Dean's Newsletter
Archive of previous newsletters
People, Space and Money--Part 3: Hospital Beds
December 8, 2006
In the past two newsletters, I have presented a framework for thinking about how we can best utilize our financial resources to maximize the output of our various missions. In particular, we have addressed the specific issue of allocating people, space and money in the context of research. That is, given that we have exhausted our supply of research space, how can we best configure our investigators in re-engineered space in the short term to continue the growth in our research enterprise, while waiting for an expansion of overall research space in the future?
A similar problem exists on the clinical side. We have the kind of problem others would like to have. That is, our success over the past decade in becoming the dominant local and regional center for health care has prompted such a large increase in demand for our inpatient services that it threatens to outstrip our physical capacity to provide these services, at least in our current space configuration. What a striking contrast to other areas in New York State! As you may have read in recent weeks most areas of the State have substantial excess capacity. The statewide hospital occupancy rate has fallen from 83% in 1983 to 65% in 2004. On a staffed bed basis, approximately one quarter of hospital beds in NYS are currently unoccupied.
To right-size NYS health care facilities, Governor Pataki and the state legislature created the Commission on Health Care Facilities (the "Berger Commission"), which recently issued its recommendations. These included downsizing and mergers of major hospitals such as the three SUNY hospitals in Syracuse, Brooklyn and Stony Brook, and of Kaleida Health with Erie County Medical Center (affiliated with University of Buffalo Medical School).
These recommendations are designed to correct excess bed capacity across specific areas of New York State. In Rochester, however, and particularly at Strong Memorial Hospital (SMH) and Highland Hospital (HH), there is no question that we have more patients than beds. On the day I write this, the occupancy rate is 106% at SMH and 85% at HH. As has recently been pointed out to staff by Kathy Parrinello, PhD, Strong’s Chief Operating Officer: "It is painfully clear to all who work in the SMH Emergency Department and those who spend any time consulting in the ED, that the current volume of patients served at SMH exceeds the current bed capacity." Unfortunately, there is no better example of this point than the 30-40 admitted inpatients who are often required to "board" in the Emergency Department at SMH while awaiting a bed.
Data on trends over the past 5 years are instructive. In FY 2001, there were 35,100 patient discharges at SMH and 12,700 at HH. By FY 2006, demand for inpatient care at SMH had grown enormously, but SMH was only able to increase discharges to 38,300 due to capacity constraints. Therefore, little by little, clinical programs were moved to HH, where discharges grew 45% to 18,400. The growth in "observation" cases (i.e., hospitalized patients who are discharged in less than 23 hours) have added to the inpatient bed crunch: at SMH, such cases rose from 3,361 in 2001 to 11,451 in 2006, a 240% rise. Similar figures on a smaller scale occurred at HH (from 813 to 2,179).
How did we get to this point? The answer lies in the growth of faculty numbers, growth in regional referrals, and growth in Emergency Department volume in the context of a shrinking pool of beds in the community. Beginning with the last factor first, Rochester had 6 hospitals and a total of 2600 hospital beds as recently as 1998. Due to competitive forces in the community, however, some hospitals became economically nonviable. In 1998, the Unity Health System converted St. Mary’s to a long-term care facility, removing 210 acute care inpatient beds. Then, in 2001, ViaHealth closed The Genesee Hospital, removing another 385 inpatient beds. Overall, in 1998 acute care beds per capita were 3.4 per 1000, while today this figure stands at 2.6 beds per 1000, which is among the lowest in the nation. For comparison, the number of beds per 1000 people is 3.4 in Erie County (Buffalo) and 4.3 in Onondaga County (Syracuse). Concurrently, as the number of hospital beds decline in Rochester, the population is aging and requiring more medical care.
It is simplistic, however, to link the current space crunch at SMH to the closure of The Genesee Hospital in a cause-and-effect manner. Most of the general surgeons and orthopaedists at Genesee moved their practices to Rochester General or Park Ridge Hospitals. The obstetrician-gynecologists who moved to the Strong Health System transferred their practice to Highland, not Strong. And the internal medicine practices that moved from Genesee to Strong did so a year before closure of Genesee and largely maintained their surgical and other referrals to former Genesee specialists, who are now working in other hospitals.
A more cogent explanation for the bed crunch at SMH lies in the growth of our clinical faculty, in referrals from the region, and in E.D. volume. These will be discussed in turn, but I must first emphasize that the extraordinary success of Strong and Highland over the past decade is attributable above all else to the superb management team who have guided us so adeptly through these turbulent years—Hospital President Steve Goldstein, Chief Financial Officer Len Shute, Chief Operating Officers Kathy Parrinello (SMH) and Cindy Becker (HH), and Nursing Directors Pat Witzel (SMH) and Donna Johnston (HH), among many others—along with their dedicated hospital staff.
Between 2001 and 2006, our full-time clinical faculty grew from 754 to 960 based on membership in the University of Rochester Medical Faculty Group. Understandably, the increase in faculty numbers had a dramatic effect on the numbers of outpatient visits seen by members of URMFG. Patient visits grew from 1,080,000 in 2001 to 1,360,000 in 2006, a 26% increase. More patients seen in the office translates to a greater need for inpatient beds. This growing foundation of clinical activity has, in turn, supported burgeoning specialty programs in liver transplant (now the largest in the nation), children’s heart surgery, joint surgery, bariatric surgery, comprehensive cardiac care, reconstructive pelvic surgery, and world-class programs in keratoprosthesis and in robotic prostate surgery, among many others. None of this is linked to the prior closure of hospitals in Rochester.
