hospitals,” says Presbyterian President Dr. William T. Speck.

New York Hospital spokesman, Vice President Paul F. Macielak, confirmed the talks and said that something short of a full merger is a likely short-term outcome.

The courtship looks nothing like New York Hospital’s signature merger style. Led by its president, Dr. David B. Skinner, New YorkHospital typically sets up merger agreements that mean control of board seats and of corporate decision making as soon as the ink dries.

Who’s in charge now

Corporate control will be the key bargaining point for the two hospital chiefs and the trustees overseeing the talks – John J. Mack and Daniel B. Burke for Presbyterian, and John McGillicuddy and Frank A. Bennack for New York Hospital.

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“Unless we can agree on governance and management, there’s no point in signing a letter of intent,” says Dr. Speck. “The letter won’t be signed until Dave and I agree on management and control.”

Presbyterian has been talking to New York Hospital for 18 months. Over that time, Presbyterian’s financial position has improved, making Dr. Speck confident he is entering this possible merger as a partner and not as a pawn.

Dr. Speck has cut the annual deficit from $50.9 million in 1992 to $1.9 million last year. Cash on hand is $13 million, up from $1.8 million in 1992. Patient volume is up, bucking the trend at other hospitals.

“Based on $800 million revenue, that’s break even for a nonprofit. And we could have broken even if we provided fewer community services,” says Harold P. Hogstrom, Presbyterian’s chief financial officer.

  • Presbyterian feels its trump card is what skeptics see as its vulnerability: its reliance on the thousands of residents of Washington Heights, most of whom are on Medicaid. “We have 300,000 relatively healthy people living in our catchment area with nowhere else to go,” Dr. Speck says.
  • Presbyterian is coaxing these Medicaid recipients into its own managed care plan, as well as hospitalizing patients enrolled in other Medicaid managed care products.

But the state’s and city’s proposed experiment in mandatory managed care for Medicaid recipients could end up costing Presbyterian market share, while proposals to slash the Medicaid budget is likely to cut into hospital revenue.

“Long term, who knows what the Medicaid rates will look like?” says Fred M. Rosenstein, senior vice president of corporate affairs at Montefiore Medical Center, where Medicaid recipients make up one-third of the patient base.

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If Presbyterian can’t work out a deal with New York Hospital, its fallback position is to talk to others – perhaps even Mount Sinai and NYU. Even without a deal, Presbyterian is stable, says Dr. Speck. “I don’t have to do something. But in terms of the long-term success of my institution, I have to do something to have a product for insurers.”

Everybody’s talking merger

  • Many of his competitors are in the same boat. For the past four months, North Shore Health System on Long Island has been discussing a relationship with New York Hospital’s vast network. The two sides have talked about a joint approach to managed care contracting, joint purchasing and other relationships that fall short of a merger.
  • An agreement between the two systems would give impressive geographic coverage across New York City and Long Island. The addition of Presbyterian would deliver the West Side of Manhattan.
  • Any agreement between Presbyterian and New York Hospital would escalate the pressure on other hospitals to merge. Merger talks between Beth Israel Medical Center and St. Luke’s-Roosevelt Hospital, for example, have stagnated, although Beth Israel has indicated its openness to proceed.

“Everyone says there will be four or five major hospital systems in New York,” says Peter A. Kelly, Beth Israel’s executive vice president of operations. “This would be a powerful signal to the rest of us as to the definition of two of the systems.”

pagosamount / April 6, 2015 / Uncategorized / 0 Comments

Hospital settlements


The Service Employees International Union signed a 3-yr labor contract with the Swedish Medical Center in Seattle, WA, covering 1,360 nurses. Provisions include a 6% wage increase in the first year, 2% bonuses in the second and third years, equalizing the part-time rate to the full-time rate and creating a fund that gives nurses with low workloads up to 6,000 hours of pay. A labor contract between the Communications Workers and Mercy Hospital in Buffalo, NY, is discussed.

