Forming a team

The region may have been caught by surprise by news that one of Kingston’s hospitals may close, but there’s a larger perspective. The entire business of health care is now changing even faster than it had been expected to change.

The revolution in health care policy isn’t limited to Obamacare, or to Medicare and Medicaid reform. Rather, a series of ripples are spreading to hospitals, doctors, insurers and employers.

Hospitals are trying to anticipate the changes. On June 6, two of New York City’s largest hospital systems announced they’d reached agreement on a possible merger, creating a behemoth. NYU Langone Hospital Center, an academic medical center, is looking to combine with Continuum Health Partners, which runs a group of community hospitals, including Beth Israel and the two St. Luke’s-Roosevelt campuses.

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Merger is an increasingly popular response to a system which has been squeezing hospitals through lower reimbursements coupled with demands for better and more efficient service. The worry now is that the pendulum will swing too far the other way. Will greater coordination among providers give them more clout, limiting patient options, raising fees and affecting insurance rates?

“Economists have for some time now worried about the ceaseless consolidation on the supply side of the health care market, facing a much more splintered payment side with less market power,” Uwe E. Reinhardt, a widely respected health economist at Princeton University, told The New York Times.

Better coordination sought

The state, which regulates hospitals, thinks better coordination among all providers is the correct response to the system’s ailments. “If you look at this from a national perspective, 17 percent of the gross domestic product goes to health care in the U.S.,” said Jason Helgerson, deputy commissioner of health insurance for the state Department of Health (DOH). “That’s more than twice the rate of any other developed country. It’s been a drag on the economy and it’s put a lot of downward pressure, particularly on price, within the health care delivery system.”

While insurance companies, businesses, Medicaid programs and Medicare have all been trying to pay less for services, the demand for services has been increasing. “In essence, we’re asking providers to do more while paying less for those services. That’s been a recipe for a very strained health care delivery industry not just in New York, but across the country.”

For some New York hospitals, the pressure’s been too much. Mergers, begun by the Berger Commission, are now being driven by the marketplace.

In March, Buffalo’s Millard Fillmore Gates Circle Hospital closed after 150 years. Its employees and equipment were shifted to two other Kaleida Health facilities — the new Gates Vascular Institute and the Buffalo General Medical Center. Crain’s New York Business News has been humming with features on the successful mergers in New York City and on Long Island.

Organizing the physicians

The idea, said Lora Lefebvre, deputy director for health systems management at the state DOH, is to create a team of health care practitioners, starting with individual physicians, who coordinate patient care. “Physicians, until now, haven’t been particularly well organized,” noted Lefebvre, “and they haven’t been really organized about working with hospitals and clinics.”

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