Health & Human Services

Closing Time: A Master Plan for Doing More with Less

Hoping to shore up its ailing hospital industry, New York is shrinking the number of health care facilities in the state. It is doing so by using a process similar to the way the Pentagon closes military bases.
by | February 2006
 

Hoping to shore up its ailing hospital industry, New York is shrinking the number of health care facilities in the state. It is doing so by using a process similar to the way the Pentagon closes military bases.

A bipartisan commission is drafting suggestions for facilities to shut down, merge or reorganize. New York's concern is that if hospitals close purely on the basis of free-market Darwinism, then access to service in rural areas and inner cities could suffer.

The downsizing is needed because overcapacity has made it difficult for many hospitals in New York to stay afloat. Not-for-profit hospitals alone lost $127 million in 2004--their seventh straight year in the red. More than a dozen hospitals have shut down in the past few years. "Our hospital industry is on the brink of collapse," says David Sandman, the commission's executive director.

Even the industry prefers a master-planned contraction. "We have a social imperative to override the market," says Kenneth Raske, president of the Greater New York Hospital Association. All communities will benefit when a smaller number of healthier hospitals can afford to invest in technology, he notes. "Those kinds of investments can't be done when you have a number of hospitals limping along."

The commission's suggestions are due by December 1. They take effect unless the legislature rejects the list in its entirety.

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