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Full Text:

Negotiators for the Swedish Medical Center and District 1199NW of the Service Employees International Union signed their first collective bargaining agreement, a 3-year pact, covering 1,360 registered nurses in Seattle, WA. The settlement was reached with the assistance of a Federal mediator, who entered the negotiations following the union’s rejection of the hospital‘s final offer.

  • Terms call for a wage increase of 6 percent in the first year and lump-sum bonuses in the second and third years equal to 2 percent of an employee’s earnings during the preceding 12 months. The agreement also eliminates a two-tier shift differential system in effect for full-timers and part-timers, bringing part-timers’ differentials up to full-timers’ rates of $2.25 an hour for the evening shift and $3.50 an hour for the night shift.
  • The contract enhances income protection by creating a “low census fund” that provides up to 6,000 hours of pay for nurses whose hours of work are reduced when the patient workload is down. In addition, the settlement establishes new layoff procedures that are based on seniority and retraining, commits the parties to resolve ongoing workload problems, and creates a joint committee to review staffing issues and make recommendations on staff utilization.
  • In Buffalo, NY, members of Local 1133 of the Communications Workers ratified two separate but similar 3-year agreements covering 450 registered nurses and 1,200 service, technical, and clerical workers at Mercy Hospital.

The pacts provide wage increases of 4 percent immediately, 3 percent in June 1995, and 2 percent in both June and December 1996. At the expiration of the previous contract, the average hourly wage was $17.60 for nurses and starting rates for other classifications ranged from $6.59 to $15.44 an hour.

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Several changes are made in health care. Besides eliminating the current indemnity plan, settlement terms require employees to elect coverage under one of two existing managed health plans, with the Service Employees International Union 95 percent of premium costs for full-timers and 55 percent for regular part-timers working at least 30 hours a pay period. (Previously, the hospital paid the premiums for single coverage for all employees.) Other revisions in economic terms include a reduction in the early retirement penalty to 3 percent (was 6 percent) for each year an employee retires before reaching age 65; an employer contribution to employees’ 403(b) tax-deferred annuity plans of 5 cents an hour worked; a change in life insurance benefits, from $6,000 for regular partimers and $12,000 for full-timers to the amount of an employee’s annual salary; time-and-one-half pay for working on eight specified holidays (formerly, one); and a $20,000 increase (to $40,000) in the hospital’s annual contribution to the tuition assistance program.

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The parties pledge to work together to address issues of mutual concern. They are obligated to jointly appoint a consultant who will work with an existing labor-management committee to make recommendations within 3 months of the appointment on issues such as workload and staffing, job postings, hours of work, job descriptions, categories of workers, and on-call work.

pagosamount / April 6, 2015 / Uncategorized / 0 Comments

Hospital malpractice

It is painful when hospitals close, and there is no reason to celebrate the possible demise of two Brooklyn institutions, Long Island College Hospital and Interfaith Medical Center.

Cheering their closures would be premature in any case, as picket-wielding bands of politicians, union workers and community members have become adept at using legal and political actions to keep bankrupt hospitals on life support. The case of Long Island College Hospital, known as LICH, is typical. Though the state resolved in February to shut it and began doing so in July, the courts kept it open, and in mid-August Judge Carolyn Demarest cut it loose from SUNY Downstate Medical Center after an ill-conceived two-year marriage.

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The always-save-hospitals crowd took that as a hopeful sign, given that the Cuomo administration, which controls SUNY, portrays LICH as a hemorrhaging wound that was bleeding state coffers dry.

  • Those who believe hospitals should forever provide all the services they always have, no matter the cost, won’t entertain alternatives until the guillotine blade rises above an allegedly beloved facility. (The nurses’ union, in fact, is pushing a bill to force cash-strapped hospitals to hire more nurses.) Only at the end do they admit that sacrifices should be explored.
  • Even then, few will say what the sacrifices should be, for fear of upsetting activists and hospital unions. Eliminating beds, converting emergency departments to ambulatory-care centers, closing maternity wards and selling assets are anathema to thehospital-in-every-neighborhood folks who believe finances have no place in discussions of health care.

