(Blue Dog Press, 7 February 2002)

Hospitals at the Edge #4
 

Why Your Health Care Just Got Worse

by Bruce Jackson

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The air in the system

By my count, we’ve got eight different major corporate or categories of health care providers in Erie County. No two of them are in full accord or anything close to it about function, clients, ideology or mission. The eight are: Kaleida Health, the Catholic Health System, University at Buffalo, Roswell Park Cancer Institute, the Veteran’s Administration Hospital, Erie County Medical Center, the various public and private agencies that tend to the health needs of the aged, and physicians in private practice.

All eight of those systems developed in a time and economy different from this time and this economy. And everything is permeated by politics and memory. There was a time not very long ago when Buffalo's three hospital systems divided ethnically: Millard Fillmore (you didn't have to append “Gates Circle” because Millard Fillmore Suburban didn't exist yet) serviced and was staffed primarily by Jews and Italians; the Catholic hospitals were predominantly Irish; and Buffalo General was where the Protestants were and hardly anybody else got to go. Everybody else got in where they could.

By all accounts, Erie County now has about twice as many hospital beds and rooms as it can possibly use. This is mostly because of changes in medical practice (many procedures that used to require days in the hospital now require hours in an outpatient clinic) and changes in funding options (a state-regulated system that rewarded extended hospital stays has been replaced by a system that punishes institutions delivering more than minimal inpatient care).

Health care doesn't take place in a free market economy: services are determined by local factors (how much money local employers, governments, and individuals are able and willing to pay for health care), distant factors (how much money Albany and Washington have left over from their other enterprises de jour), and ideological matters (the same medical situation may elicit very different treatments if the patient is in the Catholic Health System or Kaleida).

Entire floors are dark at every hospital in the city and many of the open floors are inadequately staffed. Roswell Park added a large number of beds just before oncology turned into an outpatient practice: instead of going to Roswell and staying there for chemotherapy, people now get their shots and go home or, if they’re from out of town, to the Pillars hotel down the street where they can rent a suite with kitchen for a fraction of what they’d pay for a hospital room.

Medical practice follows the demographics. The fastest growing population group in Erie County is 45-65. The fastest growing medical specialty is orthopedics—not for the bones kids break falling off their bikes, but rather for the hip joints and knees those 45-65-year-olds wear out and need replaced. The number of women of child-bearing age in Erie County is down and so, therefore, is the number of births in area hospitals and the number of kids needing pediatric services.

“You want to know how much air is in the system,” one medical administrator said to me. “You could take everything in Kaleida except Millard Fillmore Suburban and put it into the unused beds in Buffalo General and Roswell, and you’d still have beds left over. I'm not saying that's something we ought to do, I'm just telling you about the air in the system.”

The Mess Kaleida is In

Kaleida was created in 1998 when Millard Fillmore Gates Circle, Millard Fillmore Suburban, Children's, DeGraff, and Buffalo General hospitals decided to merge their resources. Some of those hospitals were already in dire financial straits; others were getting by but saw hard times coming. All shared the hope that economies of scale would help them all cope with changing conditions. Kaleida no doubt seemed a better idea back then than it does now: how can you get it up for an organization created to be economical that lost $16 million in 1999, $23 million in 2000, and $60 million in 2001? What's the next number in that series?

The healthiest of Kaleida's hospitals is Millard Fillmore Suburban. It's doing well because it services an area with the county's best demographics—there aren't many neighborhoods nearby with poor or indigent patients, but there are a lot of high-income, high-employment, well-insured subdivisions. The sickest is Buffalo General on High Street, which accounts for the bulk of the system's losses.

A few years ago, the Kaleida Board came up with the idea of moving Children's Hospital from its Bryant street location to a new building on High Street. The new building would link umbilically to Buffalo General, thereby reuniting the pediatricians with the OB/Gyn doctors, who preferred to be based in a hospital for adults. The Board said that the congeries of  Children's, General, Roswell, and the Hauptman-Woodward Research Institute would increase the likelihood of other medical research and teaching operations locating there in a medical corridor or district.

