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Berger Commission

August, 2007

Berger Commission
Mara McErlean, MD FACEP
Director, Department of Emergency Medicine, Albany Medical Center

No one needs to tell emergency medicine physicians that New York State’s health care delivery system is in crisis. Far too many New Yorkers are uninsured or underinsured. We spend a disproportionately high percentage of the state budget on health care without a corresponding increase in health. Our emergency departments are gridlocked with inpatients, prohibiting us from providing the care new patients require. Our departments are flooded with patients without access to consistent outpatient psychiatric and medical care. And we are asked to participate in planning for pandemic outbreaks and unnatural disasters while we acknowledge that we cannot provide care to the patients we already have.

And yet, a state commission has concluded that we have too many inpatient beds and that this inefficiency is a major contributor to the exorbitant health care expenditures. How is this conclusion, one that contradicts many of our daily experiences, possible? First, some background.

The Commission on Health Care Facilities was formed in 2005 by then Governor George Pataki. It was designed to be a non-partisan group, independent of state or regulatory agencies. The group became known as the Berger Commission, for Stephen Berger, the investment banker chair.

The Commission divided the state into 6 regions. Regions were determined by existing statute. Each region had a Regional Advisory Committee (RAC) with up to 12 members each. This RAC had advisory responsibility but no power to determine outcome. In addition, each of the six regions had a regional commission of six members who had voting power within their respective regions. Finally, each region had three voting members. These 18 members had voting power to determine the Commission’s final recommendations.

The State began with several assumptions. They recognized that hospitals must maintain high occupancy rates in order to remain financially viable. They acknowledged that current reimbursement structures provide financial incentives for hospitals to pursue high reimbursement admissions rather than initiatives that might assure the public’s needs are met throughout the community or region. This competition pits local hospitals against one another, spending resources to attract more lucrative business and diluting numbers sufficient to promote real competency and efficiency. Finally, they recognized that minimal operating margins do not provide hospitals with enough resources to reinvest in developing technologies or replace aging infrastructure. Few of us would argue with these characterizations.

The State then looked historically at hospital closures over the last quarter century. Since 1983, 70 hospitals and 63 nursing homes have closed. They compared hospital length of stay and ancillary testing in hospitals with high occupancy rates versus those with lower occupancy rates. They concluded that market forces to keep occupancy rates high have the greatest impact on making hospital care efficient. Therefore, the State surmised, only a reduction in inpatient capacity will provide enough pressure to keep inpatient care efficient and cost effective. The Berger Commission, though acknowledging need for more widespread reform, was concerned only with matching need with local and regional inpatient capacity, while assuring essential services were maintained.

Each facility was rated according to six categories: (i) service to vulnerable populations, (ii) availability of services, (iii) quality of care, (iv) utilization, (v) viability and (vi) economic impact. Ratings of -1, 0 and 1 were given in each area. Facilities were compared to others only within their designated regions.

The Berger Commission concluded that there was a surplus of inpatient beds in New York State. They recommended closure of nine hospitals with downsizing, reassignment of services or mergers to impact on an additional 48 hospitals. In all, inpatient capacity will be reduced by 7% and nursing home capacity will be reduced by 2.6%. Hospitals impacted range from upscale, specialty service hospitals in upstate to Catholic hospitals, serving largely indigent populations, in the New York metropolitan area. The Commission was structured so that it would be accepted by default if no action was taken by the legislature. In addition, it can only be accepted in its entirety, so that all recommendations would be enacted.

The story is far from over, however. There are many, many questions that remain to be answered. Although theoretically, the State believes there are sufficient monies to enable the closures and mergers outlined, there are many who believe these monies will be insufficient. In addition, several hospitals have brought suits against the State, claiming the Commission recommendations are invalid and should not be enforced. There remain questions about how hospital mergers could be managed, specifically those that involve SUNY hospitals or Catholic with non-Catholic hospitals. There has been public outcry from many professional groups, including unions and the New York State Nurses’ Association. Exactly how the recommendations will be enacted, and when, remains to be seen.

For many of us, however, the Commission’s recommendations do not pass a reasonability test. If keeping inpatient capacity at its highest possible percent is the driving force behind financial viability for a hospital, why do so many inpatients stay in our emergency departments? Why do we keep patients who could legitimately be inpatients in our emergency departments for 12 and 16 hours? Why do hospitals not have adequate resources to obtain the testing and treatment our patients need to shorten their inpatient stays?

The solution cannot possibly be this simple or it would have been enacted voluntarily by hospitals years ago. Until we can better manage the 29% of all Medicaid patients who consume more than 85% of the Medicaid dollars and all New Yorkers are insured, the hospital occupancy rate will not matter and efficiency in discharging patients whose needs cannot be met in the community will not be an asset. Without substantive changes in availability of outpatient resources, including physician follow up, social workers, psychiatric care and visiting nurses, no real change can occur.