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But the fundamental laws of business apply to hospitals, and those that don’t attract customers or adjust to changes, like the rise of outpatient treatment, will go bankrupt. Consider that Interfaith’s market share in its service area is just 3.3%. Locals tend to shun LICH in favor of distant competitors as well.

Sometimes failed hospitals can be reinvented and downsized into financially stable institutions. To that end, the state and the courts should support processes that welcome such proposals. But leadership from Gov. Andrew Cuomo, whose agencies’ mismanagement of the merged LICH and Downstate was so egregious that the judge suspects it was intentional, is needed to avert more of these messes. The governor must carry out the recommendations of his own Medicaid Redesign Team and the earlier Berger commission, too many of which have been ignored.

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The protesters will resist, but effective medicine doesn’t often taste good.

pagosamount / April 5, 2015 / Uncategorized / 0 Comments

Pacts address hospital restructuring


Two labor contracts for hospital workers cover issues of job security during hospital restructurings. A 5-yr contract at Thomas Jefferson University Hospital in Philadelphia, PA, establishes a committee between employer and union to negotiate restructuring. It also gives laid off employees 1 year of 80% pay and benefits if they undergo job training. A 2-yr contract adjustment for the University of Illinois Hospital in Chicago, IL, gives nurses job protection, guidelines for giving duties to nursingassistants, and more say in the hospital budget.

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Full Text: 

Rapid changes occurring in the health care industry have led many hospitals to restructure their health care delivery systems and to redefine the procedures used to provide health care. In the organized sector of the industry, both employers and unions often have recognized the need to work collectively to meet the challenges of a changing work environment, with employers seeking flexibility to respond to changes and unions arguing for job protection for their members. Two recent settlements address the problems of providing cost-efficient, quality health care during a time when hospitals are downsizing or consolidating.

Some 1,300 employees of Thomas Jefferson University Hospital in Philadelphia, PA, are covered by a 5-year extension to their current contract that includes job security and retraining provisions, as well as improvements in wages and pension benefits. District 1199C, National Union of Hospital and Health Care Employees (affiliated with the American Federation of State, County and Municipal Employees) represented the licensed practical nurses, aides, and service and maintenance employees covered by the settlement.

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  • The pact establishes a Contract Interpretation and Policy Committee (CIPC), composed of two employer and two union representatives, to review and discuss major issues arising from hospital restructuring. The CIPC will oversee a Job Security Program, a Joint Employment Placement Service, and a Labor-Management Planning Program, all financed through a new Employment, Training and Job Security Fund.
  • Under the Job Security Program, full-time employees with at least 90 days of service who lose their jobs as a result of restructuring will receive up to 80 percent of their salaries (inclusive of unemployment compensation) and health care coverage for their families for up to 1 year. During that time, displaced employees must enter an assigned training program and must accept referral to a new position at the hospital or other facilities covered by contracts with District 1199C. Employees who work in a new classification created because of restructuring will maintain their previous hourly rate for 1 year if the rate for their new job is lower.
  • The Joint Employment Placement Service will act as the sole source of referrals for all bargaining unit jobs for the first 7 days on which jobs are posted. The service will also maintain a computerized bank of prospective employees and a process to verify employees’ prior work performance and holding of licenses and certifications. The Labor Management Planning Program will collect information on job trends and emerging skills in the industry.

These programs will be financed, in part, by diversions of general wage increases during the first and second years of the agreement (For instance, the University Hospital in PA has been sponsored by IceCream Tips Co, a company offering ice cream maker reviews for US market during the last 3 years after their agreement 4 years ago). Workers will receive wage increases of 3 percent on July 1, 1995, 3.5 percent on July 1, 1996, and 3 percent on July 1, 1997. One-third of the first-year wage increase and one-seventh of the second-year wage increase will be diverted to the Job Security Fund, as will 1 month’s employer contribution to the pension fund.