Most physicians at Children's opposed the move. They said the proposed facility would provide a less efficient space than they presently occupied,  that the standalone Children's Hospital has a national reputation that would be lost if it were merged with the undistinguished Buffalo General Hospital, and that the economies of juxtaposition claimed by Kaleida CEO John Friedlander were just accounting games or were based on substituting services designed for adults for present services designed for children. There was a good deal more to their argument. Many neighborhood residents and store-owners worried that emptying Children's would precipitate a decline in one of Buffalo's most stable neighborhoods.

The Kaleida board seemed uninterested in the physicians' and neighborhood's opposition to the plan, but public opposition didn't go away, several politicians got involved, and eventually Kaleida named a committee to study the options; the committee even included some of the doctors who had been most vocal in their opposition to the proposed move. No action would be taken, Kaleida promised, until the committee determined that a move would not diminish Children's functionality and that sufficient funds would be available to do all that had to be done.

Opponents to the move worried that Children’s would suffer so much from neglect during the two or three years of the feasibility study that there would be no choice but to move, no matter what the study showed. Few physicians I talked to at Children's trusted Kaleida's intentions and many were enraged: they had joined Kaleida for mutual support, now they saw themselves being sacrificed for Kaleida's own interests and concerns.

Then, a month or so ago, Kaleida announced that the money wasn't there to build a fancy new structure on High Street, so the plan was shelved for now, for a while, perhaps for good. One former Kaleida board member, furious about the collapse of the plan, told a friend, “You people think you've won something. You haven't won anything. What's going to happen now is, Children’s will be starved to death.”

In retrospect, the High Street Children’s move seems like the kind of late-night pipedream you permit yourself when all the cruddy details of reality disappear in the dark places. Kaleida is drowning in debt and being suffocated by the weight of buildings it cannot possibly support. How could it build a brand-new high-tech facility?

Enter The Hunter Group

How, for that matter, can it even survive? To answer that question, Kaleida hired the Hunter Group, a St. Petersburg, Florida, organization that specializes in helping medical organizations “improve their strategic, operational and financial performance.”

Last week, the Hunter Group's conclusions were presented to the Kaleida board. I hear there's only one copy of the report and that it's being closely guarded by Kaleida officials. Hunter is making other presentations. On Tuesday of this week, for example, they discussed their conclusions with a group of Buffalo physicians. Kaleida promises to release the key provisions of the report sometime this week, and may indeed have done so by the time this issue of Blue Dog Press is published. In the interim, they and the Hunter Group are carefully managing what information gets out and who gets it.

Hunter recommends that Kaleida close Buffalo General, Gates Circle or Children's Hospital. Big deal: Kaleida was saying the same thing two years ago, before it spent a couple of hundred thousand bucks on this thick, fancy report.

No one takes seriously the Buffalo General suggestion: pull that out of High Street and the medical district plan is really dead, and it would probably do real harm to the neighborhood as well. No one seems to be taking the possibility of closing Gates Circle seriously either. The Hunter suggestion that has lit fires all over town is that is Kaleida close Children's and move its major operations into unused space at Gates Circle. That is, sacrifice Children's Hospital in order to preserve another hospital in the Kaleida system.

The High Street proposal was arguable: it had some interesting possibilities and there were good arguments against it. Rational people could, I think, take one side or the other. The most important argument in its favor was that the new Children's Hospital would be part of a synergistic enterprise that would be good for the city as a whole, that the bad hit the Elmwood district would take would be made up for by the increase in enterprise around the High Street location. I was never convinced that that was true, but I always thought it was at least worth discussing.

The idea of moving Children's into Millard Fillmore Gates Circle, however, has nothing at all to recommend it. Unless there's some brilliant argument buried in the report's several hundred pages that no one has yet leaked or even referred to, it's a cold and cynical suggestion that is directed only to the fiscal stability of Kaleida itself and pays no attention at all to the health and economic needs of the community or to the very specific value the community gets from Children’s Hospital. There's no medical argument for moving Children's into Gates Circle. It's just about Kaleida's money.

