I wrote about "rightsizing" before the Berger Commission

In some ways an article I wrote for the Syracuse newspapers three years ago (“Right-Sizing Out Hospitals”) anticipated the work of the Berger Commission. [1]

On November 28 the New York State Commission on Health Care Facilities in the 21st Century, chaired by Steven Berger, recommended the closing of nine hospitals across the state, most of them in New York City – and more significantly, it recommended the restructuring of 48 hospitals – closing about 4,200 staffed hospital beds in all. The Commission also wants to close seven nursing homes and restructure 14 others, leading to a reduction of some 3,100 nursing home beds. All this activity will reportedly save $1.5 billion in health care costs annually.

In our area the Commission wants CGH’s nursing home beds to combine with those of Van Duyn for a total of about 500 nursing home beds. It also wants CGH to assume control of Van Duyn. The Commission did not change CGH’s licensed hospital capacity of 306 beds.

The Commission’s other decision involves Crouse Hospital and SUNY’s University Hospital. The Commission wants them to merge as a private hospital that is not a part of the SUNY system.

As I said in testimony submitted to the State Senate Health Committee on December 1, I support the work of the Commission, and I believe its recommendations are important. However, the devil, as they say, will be in the details of state oversight and assistance. How much money will the state provide and how much flexibility will the state permit as organizations go about implementing the Commission’s decisions? Without adequate funds to plan and invest, the Commission’s recommendations will be impossible to carry out. That is true for CGH and Onondaga County and, I believe, it is true for other institutions affected by the Commission’s decisions.

Most of the local news coverage has centered on the decision to combine Crouse Hospital and University at “approximately 500 to 600 inpatient beds.” [2] Today Crouse and University Hospitals have a combined total of 942 licensed beds, but their combined average daily census is actually 563, according to the CNY Regional Advisory Committee. [3] That is apparently how the Commission determined the 500-600 size.

You may remember that not too many years ago CGH and Crouse Hospital were affiliated under the Health Alliance of CNY. [4] During that time I served as Crouse’s Chief Operating Officer, and as such, I participated in the 2001 discussions regarding a possible merger of Crouse and University Hospitals. I had an opportunity to see first hand the positive potential of a Crouse-University merger, as well as some of the difficulties involved in bringing together these organizations.

After my return to CGH, I wrote an opinion article for the Post-Standard that reminded Syracuse that CGH came into being in the 1960’s as a result of community planning, and I expressed hope that through community planning a Crouse-University medical center might yet be achieved. Headlined “Right-Sizing Our Hospitals,” my article appeared on December 22, 2003.

In that article, I said

The much-discussed and much-delayed affiliation between University Hospital and Crouse Hospital makes sense, and a resumption of their collaborative discussions is to be welcomed. This does not minimize the complexities involved or the understandable interests of stakeholders such as unions, faculty, and private practitioners. But the ultimate stakeholders are the patients of Central New York and those who pay for their care.

I also advocated that

such an academic affiliation [be] in the 500-bed range. That size approximates the combined effective occupancy of the two hospitals as they exist today, it fosters continued efficiency improvements, and it assures the best and highest use of all existing hospital assets.

[1] The report of the Berger Commission is at this web address: http://www.nyhealthcarecommission.org/final_report.htm
Click on “Final report.”

[2] “Final Report of the Commission on Health Care Facilities of the 21st Century,” p. 91. The Commission’s report, which is 240 pages long, is available at http://www.nyhealthcarecommission.org/final_report.htm For the section on CGH and Van Duyn, see pages 101-103. To see the Crouse Hospital-SUNY section, go to pages 91-93.

[3] Regional Advisory Committees, or RACs, were established to advise the Commission. The Central New York RAC heard presentations by 123 individuals during February-March this year. The Commission also met with 50 providers in the CNY region, some of them more than once. To see the CNY RAC’s recommendations, go to http://www.nyhealthcarecommission.org/final_report.htm and click on “Central” under Appendix 2 - Regional Advisory.