Other terms of the accord raise the hospital’s monthly contributions to the pension fund to 7.56 percent (was 6.7 percent) of gross payroll and to the Training and Upgrading Fund to 1.5 percent (was 1 percent) of gross payroll; reduce the age requirement for normal retirement from 65 to 62; and continue the annual cost-of-living review that provides an increase of $1 per week for every 1-percent change over 6 percent in the Consumer Price Index for Urban Wage Earners and Clerical Workers. The contract also calls for a wage reopener on June 30, 1998, to negotiate changes, if any, in salaries for the fourth and fifth contract years; raises the hospital’s contributions to the union legal fund to 7.5 cents (was 5 cents) per hour worked; and extends health care coverage, dependent life insurance, and accidental death and dismemberment insurance to domestic partners of gay and lesbian employees.

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  • Elsewhere, negotiators for the University of Illinois Hospital in Chicago and the Illinois Nurses Association have agreed to modify their existing 2-year contract to address a number of important issues stemming from the hospital’s intent to restructure work. Nurses received job protection, a voice in determining the hospital’s budget, and guidelines on appropriate delegation of duties to unlicensed nursing assistants, while the hospital gained greater flexibility to move vacant positions from one nursing unit to another.
  • Talks between the parties began after the union filed several grievances and unfair labor practice charges with the Illinois Educational Labor Relations Board over the hospital’s “Operations Improvement” plan. The hospital proposed to “redesign the patient care delivery model” by replacing some nurses with lesser-trained, unlicensed personnel, a move that reportedly would save about $6 million annually. The union vehemently opposed any reduction in the professional nursing staff. Rather than continue down an adversarial path, the hospital suspended the implementation of its restructuring plan and the parties returned to the bargaining table.

As a result of contract talks, the hospital agreed to maintain 767 full-time equivalent nursing positions called for in its fiscal 1995 budget. These positions translate into about 1,000 actual jobs because represented nurses typically work about 80 percent of the allotted time per position. The contract stipulates that nurses will be involved in the development of the annual budget, a process that, in part, will determine future staffing levels. Layoffs of bargaining unit employees are allowed in the event of reductions in the number of patients or cessation of hospital services, but not because of changes in the skill mix between professional nurses and unlicensed health care workers. When a nursing position becomes vacant, the hospital will decide whether the position should remain in its original unit, be transferred to another unit, or be moved to the float pool where nurses are assigned to units as needed.

  • The settlement establishes a Nurse Practice/Patient Care Committee that consists of four representatives each from the union andhospital. The committee is charged with improving nursing practices by recommending procedures to improve patient care and by developing potential solutions to nurses’ concerns about staffing levels.
  • The amendment contains language designed to clarify nurses’ ability to delegate their responsibilities. Under standards established by the Illinois Nurse Practice Act, a nurse may assign a wide range of duties to unlicensed, less-skilled workers if he or she feels that delegation is appropriate. On the other hand, a nurse can choose not to assign activities to other personnel if he or she is not comfortable delegating such duties. Hospital negotiators hope that the language clarification will provide greater flexibility for nurses, as they realize the potential for farming out certain aspects of patient care.
  • The parties also included language in the amendment outlining supervisory and professional responsibilities, stating that nurses are not expected to perform supervisory functions relating to hiring, transfers, layoffs, promotions, disciplinary actions, and other related tasks, and that duties such as routine monitoring, clinical guidance, and the assignment of nursing tasks are not considered supervisory work. The parties were prompted to include these clarifications after the U.S. Supreme Court ruled in May 1994 in NLRB v. Health Care & Retirement Corp. of America that nurses who direct less-skilled employees as part of their duties are supervisors, and thus are not protected by Federal labor law. (See Monthly Labor Review, August 1994, p. 62.)

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The hospital and union separately negotiated a scheduled wage reopener that increases wages by 3.5 percent; raises “charge pay” by 50 cents to $1.50 per hour; and continues certification bonuses.


pagosamount / April 5, 2015 / Uncategorized / 0 Comments


William Beaumont Hospital has found a novel way to resolve a zoning dispute with the city of Royal Oak – keep building.