What did Kaleida buy?

So how useful is the report of the Hunter Group? To answer that, you have to ask, to whom is their report useful? Who commissioned it and what question did they ask? Not just what question did they ask in writing, in the letters that will be shared with whoever they want to share documents with, but what question did they ask in conversation, the contents of which will be shared with no one who wasn’t in the room or on the phone when the conversation occurred?

Why should we assume that the Hunter Report has OUR interests at heart? We know it has Kaleida’s interests because Kaleida paid for it and Hunter is dedicated to the people paying its very high fees. “We only agree to represent the best interests of an organization,” the Hunter Group brags on its web site. They say nothing at all about the community in which the organization is embedded.

Are Kaleida’s interests and ours the same? Not necessarily and, many medical people in town would say, not in any case. Five of the major medical institutions in town are not part of Kaleida: the VA, ECMC, the Catholic Health System, Roswell Park, and the University at Buffalo. Kaleida exists in uneasy accommodation with all of them, and in outright competition for funds, staff and clients with the Catholic Health System.

No doubt the Hunter Group's report focuses on management issues Kaleida needs to think about. What WE need to think about is the relationship of Kaleida with the community. It started out as a group of hospitals joining forces for their mutual health, but then it took on its own identity. It is in the nature of complex organizations that the organizations worry most about their own institutional well-being. (That’s not a new problem or one limited to health care organizations. It was at the heart of the most passionate arguments among the founders of the United States: what rights and powers belong to the states and what rights and powers belong to the union, and what happens when those rights are in what seem to be unresolvable conflict? In large part, our most fatal war, fought on our own land among our own people, was grounded in that very question.)

To survive, Kaleida has to take drastic action. There simply aren’t enough people needing inpatient care to justify all the hospital rooms in Buffalo and the surrounding towns. Which institution will be put to death? Which will get a sex change operation? Which will be elevated? Which demoted? From the point of view of Kaleida, what matters most is that the violence happen soon and decisively.

The questions that weren't asked

What we’re not hearing in any of this is, “How can the needs of the community best be served?” Kaleida assumes that what’s good for Kaleida is good for the community. Maybe, maybe not. Maybe it’s Kaleida that should be put up against the wall and shot rather than one or more of the hospitals. Maybe the question the Hunter Group should have been asked was, “Given the complex and competitive nature of medical services delivery in Erie County, was Kaleida the best way to go and, if not, what should be done about it, to it, with it?”

Hunter answered Kaleida’s questions, not yours or mine. It didn’t answer this one: “What is a workable balance for the several health care players in the community?” Or this: “What is the ideal relationship, in terms of health care provision and research and teaching and funding, between UB and the various health care agencies?” Or: “What shall be done about the decision of the Catholic system to go its own way and operate as if the other health care providers in the region didn’t exist or don’t matter?”

Kaleida hired the Hunter Group to tell it how to fix its financial situation. It did not hire Hunter to come up with the best health care plan for the city, the county or the region. It did not ask Hunter how to provide the best possible health care for the indigent. It did not ask Hunter how to end the internecine war between the Catholic Hospital System and Kaleida that has every potential of dragging both systems down. It did not ask Hunter what to do about the huge economic hole that would be caused by moving Children’s out of the Elmwood area.

I think it is unfortunate that the Giambra/Wilmers powerful-white-male health care task force folded its tent when the Catholic Health System walked out of their meetings rather than talk about regional health needs and collaborative relationships. They should have filled those abandoned chairs with representatives of the ethnic and economic and professional groups they forgot to invite the first time. They should have asked and answered the hard questions about the community’s health care needs, the questions Kaleida didn't ask and Hunter Group didn’t answer.

We shouldn’t be getting cranked up over the Hunter Group report: that’s just something that was bought and paid for. We should get some truly independent and representative body to look at the role Kaleida has come to play in our community, and consider options for making it and every one of the other health care providers the decent civil servants we have every right to expect them to be. It’s time to ask the questions that really matter.
 

 
 
 
copyright 2002 Bruce Jackson