[4] The Health Alliance of CNY (1999-2003) was the licensed parent corporation that appointed the boards of both CGH and Crouse Hospitals. Both hospitals shared a single management team, which was expected to bring about a more complete integration of CGH and Crouse over a period of years. The Health Alliance was derailed by several factors, not the least of which was Crouse’s bankruptcy in 2001. CGH officially resumed operations as a separately licensed hospital in May 2003.

What the Berger Commission said

The Berger Commission[1] released its report this week after months of confidential deliberations. It calls for the closure of nine hospitals across the state and the conversion, affiliation, or reconfiguration of another 48 hospitals. In all, about one quarter of all New York State hospitals are directly affected by the recommendations – and that includes Community General Hospital.[2]

The report recommends that CGH combine its 50-bed sixth floor, which operates under a skilled nursing facility license, with the 526-bed Van Duyn Home & Hospital.[3] It recommends that the combined entity be controlled by CGH – that is, Van Duyn should be transferred from Onondaga County. And it recommends that the size of a restructured Van Duyn be about 500 beds. Today Van Duyn is licensed for 526 beds, representing about 17% of all nursing home beds in Onondaga County.

The Commission did not recommend any changes in CGH’s licensed capacity of 306 acute care beds.

Van Duyn has been part of Onondaga County for 179 years.[4] In recent years, the County has incurred significant financial losses at Van Duyn. During its budget process last October, the County debated Van Duyn’s role and affirmed it would continue to be part of the government’s responsibility, including its safety net patient services. The Berger Commission wants to see the safety net responsibilities continue at Van Duyn under CGH sponsorship.

The Berger Commission recognizes CGH’s future needs for patient care, including the need for more private rooms. The Commission sees value in “an integrated continuum of care on the campus” involving CGH and Van Duyn and also sees potential reimbursement advantages in such a restructuring. All this, of course, “will require capital (investment) support,” in the Commission’s words.

During the review process, the Commission visited Syracuse several times, meeting with County Executive Nick Pirro and with me. The Commission also visited the campus and toured CGH and Van Duyn. With the encouragement of the Commission, CGH studied options available to the County and to CGH, and these preliminary study results were shared with the Commission and the County.

Onondaga County and CGH work well together. As I said yesterday in testimony for a special hearing of the State Senate Health Care Committee, “Onondaga County is among the best-managed county governments in the state, and its decision-making process is thoughtful and businesslike. Onondaga County has been committed to operating Van Duyn as a public, safety net institution, and Community General has supported that position.”[5]

Because of changes in state law made this year, Van Duyn is expected to return to break-even operations under County sponsorship over the next several years. With an end in sight to its losses, the County wants to keep operating Van Duyn. Both Onondaga County and CGH expected the Commission’s recommendations to require continued work together toward more coordinated care without a change in ownership or control.

However, the Berger Commission recommended changes that would effectively reduce government’s role as a health care provider. For example, it recommended privatizing the hospitals associated with the SUNY medical schools, including University Hospital of SUNY Upstate Medical University. It also recommended that Erie County Medical Center be privatized in Buffalo. In this context, the Commission’s recommendation that Van Duyn become private appears to be part of a philosophical change by state government.

The report raises a lot of questions which no one can answer today. Employees have asked what the report means for the location of sixth floor services, what it will mean if overall nursing home beds shrink by about 75, and what might be the potential impact on employment. It is too early to answer any of these questions, because the planning will take time. First, we have to see if the Commission’s report is rejected by the Legislature.[6] Next, we need to see how soon the state can provide the resources for the necessary business, legal, and financial planning. We also want to know how flexible the state will be in overseeing the complex planning we will have to undertake with Onondaga County and the State Health Department.

