Health & Human Services

Health Care Facilities Are Leaving Poor City Neighborhoods

by | July 15, 2014
 

By Lillian Thomas

Hospitals and family doctors, the mainstays of health care, are pulling out of poor city neighborhoods, where the sickest populations live.

A Pittsburgh Post-Gazette/ Milwaukee Journal Sentinel analysis of data from the largest U.S. metropolitan areas shows that people in poor neighborhoods are less healthy than their more affluent neighbors but more likely to live in areas with physician shortages and closed hospitals.

At a time when research shows that being poor is highly correlated with poor health, hospitals and doctors are following privately insured patients to more affluent areas rather than remaining anchored in communities with the greatest health care needs.

The Post-Gazette/Journal Sentinel analysis shows that nearly two-thirds of the roughly 230 hospitals opened since 2000 are in wealthier, often suburban areas.

As health systems open those facilities, they have been closing their urban counterparts. The number of hospitals in 52 major cities in the United States has fallen from its peak of 781 in 1970 to 426 in 2010, a drop of 46 percent.

Most of the facilities closed were small to mid-size community hospitals in poor urban neighborhoods and public hospitals, leaving many low-income neighborhoods with no safety-net hospital.

New York City's boroughs have lost more than 20 hospitals since 1990. Detroit has gone from dozens in the 1960s to four.

Locally, in the distressed community of Braddock, residents fought a long battle against the closure of their local hospital. UPMC shut down the Braddock facility in 2010 and protesters gathered in the street as the building was razed months later, tolling a bell for the 104-year-old institution.

Since 1988, Milwaukee County has lost its public hospital and five city hospitals.

One of those is the former Good Samaritan. A small nonprofit called City on a Hill now operates in a wing of the large complex, which overlooks one of Milwaukee's poorest neighborhoods. Once a month, when the agency hosts a free clinic on a Saturday, a line forms more than an hour early and stretches down the block.

The closures have been going on for decades.

Between 1990 and 2010 alone, 148 nonprofit hospitals closed in the largest American cities, along with 53 for-profit hospitals.

In addition, five public hospitals closed, according to Alan Sager of Boston University, who has tracked and studied hospital closures in the United States. His research shows it's not just poor-performing hospitals being closed; the ones that shut down often are rated as being more efficient than those that remain.

"In a competitive free market, efficient hospitals would be likelier to survive," he wrote in a paper summarizing some of his research results. "That hasn't happened, providing evidence that no such market is present."

When communities lose hospitals, they lose doctors, too. The newspapers' data analysis shows that doctors are scarcer in poor neighborhoods: Fifty-eight percent of the nation's 5,800 federally designated "primary care shortage areas" fall in census tracts of highest poverty in the 52 major metropolitan areas. In the 52 metro areas, at least one in five people live in a shortage area. Those areas also tend to have higher than average populations of people with disabilities.

These are typically neighborhoods where people are isolated by poverty. They are less likely to have jobs, less likely to have vehicles and access to healthy food, and more likely to face violence in and outside their homes.

As the presence of health care providers in low-income neighborhoods decreases, a growing body of evidence shows that poor people are more likely to be in poor health _ indeed, poverty itself can make people sick.

Think of a child with asthma living in a mold-filled apartment, a man with an infected foot living on the streets and sleeping in his dirty, wet shoes, or a person with diabetes without a refrigerator to store insulin.

Mary Mazul, director of population health management and integration at Wheaton Franciscan Healthcare in Milwaukee, described a conversation with a doctor she knows who works with mostly poor patients, who told her: "Mary, I'm a good doctor but my outcomes aren't so good."

"Health care can't fix poverty, homelessness, racism," Ms. Mazul said.

Early death is the simplest measure of compromised health. A Centers for Disease Control and Prevention study of U.S. counties conducted by University of Wisconsin researchers showed that the overall rate of death before age 75 was 417 deaths per 100,000. In low-income counties, the average was 480; in higher-income counties, the average was 345. The premature death rate was 39 percent higher in the poor counties that have been losing hospitals and doctors.

Disability rates also are higher among low-income residents. The Post-Gazette/Journal Sentinel analysis of U.S. Census data shows that in the lowest-income areas, an average of 12 percent of the population has disabilities. In the highest-income areas, the average is 5 percent.

It is those higher-income areas, where people are healthier and mobile, that are most likely to get new hospitals. At the same time that UPMC was closing its hospital in Braddock, it was constructing a $250 million hospital in Monroeville, where the average household income is more than twice as high.

"To me it's like free-market fire departments," said Robert Connolly of Common Ground, a Milwaukee community organization that started a health care cooperative last year. "Would anyone advocate building one on a corner across from another one to compete for fire business?"

Or closing down a fire station in a neighborhood with a higher rate of fires?

The past few decades of closures completed a chapter in which the founding principle of hospitals in the United States was stood on its head.

Most hospitals began as charitable institutions dedicated to the poor, often started by religious groups or social reformers. In Milwaukee, Lutheran deaconesses converted a hilltop farmhouse into a hospital for the poor in August 1863. It is the ancestor of the complex on Kilbourn Avenue that is now home to the nonprofit City on a Hill.

Originally named Milwaukee Hospital, it was often called "The Passavant" after William A. Passavant, a Pennsylvania-born Lutheran minister who founded hospitals, orphanages, seminaries and colleges across the country, including what is now UPMC Passavant in McCandless. Passavant brought German deaconesses to the United States to replicate the medical training and hospital model established in Dusseldorf, spreading the best care practices of the day.

He traveled to Milwaukee to work with local leaders who wanted to establish a hospital for the poor. Four Milwaukee doctors volunteered their services for the new hospital. "At that point, there was nothing here," said Diane De La Santos, executive director of City on a Hill. "It was all volunteer. The director was a pastor."