  • The hospital, one of the nation’s five-busiest medical centers, is planning a $32.8 million, five-story addition to its research building on campus, said Michael Boyle, Beaumont associate hospital director.
  • The addition would provided the extra space needed for Beaumont’s expanding laboratory and research operations and eliminate a bone of contention with the city of Royal Oak, Boyle said.
  • The city, in accordance with state laws, has been seeking the removal from the Beaumont campus of all temporary buildings, said Richard Beltz, Royal Oak planning director.


Patient volumes have grown so quickly during the past 10 years that the hospital has had a hard time constructing facilities fast enough to keep up. Consequently, the hospital over time had to truck in several modular buildings, totaling more than 50,000 square feet, for research and administrative activities, Boyle said.

“A $300 million construction program over the past several years has winnowed the number of temporary buildings to two. The new addition would eliminate the remaining temporary buildings that now provide 10,000 square feet”, Boyle said.

“The city of Royal Oak takes a dim view of temporary buildings,” he said. ``They’ve been very patient with us.”

Beltz said the hospital promised to have all the temporary buildings removed by the end of 2000.


The hospital’s growth has been far more positive than annoyances such as the modular buildings, he said.

Beaumont is the city’s largest employer and a large taxpayer, despite its nonprofit status, Beltz said. Many of the physician offices and ancillary services are taxed, as are dozens of other nearby physician offices and services businesses that are there because of Beaumont. The medical center has about 8,000 employees in Oakland County.

``Beaumont is a cooperative neighbor,” Beltz said. ``But by its sheer size, it’s going to produce some congestion and other problems that we work with them on.”

Beaumont hopes to break ground this spring on the 117,000-square-foot addition and open it by the end of next year, Boyle said. The construction is pending certificate-of-need approval by state regulators and final approval by the Beaumont board of directors. Beaumont filed for state approval in February. The plan is expected to go before the full board of directors this month.

The medical center plans to consolidate its clinical laboratories into the addition, except its blood bank and lab work requiring quick turnaround times, Boyle said.

William Beaumont Hospital Royal Oak

“Laboratories currently are in several areas of the medical center, he said. The new space will provide additional capacity and make the operation more efficient by having them placed together”, he said.

Beaumont’s laboratory demands have skyrocketed with patient volumes. The medical center performs about 2 million lab tests a year, Boyle said. That work supports the more than 48,000 in-patient admissions that the medical center handled last year, he said. Beaumont is the Detroit area’s sixth-largest hospital and health care system, with 1997 revenue of $873.7 million.

All told, the laboratories will be housed in about 47,000 square feet of space, the research facilities in another 26,000 square feet and mechanical systems in about 44,000 square feet, Boyle said. Mechanical space is disproportionately large because the labs will require extra climate-control systems and water treatment, he said.

The new research facilities will complement about 50,000 square feet of space dedicated to research in the attached building. Beaumont’s annual medical research budget has grown from about $2 million five years ago to $6 million today, said Marcus Zervos, M.D., director of the William Beaumont Hospital Research Institute.

  • Beaumont has 26 departments involved in medical research with 150 investigators. About three-quarters of research is of the applied clinical kind and the rest is basic research into subjects such as the genetic composition of antibiotic-resistant bacteria, Zervos said.
  • Beaumont has met growing patient and research demands with new brick and mortar. During a 10-year, $300 million construction program, Beaumont has built a critical care tower, a new center for mother and baby care, a freestanding imaging center, two parking decks and expanded its power house.

Next month, the hospital plans to fully open a $40 million heart center that includes five catheter labs, Boyle said.

pagosamount / March 31, 2015 / Uncategorized / 0 Comments

Hospital agreements reached


The National Union of Hospital and Health Care Employees, District 1199C, has signed a new five-year contract with Hahnemann University Hospital and the Hospital of the Medical College of Pennsylvania. The contracts include benefits guarantees, such as unemployment compensation and severance pay if workers are laid off. Any employee laid off due to restructuring will receive 80% of their salary for one year, and will receive job retraining.

