HealthAlliance restructuring the right thing, says industry insider

Kevin Dahill.

The initial reaction? Shock and horror. After the upheaval of merging Kingston’s two hospitals just four years ago, HealthAlliance of theHudsonValley’s CEO, David Lundquist, announced earlier this month that HealthAlliance may be forced to downsize — close either Kingston or Benedictine — because of financial challenges. When the news broke, public and community leaders were stricken with woe and fears of painful job losses.

But the reaction was different from a veteran industry insider. Kevin Dahill (not to be confused with Assemblyman Kevin Cahill, who says he intends to host public hearings on the future of Kingston’s hospitals), president of the Northern Metropolitan Hospital Association (NMHA, formerly known as Normet), called HealthAlliance “courageous.”

NMHA is a trade organization for the regional hospitals from Westchester to Sullivan County. Dahill said his job was twofold: represent the hospitals to local, state and federal government and advise hospitals on emerging trends in the business of health care.


Dahill said the news from Kingston didn’t surprise him and the downsizing issue isn’t limited to our town. “I think the stage was set, quite frankly, when the Berger Commission made a strong and very aggressive recommendation,” Dahill said. “Everyone who’s connected with the health care delivery system agrees that the system, as it exists right now, is not sustainable. The general sentiment that’s emerging from all the payers — government, insurers, employers and so on — is that we’ve got to get away from a volume-driven system and we’ve got to make the delivery of health care less institution-centric. We’ve got to put more emphasis on wellness and primary care. We’ve got to cut down the number of readmissions. We’ve got to, wherever we can, keep people out of the hospital.”

Dahill is aware of the negative consequences of these trends for hospitals. “We argue to public officials that the more you make cuts to these institutions, the more likely you’ll see unintended consequences.”

But he says the reality is that there is going to be a need for less hospital capacity in the future. One important consequence is the need to determine what to do with excess facilities after the transformation to new models of care.

“One answer is to try to find a way to repurpose the facility you already have,” he said. “We see it across the country, with transitions to medical offices, senior-citizen housing, ambulatory surgery centers or any number of things. That is determined by the state of the plant and also real-estate considerations. As HealthAlliance looks at how they want to redefine themselves, they’ll have to determine if they have the need for the facility.”

Another option is to sell whichever campus is seen as unnecessary and use the proceeds to reinvest in the remaining facility.

Jobs will change, not vanish

Unless the hospitals move aggressively toward doing new things that create jobs, it’s likely a smaller proportion of health care workers will work for the hospitals in the future. “I would suspect,” Dahill said, “that as it relates to the employment, at the end of the day a lot of that employment might remain in place. They’re not folding up their tent and moving oversees as so many companies have. They’re staying. There may be some losses and there may be new jobs. There may be need for retraining, but there will be jobs.”

Dahill said restructuring was happening “in spades” in Brooklyn right now. The overcapacity situation there has risen to such a crisis level that the state has had to step in. That’s very different from Kingston.

“In Kingston, they’ve rationalized services as they were told to do,” he said. “Now there’s looking at whether there’s actually a need for two hospitals. If you don’t start thinking ahead and planning ahead, this will rise to a crisis.”