With a new Governor in 2007, we can expect many changes in the Health Department, starting with a new Commissioner of Health, yet to be named. It is clear the Governor-elect supports the report of the Berger Commission and has even suggested that the Commission recommendations do not go far enough.[7]

New York State does have funds available to assist institutions like CGH and Van Duyn in making changes. In 2005 New York has established the HEAL-NY program[8] with $1 billion in funds over four years to support hospital and nursing home restructurings, as well as health information technology. Two months ago, the federal government committed an additional $1.5 billion to New York to help close and restructure hospitals and nursing homes. [9]

The Berger Commission represents a significant change in state health care policy. In a short period of 18 months, the Commission studied the entire state, conducted hearings, visited numerous organizations and developed a wide-ranging roadmap for change. We have to give the process time to work, and we have to give the new Administration the opportunity to make changes in state government. For our part, CGH will work forthrightly with Onondaga County and with New York State in doing our best to achieve the ends recommended by the Commission.

As I said yesterday in my Health Committee testimony: “I…respect…the work of the Commission. The Commission members and staff accepted an enormous task. They completed their work in a thoughtful and timely fashion. The report is a positive step towards reform of the State’s health care system.”




[1] Popularly called the Berger Commission after its Chairman, Steven Berger, the Commission on Health Care Facilities in the 21st Century was created in the 2005 state budget process. It began its work in the summer 2005, and a tight deadline called for its final report by December 1, 2006. The report was released on November 28. Patterned after the federal Base Realignment and Closure Commission (BRAC), the state created the Berger Commission so that its recommendations become law unless they are rejected by the Governor before December 5, 2006 or by both houses of the New York State Legislature by December 31, 2006.

[2] Three of Syracuse’s hospitals are affected by the Berger report. In addition to CGH, the report calls for the merger of University Hospital and Crouse Hospital into a single institution in the 500-to-600-bed range. Today Crouse and University Hospitals have a combined total of 942 licensed beds.

[3] The full report of the Berger Commission is available on its website: http://www.nyhealthcarecommission.org/ Click on Download the final report. For the CGH-Van Duyn section, see pages 101-103.

[4] The County Sanitarium, which is now called Van Duyn Home & Hospital, has been part of Onondaga County since 1827. In 1957 Onondaga County deeded 42 acres of the Sanitarium’s property to CGH for the construction of the new hospital, which opened in 1963. In 1979 the Van Duyn Home & Hospital opened as newly constructed 526-bed facility on 65 acres.

[5] For a copy of my testimony before the Senate Health Committee on December 1, 2006, go to www.cgh.org. Click on CGH Family Letter.

[6] “Pataki and Spitzer Back Health Care Consolidation Plan,” New York Times, November 30, 2006: “Gov. George E. Pataki and Governor-elect Eliot Spitzer yesterday endorsed a plan to close or shrink dozens of hospitals and nursing homes across the state. Their support means that it will be up to the Legislature to decide whether to block the proposed downsizings.”

[7] “Berger, Spitzer see more health care cuts coming,” Journal News, December 1, 2006: “The plan to cut the state's health-care system proposed this week…represents merely a start on reductions that need to be made, the chairman of the commission that recommended the cuts said in an interview yesterday. Later, Gov.-elect Eliot Spitzer disclosed that the savings from the plan to state taxpayers from the proposed closings is likely to be minimal. He reiterated that the ‘bloated system’ needs to be further cut.”

[8] HEAL NY stands for the “Health Care Efficiency and Affordability Law for New Yorkers.”

[9] “In Move to Cut Hospitals, U.S. Will Pay New York $1.5 Billion,” New York Times, October 3, 2006: “The Bush administration has agreed to pay New York $1.5 billion over five years to help stabilize the state’s financially troubled hospital industry, state and federal officials said yesterday. In return, the state will move forward with shrinking that industry, cutting Medicaid costs, and sharply increasing the sums it recovers from Medicaid fraud.”