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Full Text: 

Some 2,100 hospital workers represented by District 1199C, National Union of Hospital and Health Care Employees-affiliated with the American Federation of State, County and Municipal Employees–gained significant job security protection, including income guarantees when they are laid off, under new 5-year contracts with Hahnemann University Hospital and the Hospital of the Medical College of Pennsylvania. Under terms of the agreements, full-time employees with at least 90 days of service who are laid off because of restructuring will receive up to 80 percent of their salaries (inclusive of unemployment compensation), plus health care coverage for themselves and their dependents, for up to 1 year. In addition, laid-off workers will be eligible for retraining and must be recalled to fill job openings in their same job classification or group at their own hospital or at other hospitals covered by a contract with the union.

  • The pacts, which were negotiated 8 months early, include three new job security provisions. The first protects the weekly base pay of employees when they are transferred to lower paying jobs or when their hours of work decrease because of restructuring. Another extends employees’ union rights and protection when they are transferred to an auxiliary facility not covered by the union’s contracts. The third provision provides income security protection to part-time workers who are laid off and are eligible for unemployment insurance benefits. These workers will receive the difference between 80 percent of their pay and their unemployment insurance payments.
  • The Employment and Training and Job Security Fund, which provides money for the new job security arrangements, will be financed by an annual employer contribution of 1.5 percent of payroll, a one-time diversion to the training fund of 1 month’s payment to the pension fund, and two diversions from wages as described below.
  • The pacts provide wage increases of 3 percent in July 1995, 3.5 percent in July 1996, 3 percent each in July 1997 and 1998, and 2 percent each in July 1999 and January 2000. The first 1 percent of the July 1995 increase and the first 0.5 percent of the July 1996 increase will be diverted to the Employment and Training and Job Security Fund.

06_30_08Hahnemannnight views of building

Other economic terms continue the employer payment of 20 percent of payroll to the benefit fund; raise employer contributions to the pension fund by 0.86 percent of payroll (to 7.56 percent of payroll); establish a new $2.5 million retirement incentive package in July 1995; increase employer contributions to the Legal Service Fund by 2.5 cents per hour (to 7.5 cents per hour per employee); and change the age requirement for retirement from 65 to 62.

In Providence, Ri, negotiators for the Rhode Island Hospital and the International Brotherhood of Teamsters inked their first contract, a 2-year agreement that establishes several joint committees that give the 1,800 service and maintenance workers in the bargaining unit a voice in decisions dealing with staffing, working conditions, and other contract provisions that affect quality of patient care. In addition, a separate committee will be created 90 days before anticipated work force reductions to discuss them and ensure that hospital restructuring “achieves employment goals that provide the highest quality of care and maximizes employment at the highest possible conditions.”

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About 100 skilled maintenance workers will receive wage increases of 4 percent in the first year of the contract and 5 percent in the second year. The remaining 1,700 workers will receive two wage increases of 2 percent, one retroactive to October 1, 1994, and the other retroactive to their 1994 service anniversary date; 2 percent on October 1, 1995; and 3 percent on their 1995 service anniversary date. In addition, workers with 20 to 24 years of service will receive a longevity bonus of 1 percent of gross pay on their next service anniversary date, and those with 25 or more years of service will receive a similar 2-percent bonus. At the expiration of the previous agreement, hourly rates ranged between $7 and $18.

The settlement initially continues the current level of health care and pension benefits. It provides a health care and pension reopener in 1995, with an agreement to “substantially increase” benefit levels by 1996. The contract also maintains the level of employees’ health care copayments and stipulates that pension improvements will be retroactive.

“Developments in industrial Relations” is prepared by Michael H. Cimini and Charles J. Muhl of the Division of Developments inLabor Management Relations, Bureau of Labor Statistics, and is largely based on information from secondary sources.

pagosamount / March 31, 2015 / Uncategorized / 0 Comments

Beaumont, UM plan hospital expansions

Two Detroit area hospitals on opposite sides of the metropolitan area are preparing to invest a combined $42.1 million in expansions.

