The Executive Council brought together experts in the healthcare industry over an intimate breakfast at The Harvard Club Tuesday, February 22, 2011. The event entitled, New York City “Hospital Crisis: Teetering on the Edge – Or Opportunity for Change?” was an attempt to dissect the changing landscape of New York City hospitals and to explore practical and actionable outcomes for patients and the broader healthcare ecosystem.
With the recent demise of St. Vincent’s Medical Center, many now ask whether New York’s hospital system is a heartbeat away from crumbling further.
In 2008, New York City hospitals spent $3 billion more on care than they took in. And, they operated at an average of a 6% loss versus the national average of operating at a 4% profit. One of the little discussed consequences of federal health reform and its related significant reductions in Medicare reimbursement will be the relative absence of any kind of margin that can be tapped to pay for capital investment. The lack of capital for IT investment could be devastating for hospitals, particularly those serving Medicaid patients.
The dialogue offered at the conference included two 1 –hour sessions, remarks followed by a roundtable panel discussion.
The first session, Setting the Stage: Defining the Issues-What is Driving the Crisis? kicked off with remarks by Stephen Berger and the discussion continued with panelists Ken Raske, President, Greater New York Hospital Association; Mark Wagar, President & CEO, Empire BlueCross BlueShield/Wellpoint; Alan Aviles, President and CEO The New York City Health and Hospitals Corporation (HHC); and Adam Rogoff Partner Kramer Levin (and Lead Counsel, St. Vincent’s).
After a short break, the second session: “Can Urban Hospitals Survive and Thrive?” began with remarks by Dr. Ralph de la Torre and the discussion continued with panelists Jim Tallon, President, United Hospital Fund of New York; Brian Fortune, Marwood Group; Dr. Herb Pardes, President & CEO, New York-Presbyterian Healthcare System; and Christopher Vanuga, Principal, Deloitte.
Panelists indicated that Medicaid budget cuts have led to a deficit of $330 million contributing to the crisis. Ralph de la Torre was careful to point out that while we are still working on healthcare reform, the current conversation is moreso about Health access reform. And while improving the cost per unit is important, the more important matter is reducing the consumption of units. Utilisation is too high. He also remarked, “In order to get to a true managed care platform where providers are at the center in partnership with the physicians, it requires a large capital investment. The for-profit world is a way of getting that capital leap.”
Dr. Herb Pardes commented in an uplifting close, “Yes, we need to get the cost down, but we need to make sure the medical revolution which has transformed our lives in terms of what’s available in healthcare, continues.”