Crain’s New York Business Op-ed: Hospital closures again take center stage

New York State is blessed with some of the finest hospitals in the world. But for decades we have struggled with the question of how many hospital beds are too many, and how to make sure that everyone has sufficient access to the beds we do have.

Recently, officials have discussed plans to shutter — or at least substantially downsize — SUNY Downstate Medical Center, a vital safety net provider in Brooklyn. After a groundswell of support, language was included the 2024-25 state budget that, with the help of $100 million in operating funding and $300 million in capital funding, keeps the hospital open for another year, and establishes a nine-member community advisory board comprised of state officials and community representatives charged with recommending changes to the facility. These efforts will undoubtedly occupy a lot of attention over the next several months, and this issue will certainly be revisited.

This increased focus on hospital capacity and resulting activism all points to the need for better access protections, and, at minimum, greater information about changes to the healthcare delivery system. New York’s “certificate of need” (“CON”) program is the first line of defense in ensuring public input into such changes. However, not everyone feels the same way about CON. While there are bills pending in the Legislature to expand public notice requirements under CON, or even impose a total moratorium on hospital closures, there are just as many efforts to reduce CON requirements.

In 1964, New York was the first state to try to allocate healthcare services, including hospital beds, in a coordinated way, when we established a comprehensive CON program aimed at ensuring no new hospital was built unless it could be proven that there was a public need for it. That worked well enough for many years, but then demographic shifts resulted in too many hospital beds being located where they were not needed, and (arguably) not enough beds where they were needed. This led to an “arm’s race” among providers to expand service options and make sure empty beds are filled, resulting in increasing and often unnecessary cost.

All of this culminated in 2005 in the establishment of a state commission (the “Commission on Health Care Facilities in the 21st Century,” colloquially known as the “Berger Commission,” named after its chair, Stephen Berger), that was charged with rightsizing the number of beds statewide, and helped drive $1.5 billion in funding to help support necessary changes. The resulting closures and mergers were by no means pain-free, but generally proceeded in an orderly manner that protected patient access to care.

Since then, we have seen what can happen when right-sizing does not happen in an orderly way. The venerable St. Vincent’s Hospital in Manhattan – which had served the Greenwich Village area for 160 years, treating the survivors of the Titanic in 1912 and victims of the World Trade Center attacks in 2001, and in between being one of the first providers to address the AIDS crisis in the 1980s – closed in 2010, leaving state officials scrambling to ensure replacement care for stranded patients. Other hospitals followed suit in subsequent years, with issues concerning access to care being highlighted in stark relief during the COVID pandemic, when hospitals serving vulnerable populations were disproportionately impacted.

All of this, and what occurred during the COVID pandemic in particular, has resulted in expanded public attention to the issue of access to hospital services. In 2021, the state enacted a requirement that every CON application include a “health equity impact assessment” identifying the impact the project will have on access. This gave patients the information they needed to oppose the first project to file such an assessment – a proposed closure of a birthing center in Troy, which has recently been suspended, with the help of a state grant to keep the center in operation for another five years.

As is so often the case, the right choice is probably somewhere in the middle. In many cases, more flexibility in the CON system might be appropriate. But it is difficult to argue that more information about proposed projects should not be made available to the public – and the public should have a fair chance to respond. The right to notice and the opportunity to be heard is fundamental to our notions of due process, and nowhere is that concern greater than when it comes to health care.

Mark Ustin is a regulatory lawyer and lobbyist in the Albany Office of Farrell Fritz, P.C

As published in Crain’s New York Business, June 13, 2024:

https://www.crainsnewyork.com/op-ed/hospital-closures-again-take-center-stage-new-york