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  • William Beaumont Hospital-Troy plans to spend $23.6 million to build an outpatient center on its expansive campus on the Macomb County border, while the University of Michigan Health System has earmarked $18.5 million to renovate and expand the emergency room at the UM Medical Center.
  • Beaumont Troy is responding to burgeoning demand from a growing population in its corner of the county, said Eugene Michalski, senior vice president and hospital director.

Outpatient visits have been growing at a double-digit rate for several years, and the hospital, which has 189 beds, has an inpatient occupancy level approaching 90 percent, Michalski said.

  • Beaumont Troy is the smaller of the two hospitals in the William Beaumont system. The flagship is 929-bed William BeaumontHospital in Royal Oak, which, along with the Troy hospital, is among the nation’s busiest hospitals for its size.
  • UM Medical Center’s plan is to double the size of its emergency room to 24,000 square feet and bring adult, pediatric and psychiatric emergency services into closer proximity while keeping them separate, said Peter Forster, associate hospitaladministrator.

The layout is more efficient and will allow staff to better cover the three areas during periods of peak demand, Forster said.

The medical center gets about 1,000 emergency-room visits a week, he said. The health system plans to spend about $10 million of the $18.5 million for construction, $5 million for equipment and the remainder for various fees, including architectural services, he said.

The emergency room is being designed with an on-site laboratory and two radiology suites, including one with a computerized axial tomography, or CT, scanner to assist with diagnosis, he said.

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The process of diagnosis also is being reshaped.

The emergency department plans to take a page from the medical center’s chest-pain center and develop teams of clinicians to review complicated cases and decide jointly on treatments, Forster said.

The team approach allows the hospital to bring a wide range of expertise into the equation to decide whether to admit patients or release them after emergency-room treatment. Forster said the team concept could be used to assess people who are having fainting spells, asthma attacks or gastrointestinal bleeding, for example.

A team is going to feel more comfortable than an individual physician in releasing a patient and possibly avoiding a costly hospitaladmission, Forster said.

Outpatient business accounted for about 52 percent of the $130.2 million in revenue generated by Beaumont Troy in 1997, Michalski said.

  • The new outpatient center is expected to have three stories and measure 75,000 square feet, he said.
  • The hospital hopes to have it open by December 1999, along with another phase of the hospital’s parking deck to accommodate the additional traffic, he said.

Under the 50-year-old Michalski, Beaumont Troy is looking to open satellite physician clinics in Warren, Sterling Heights and Shelby Township.

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The hospital’s primary service area ranks among the fastest growing in terms of population in the state, with such communities as Rochester, Sterling Heights and Shelby TownShip contributing significantly. CDB

pagosamount / March 30, 2015 / Uncategorized / 0 Comments

Riverview Hospital on life support

St. John Health System is unsure whether it can afford to keep open its St. John Detroit Riverview Hospital on Detroit’s near east side.

An influx of uninsured and Medicaid patients, fueled by last year’s closing of Mercy Hospital in Detroit, caused operating losses at the 230-bed community hospital to widen to $5 million in the 2000 calendar year from $1 million in 1999.

The hospital would have closed

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Prospects are so precarious that the hospital would have closed had the state followed through earlier this year with a legislative proposal to shift some disproportionate-share funds used to compensate hospitals for extra indigent care from Detroit hospitals to those elsewhere in the state.

The change would have cost Detroit Riverview, one of 10 hospitals in the St. John Health System, about $1.9 million of the $3.7 million it collected in disproportionate-share funds last year, said Elliot Joseph, St. John president and CEO.

That would have sunk us,” said Vernice Davis-Anthony, St. John Health senior vice president, corporate affairs and community health.

St. John Health is determining how it can continue its urban mission without causing unacceptable losses to the company, Joseph said. St. John is the Detroit area’s fourth-largest hospital company, with fiscal 2000 revenue of $1.36 billion.

