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Crain’s Health Care Symposium asks: ‘Can Brooklyn be cured?’

Stephen Berger Keynote Speaker

October 25, 2013 By Mary Frost Brooklyn Daily Eagle
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Two major Brooklyn hospitals – Long Island College Hospital and Interfaith Medical Center — are fighting to stay open and several others are teetering. Is there a cure for what ails Brooklyn health care?

Stephen Berger, Chairman of Odyssey Investment Partners, LLC was the keynote speaker at Thursday’s “Crain’s Health Care Symposium: Curing Brooklyn’s Health Care Crisis” event at the Brooklyn Marriott, sponsored by Crain’s New York Business.

Berger served as the chair of the Brooklyn advisory panel of Gov. Andrew Cuomo’s 2011 Medicaid Redesign Team, which was intended to improve the stability of Brooklyn’s health care system. The Brooklyn Work Group’s report called for more outpatient primary care clinics and fewer inpatient hospital beds, among other restructuring.

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Hundreds attended the symposium, which brought together panels that included CEOs from four Brooklyn hospitals along with representatives from government and labor.

The cure for the borough’s health care crisis is apparently not going to be easy.

When asked what went wrong with the Brooklyn Work Group’s original plan to shift SUNY Downstate’s inpatient clinical activity to LICH, Berger said bluntly, “It turned out the plans were delusional. It didn’t exist; the concept wasn’t real . . . We assumed that SUNY’s leadership understood what to do to make serious progress. They didn’t, and he’s gone.”

The core issue in Brooklyn, according to Berger, is how to change the behavior of health care consumers so they will work with primary care physicians in a networked system, rather than depending on hospitals for their basic health care needs.

“Consumers are not stupid,” he said. “If they go to the ER, they’ll see a doctor. It may take five hours, but they believe they’re getting the best medical care.” The transition to a networked system won’t take place overnight, he said, explaining that the infrastructure does not yet exist.

Berger also talked up raising private capital for health care, a controversial concept backed by Gov. Cuomo, who has pushed for for-profit hospitals in New York. “New York is different from the rest of the country, but different isn’t necessarily better. The rest of the country mixes private and public dollars to deliver health care,” he said.

Berger also noted that “the rate structure must be redesigned,” saying that the Affordable Care Act “will generate incentive payments.”

Members of the morning’s first panel included Dr. Neil Calman, President & CEO, The Institute for Family Health, Mount Sinai; Jill Furillo, Executive Director, NYS Nurses Association; James Introne, Former Deputy Secretary for Health, New York State; and Ngozi Moses, Executive Director, Brooklyn Perinatal Network Inc.

A fragmented system

While panel members agreed the days of “hospital-centric healthcare” are numbered, most said that the integrated systems of the future were not yet available, and that current resources must stay in place until they are.

“We do not have a system, we have parts of a system, a fragmented array of services,” said Ngozi Moses. She said a health care needs-assessment was carried out by the Brooklyn Hospital Center and the I M Foundation, “but it’s sitting on a shelf somewhere.” Leadership is not coming from the Governor’s office, she complained, “and I’ve heard that our elected officials do not have access.”

Moses noted that hospital closures always happen “in poor communities,” and pointed out that “over 17 clinics closed in our community when two hospitals closed. Over 20,000 people were dislocated from five clinics, and couldn’t even find their records.”

Most panelists seemed to agree that Brooklyn “doesn’t want a state authority redesigning Brooklyn’s health care.”  

“It has to come from the community,” said James Introne. Brooklyn’s health care system must start with “a healthy dialog not imposed by an external authority,” he said.

Introne also discussed the limitations surrounding the Medicaid budget. “If we increase one part, we have to decrease another.”

Jill Furillo pushed back against the notion that hospitals could be closed without affecting the surrounding neighborhoods. “Communities are being left behind. When you close a hospital you close 20 percent of community-based clinics.”

She added, “New York City is the inequality capital of the world. The Upper East Side has five times more primary care providers than Brooklyn. There are also lower reimbursement rates in Brooklyn than on the Upper East Side.” Given Brooklyn’s greater poverty, she called for the state to intervene in this inequality.

Furillo strongly disagreed with Berger’s stance on private equity. “The people who crushed our economy should not be running our health care,” she declared, eliciting applause in the western quadrant of the ballroom.

Financing can make or break the managed care model

Financing was a big issue for Dr. Neil Calman, who said it requires capital to build a robust primary care system, and complained that the state hasn’t yet committed to a reimbursement rate. “Ambulatory care providers live on the edge of default. While community hospitals are overpaid for high cost procedures, they pay less than cost for Medicaid procedures.”

While many extol the move to the managed care model, Calman said, “We couldn’t survive on what managed care pays us if the state didn’t make up the difference, as a Federally Qualified health care provider. That gap is equal to $50 – $70 per visit that the state is picking up in a fee-for-service Medicaid environment.” Hospitals are paid more for hi-tech procedures, high acuity patients, and commercially insured patients, he said.

“It’s a dream to move the public into the managed care model,” he asserted.