Another factor contributing to increased demand for inpatient beds is the growth in our regional referral network. In FY 2002, there were 3,034 requests for transfers to SMH from surrounding counties, of which 2,754 could be accommodated. In FY 2005, there were 3,539 requests for transfer, about a 17% increase, of which we will be able to accommodate 2,932. Part of the stress isn’t only the dramatic increase in the number of patients admitted to SMH from the region, but the stress associated with having to turn away 607 patients who sought transfer to SMH but couldn’t be accommodated.
One effect that can, indeed, be linked to the closing of Genesee Hospital is a dramatically increased number of patients seen in the E.D. The E.D. caseload at SMH increased from 77,285 in 2001 to 91,925 in 2006. At HH, ED cases rose from 22,346 in 2001 to 27,600 in 2006. Moreover, much of this increase is in a patient population who have only Medicaid insurance, which does not reimburse us adequately for the cost of providing care. During the 2001-2006 period, SMH pure Medicaid ED visits increased from 7,500 annually to 12,000, and this does not count Medicaid "managed care," which also increased substantially during this time. As an additional stressor, there has been a dramatic increase in the numbers of patients who do not have any form of governmental or commercial insurance coverage and who cannot pay for their care. Total uncompensated care at SMH and HH increased from $18.7 million in 2001 to $33.6 million in 2006. While such care is consistent with our mission to serve all who pass through our doors in need of medical care, filling available beds with an increasing number of patients who don’t have insurance or financial capability places substantial financial stress on our ability to serve all of our patients.
In terms of the concepts introduced in the last newsletter, i.e., maximizing output (in this case patient care) subject to a budget constraint, how can we at URMC respond to the increased demand for hospital services? In the very short term, under a fixed space configuration, the only solution is to hire more personnel to take care of patients in areas of the hospitals not intended for inpatient care (e.g., ED "boarders"). This approach would increase the slope of the budget constraint and increase patient care output in the short term. Such an approach is not acceptable in the long run, however, because the quality of care cannot be optimized in such an environment. Therefore, hospital leadership is working on ways in which currently available space can be reconfigured to create more inpatient beds as an intermediate-term solution.
As an example, a psychiatric inpatient ward is being converted to a 10-bed medical unit on 1-9300; this unit will open in February 2007. In July 2007, renovation of 8-1400 will result in seven incremental ICU/intermediate care beds. In addition, faculty in the Department of Emergency Medicine will be moving their academic offices to an off-site location early in 2007, adding 20 new observation beds in the second floor above the emergency department, adjacent to the existing observation unit. A little bit further out, 4-1200 will be renovated in late 2007, adding six medical beds. And even a little further out, a relocation of the GCRC to new quarters will permit the creation of 15 inpatient beds on the 4th floor of SMH, which will provide an opportunity for pediatrics to offer much-needed private rooms to their patients and families.
At Highland Hospital, we are now approaching census levels of 250 patients -- a far cry from a census of 75 patients back in 1999! Operation at near-full capacity has led to renovation of inpatient units and commencement of the Emergency Department expansion plan last month. The ED will be completed in spring of 2009, yielding much-needed bed capacity. HH is also creating an outpatient orthopaedic center, which will be completed spring 2007, and is relocating its Breast Care Center off site. HH will also be constructing an additional 400 spaces for cars in a parking garage across the street from the hospital to accommodate its growth.
As well, Strong Memorial and Highland Hospitals are working together to implement changes in operations that will allow us to increase admissions in addition to those that result from space reconfigurations. As some examples: HH will be offered as an option for all patients initially seen at SMH but suitable for admission to HH if no inpatient beds are available at SMH; Electronic bed boards are being used to facilitate timely movement of patients from the ED and post-op areas to inpatient beds; Early-in-the-day discharge protocols are being used to open up beds earlier in the day; a number of strategies for reducing length of stay frees up beds for incoming patients in the ED or elsewhere; and our social workers and care coordinators are collaborating with long-term care colleagues to facilitate timely discharge to long-term care facilities.
These initiatives will improve the current space crunch but continued growth of the clinical enterprise will exhaust the additional capacity that results from reconfiguration. Additional inpatient beds will be needed, and some type of long-term acute care hospital ("LTACH") program will be required to service our patients who need extended hospitalization due to such things as ventilator dependence or long-term complex wound care.
As part of the URMC strategic planning process led by Dr. Berk, a number of options are being considered. Teams of faculty and hospital staff organized into working groups that address integrated disease programs--such as cancer, chronic disease, neuroscience, and cardiovascular disease--are hard at work developing plans for their programs, each of which will have space implications. Will a new inpatient tower be needed? Will there be an opportunity to create a more distinct Golisano Children’s Hospital at Strong? Is there a rationale based on the likely future of health care delivery, for the integrated disease programs each to have a distinct physical presence? What is the role of Highland Hospital? How will an LTAC fit in? How should ambulatory surgical services be expanded?
There is clearly more to be done in each of our mission areas. The fact that we have more research to do, and more patients to take care of, than can be done optimally in the space available is a better problem to have than the converse, as its solution implies growth and opportunity in the future. At this time of strategic planning for the University and Medical Center, we invite your ideas about short- and long-term initiatives that will allow us to be opportunistic and to grow.
Meliora,
David S. Guzick, MD, PhD
Dean, School of Medicine and Dentistry