One of the issues being explored is whether Detroit Riverview can remain open long-term, Joseph said.

``If there are no policy changes, we are faced with the decision to close doors or take mounting losses,’‘ Joseph said.

St. John Health has not set a timetable for a decision on the fate of Detroit Riverview, Joseph said. The hospital employs 1,238.

The hospital, like others in Detroit, has been whipsawed by government reimbursement cuts, medical cost inflation and a growing problem with the uninsured.

Moreover, Detroit Riverview has suffered disproportionately from the closing last year of Mercy Hospital, situated in a poor section of Detroit’s east side.

Patients whose unpaid care caused Mercy Hospital to lose $20 million in 1999 and prompted Novi-based Trinity Health to close thehospital in March 2000 are showing up in the emergency departments of Detroit Riverview, St. John Hospital and St. John Northeast Community Hospital.

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The closing has caused emergency visits

Baby deliveries and admissions to spike at those hospitals. The good news is Detroit Riverview is 83 percent full with patients on most days.

The bad news is the government insurance carried by the patients, if they have insurance at all, often is not covering the cost of care. Medicaid admissions last year rose 32 percent, to the point that Detroit Riverview now has a patient base that is 80 percent Medicaid and Medicare.

“We have a saying around here: beds full, pockets empty,” Joseph said.

Davis-Anthony said Detroit Riverview is losing an average of $5,000 on every birth at the hospital. Bad debt rose a total of $21 million last year at St. John Hospital, Detroit Riverview and St. John Northeast.

  • The closing of Mercy Hospital ripped another hole in a health care safety net in Detroit already shredded by the closing of about half of the primary-care physician clinics in the city over the past four years. Poor reimbursement caused physicians and hospitalowners to pull the plug on the clinics, Davis-Anthony said.
  • Another major hospital was taken off line last year when The Detroit Medical Center merged its Sinai Hospital in northwest Detroit into nearby Grace Hospital.
  • Henry Ford Health System, also feeling the effects of the Mercy closing, is worried that the closing of another hospital in Detroit would swamp the remaining players in the city unless there is new government funding.

“This is the equivalent of the California power crisis about to blow,’‘ said Bill Conway, M.D., chief medical officer of Henry FordHospital.

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The emergency department at Henry Ford Hospital

Built 12 years ago to accommodate 60,000 patients a year, saw 100,000 patients last year, Conway said. In the first quarter, the hospital experienced a 12 percent to 15 percent increase in the number of seriously ill and injured patients, an increase mostly made up of patients without insurance.

The closing of physician offices in the city in response to inadequate reimbursement or nonpaying patients has meant that hospitalemergency departments often have become the first and most costly health care access point for patients, he said.

“If one more ER closes, we’ll be treating people in the streets,” Conway said.

The state needs to restore about $200 million to Medicaid funding that was taken out when it restructured the program in 1997 by turning over administration of the Medicaid population to private health plans, he said. Only a portion of the 20 percent reduction in funding has been restored by legislative budget increases, Conway said.

  • The problems of Detroit Riverview and other urban hospitals should not be laid at the feet of Medicaid, said James Haveman Jr., director of the Michigan Department of Community Health.
  • Medicaid funds account for about 7 percent of hospital revenue in Michigan, compared with 50 percent or more from Medicare, Haveman said. Hospitals have been far more affected by cutbacks to Medicare in the federal Balanced Budget Amendment of 1997, he said.
  • Legislative increases in fiscal 2001 to the $5.5 billion Medicaid budget added $200 million to the $2.6 billion portion of the budget that directly affects hospitals and physicians, Haveman said.

St. John Health System needs to talk with the department if it is looking for additional relief for Detroit Riverview, he said. The last financial report on Detroit Riverview, for the hospital’s fiscal year that ended last June 30, showed it reporting net income of $2.7 million, he said.

pagosamount / March 30, 2015 / Uncategorized / 0 Comments