My testimony before the State Senate Health Committee

Testimony of Thomas P. Quinn
President and Chief Executive Officer
Community General Hospital, Syracuse, New York

New York State Senate Health Committee
Albany, New York December 1, 2006


Senator Hannon and the Members of the Senate Health Committee:

Thank you for the opportunity to testify before you today. I am Thomas Quinn, President and CEO of Community General Hospital in Syracuse, New York. Community General is a 306 bed community hospital. We also operate an additional 50-bed skilled nursing facility (SNF), attached to the hospital.

Community General and the Van Duyn Nursing Home, a 526 bed SNF owned and operated by Onondaga County, sit on contiguous parcels of land. In the last few years Community General and Van Duyn have begun to take steps to treat those parcels as a common health care campus.

Before I comment on the particulars of the Commission’s report as they relate to Community General, I first want to state my respect for the work of the Commission. The Commission members and staff accepted an enormous task. They completed their work in a thoughtful and timely fashion. The report is a positive step towards reform of the State’s health care system.

The Commission’s report calls for the establishment of a unified governing structure between Community General Hospital’s SNF and Van Duyn Nursing Home, under the control of Community General Hospital, and for the reduction, between the two facilities, of about 75 SNF beds.

Because of our proximity, and ongoing joint efforts, Van Duyn and Community General have had exploratory discussions about the possibility of uniting in some form. We also have discussed other, less encompassing joint activities that would benefit both Community General and Van Duyn. In my own meetings with Commission staff, I discussed the possibility of affiliating with Van Duyn. We at Community General engaged a consultant to undertake an initial review of what affiliated operations would look like, either by close coordination of planning and investment of the two institutions or by combining institutions in some form. Community General also surveyed the legal issues that uniting could present. We did not conclude that a united operation was the best alternative at this time.

Our discussions with Onondaga County, both prior to and since the Commission’s meetings, have been open and productive. Onondaga County is among the best-managed county governments in the state, and its decision-making process is thoughtful and businesslike. Onondaga County has been committed to operating Van Duyn as a public, safety net institution, and Community General has supported that position. We have believed that close collaboration could accomplish the “integrated continuum of care” envisioned by the Commission.

I must tell you that the issues presented by joint control are daunting. They begin with the transfer of a publicly operated facility to private control. Bond covenants need to be respected. Labor contracts need to be examined. Governance and operational issues need to be addressed. But above and beyond all that, there is the issue of finance. Van Duyn has been operating at a substantial deficit over the last few years. My understanding is that Van Duyn expects to operate at a $5 million deficit in its upcoming fiscal year. Community General does not have the wherewithal to fund any deficit, much less a deficit of that magnitude, nor do we have ready access to funds for the technical, business planning, and legal services that would be necessary to address the changes recommended by the Commission.

Obviously, if Van Duyn were placed under the control of Community General, we would expect to introduce operational and programmatic changes to address the deficit. But to even begin that process requires funding. The Commission’s report was released on Tuesday. We have not had a sufficient opportunity to determine how much would be needed in planning and transitional funding. If the Legislature accepts the Commission’s report, Community General would need assurances of adequate state support for this process. Community General cannot allow itself to be weakened by a proposal that is intended to strengthen the delivery of health care.

I would also like to call the Committee’s attention to the special role that the Van Duyn Home has played in Onondaga County. Van Duyn has been the nursing home with a significant safety-net mission. That means that Van Duyn continues to admit a large number of residents on Medicaid-pending status. At best, that presents a significant cash flow problem for Van Duyn’s operation. The Commission’s report calls upon Community General to continue to fulfill that role. That is not an obligation a not-for-profit community hospital should be expected to bear by itself.

Community General Hospital shares a vision with Onondaga County to develop a health care campus from our contiguous sites. We see the advantage of the integrated campus concept endorsed by the Commission. We could foresee joint operations. But achieving this will require time, resources, and a public commitment to support the special role that Van Duyn plays in Onondaga County.

Thank you for hearing my testimony today.