Calman also said that the system needed to be restructured. “Kids get out of school at 3:30, but we close at 5.” He suggested “co-locating” primary care, mental health care and dental care facilities. “They’re the same people.”

Calman was asked if Mt. Sinai planned to “repurpose” a hospital in Brooklyn – LICH, for example. “I’m not saying where,” he said. [More from Dr. Calmen in comments below.]

What is labor’s relationship with mayoral frontrunner Bill de Blasio, Furillo was asked. “We have been working with de Blasio,” she said. “He has redefined the role of the Public Advocate in advocating to restructure Brooklyn’s health care. He has spoken about forming a Brooklyn co-operative and equalizing reimbursement rates. De Blasio is trying to bring together and build a primary system of care associated with acute care facilities,” she said.

When asked about the importance of job preservation to the New York State Nurses Association, Furillo said that NYSNA’s role in Brooklyn “goes to the heart of the mission of nursing. We advocate for patients at all times, in the hospital and in communities.”

“Should Interfaith close?” James Introne was asked. He said the state “is not in the business of closing or opening hospitals. We respond to boards and other providers.” Gov. Cuomo, however, decided to close Interfaith “based on his lack of faith in its management,” Introns said. While continuing some health services in the area “repurposing the building is the ideal solution. ” Intron said he saw replacing boards “as a last resort.”

The CEO panel

The hospital CEO panel included Alan Aviles, President & CEO, New York Health and Hospitals Corporation; Dr. Richard B. Becker, President & CEO, The Brooklyn Hospital Center; Ramon J. Rodriguez, President & CEO, Wyckoff Heights Medical Center; and Dr. John F. Williams, President, SUNY Downstate Medical Center.

Alan Aviles said he agreed with much of the Berger plan, “but the assumption is that a public hospital will be an anchor of the overall plan. There’s little appreciation of how endangered HHC is. We’ve reduced our work force and still have a structural deficit of hundreds of millions of dollars. If the Medicaid waiver doesn’t come through, there will be a much worse crisis.”

“HHC is prepared to be part of the process, but we do need leadership from the state,” Aviles said, adding that Kings County had formed a relationship with University Hospital of Brooklyn (UHB). “We have the ability to increase capacity,” he said. “Two units are mothballed. We just need capital.”

Hard choices at SUNY Downstate

Dr. John Williams emphasized that SUNY Downstate is not just a hospital, “but a university with five schools.” He said that SUNY itself had to come up with some sort of governing structure. “We worked together to rationalize our services.”

With University Hospital of Brooklyn (UHB) facilities crumbling, Williams discussed the possibility of shifting UHB’s operations to Kings County Hospital, across the street. “It could take 10 years to satisfy the student side, the resident side and the faculty side of five schools,” he said. “We would have to shift $60 – 70 million in research.”

As an alternative, Williams said he has considered building a new hospital. “It would cost from $1 – 1.5 billion,” he said, roughly “one million dollars per bed.”

Besides being deeply in the red, SUNY Downstate is mired in a thicket of lawsuits over its ill-fated attempts to close LICH, further complicating its financial position.

Dr. Richard B. Becker said the revenue and cost side both must be addressed. “You’ve got to make a profit from delivering primary care in a modern, patient-centered way. You need access to capital to build, and need to be self-sustaining.” Due to the changes in the health care law, however, Dr. Becker expects The Brooklyn Hospital Center “to lose $70 million in revenue over the next eight years – “And we’re one of the more profitable hospitals in Brooklyn.”

One roadblock to cooperation with a “Brooklyn Healthcare Network” proposed by Downstate (distinct from a borough-wide healthcare model proposed by Public Advocate Bill de Blasio) is the notion that “no one wants to give up” the high-paying services.

“You can’t generate profit from low-equity care, especially out in the community,” Becker said. “The state should be more helpful in helping us fund this transition,” he said. “We need access to capital.”

Ramon J. Rodriguez described how Wyckoff Heights Medical Center “shed $15 million in operating costs, and increased revenue and, by working with unions, increased productivity. “Wyckoff is a success,” he said. “Now, patients see smiling faces. Two years ago they saw bugs. Wyckoff is rising by responding to the needs of its neighbors.”

“The private capital thing is a diversion,” he claimed. “We pay $12 million a year at 7 percent interest on a loan from the state. If we paid 4 percent interest,” we wouldn’t need private capital, he said.

Rodriguez cautioned against mergers between fragile partners. Wyckoff’s 2006 merger “with two other places was a huge mistake,” he added. “We almost lost the whole place.”

He also emphasized hospitals must not be closed before opening alternative facilities. “You don’t close the bridge from Rockland County to Westchester before opening a new one.”

Rodriguez drew applause when he declared, “I’d like to have the state show up at this thing today!”

When Aviles was asked if The Brooklyn Hospital Center could tackle the changes discussed at the symposium without funding, he flatly replied, “No.”

 “The health care reform train has left the station,” he said. “Do we get there through chaotic collateral damage or thoughtful community planning with the unions as partners?”

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