Individuals and congregations contributed to the effort, sponsoring beds or making donations of livestock or ice for the icehouse. Around the country, dozens of similar institutions were founded. Look on the website of a typical health care giant and you'll find a version of the humble beginnings story:

In Buffalo, N.Y., Sister Ursula Mattingly _ "one of God's trouble shooters" _ was the first president of the Sisters of Charity Hospital established in 1848. It is now part of the Catholic Health system, a network of hospitals and clinics that serves western New York.

In Washington Territory in 1856, Mother Joseph of the Sacred Heart arrived to find "a new world of physical hardships" where there were no hospitals "and little in the way of charitable services for those suffering the misfortunes of life on the frontier." She established the hospital that eventually expanded into today's Providence Health & Services, an $8.7 billion health care system with facilities in Washington, Oregon, Alaska, California and Montana.

In the 19th and early 20th centuries, local governments _ often counties _ began to open public hospitals, designed to serve the poor.

Most hospitals remained charitable institutions, but many began to accept paying patients as well. At Milwaukee Hospital, the first non-charity patients were admitted in 1873, at the rate of $5 per week. By the 1920s, hospitals served affluent as well as poor patients; medical schools became well established; and the American medical profession grew more powerful and prestigious.

The advent of private and public insurance reshaped the economics of health care.

During the Great Depression, administrators at Baylor Hospital in Dallas created the "Baylor Plan" _ the first prepaid hospital insurance plan in the United States and predecessor of Blue Cross. Insurance for physicians' services was also developed in the 1930s.

The success of these programs encouraged more insurers to enter the health care market, and a labor shortage during World War II led to health insurance becoming part of many benefits packages, spurred by government tax incentives. Employers found that offering a health insurance package was a way to attract workers, and the federal tax write-off companies got for providing the benefit gave an incentive to make it a regular practice.

The entry of the government in the health insurance market with Medicare and Medicaid in the 1960s put many more Americans on an insurance plan, and more and more employees had private insurance through their employers.

By 1968, 80.8 percent of Americans had health insurance coverage, according to a statistical report published by the U.S. Centers for Disease Control and Prevention.

"Our whole pricing system is illogical and unnecessarily complex," said George Brown, CEO of Legacy Health Care in Portland, Ore. "It's a system created by the bright idea during World War II of giving employers tax breaks."

That created new incentives and erased others.

Because a third party was paying, patients weren't deterred by the normal market mechanism _ cost. And because health care providers were being reimbursed on a fee-for-service basis, they had little incentive to keep those costs down. Health care got more and more expensive. It also became lucrative for many providers and insurers, spawning a booming _ and competitive _ new industry. In the 1960s, the number of hospitals climbed, reaching its peak in 1970.

Those structural economic changes meant hospitals got most of their revenue from selling specific services to private and government insurers rather than seeking donations and endowments to finance general care for whoever needed it, said Martin Gaynor, E.J. Barone Professor of Economics and Health Policy at Carnegie Mellon University.

"If the way you survive is by selling stuff, why are you going to behave differently from other big businesses?" Gaynor said.

Business boomed and hospitals expanded as insurance reimbursement rewarded tests, treatments and hospitalization.

The Milwaukee Hospital complex, which changed its name to Lutheran Hospital in 1966, continued to expand, with additions in 1970 and 1974.

Hospitals competed with one another to get patients and began to acquire or merge with other hospitals and to buy physician practices to get their patients.

But even as hospitals added beds, technology and changes in Medicare were reducing the need for them. In the 1980s, Medicare switched to paying a fixed amount for specific services. This gave hospitals an incentive to send patients home as quickly as possible, since they got paid the same whether a patient stayed three days or seven days, for example, after a given procedure.

Advances in technology made it possible for outpatient care to replace inpatient care for many procedures. The demand for health care services continued to grow, but many hospitals struggled to fill their beds. That led to chaotic patterns of growth and retraction.

Health care experts recognized that competing hospitals were overbuilding and duplicating services and expensive equipment, which increased the costs of care. Nevertheless, expansion continued across the nation. When the supply exceeded demand, mergers, acquisitions and closures resulted.

The federal government designates areas with fewer than one physician per 3,500 residents as "health professional shortage areas." The Post-Gazette/Journal Sentinel data analysis shows that the majority of those are in urban poverty corridors (most of the rest are in rural areas). It also shows that those "health care deserts" expand when hospitals close.

The residents _ less likely to have cars _ often lack access to family doctors, as well as dentists, psychologists and psychiatrists.

The physicians who remain in poor neighborhoods face added challenges.

Patients have lower incomes so are less able to pay for services out of pocket, said Darrell Gaskin, deputy director of the Hopkins Center for Health Disparities Solutions at Johns Hopkins Bloomberg School of Public Health. Doctors must deal with reimbursements under Medicaid that are lower than those from private insurers or Medicare.

"The supply of physicians and other health care providers in minority neighborhoods may be affected by lower quality of community amenities," Gaskin said. Lack of medical laboratories, medical supply companies, financing and credit for small business all act as barriers, he said, and drive up the cost of operating a practice.

Meanwhile, medical students facing education debt, which has soared in recent decades, are more likely to choose to enter higher-paid specialties, such as an anesthesiology or oncology.

Two-thirds of U.S. physicians are now specialists, well above the level in other rich democracies, where roughly half fall into that category. The United States has only about half as many family doctors per thousand people as other developed countries.

The number of medical students entering family practice training dropped by 50 percent between 1997 and 2005, according to American Academy of Family Physicians data. Most now become specialists, who are more likely to be affiliated with large hospitals where most patients are privately insured.

(c)2014 Pittsburgh Post-Gazette

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