Kevin Dahill (not to be confused with the assemblyman) said it was an “appropriate move,” considering the state of hospitals.
Lower demand for health care
In explaining why a decision to close a hospital would be taken, CEO Lundquist cited several significant pressures on revenues.
One came in part from the significantly lower federal reimbursement rate received in Ulster and Delaware counties as compared to competitors in Orange and Dutchess counties, considered part of the greater New York metropolitan area. Also, the onset of the recession derailed many a financial forecast. Lundquist said that no one had anticipated how quickly the economy would collapse.
A second pressure was caused by lower demand for health care, particularly the postponement of elective procedures. “We’ve grown market share,” said Lundquist, “but in a shrinking economy.”
The final pressure came from the nationwide trend for physicians and other care providers themselves to offer out-of-hospital services that hospitals had traditionally provided. The recent formation of larger physician groups with greater pooled resources has only accelerated this trend.
After the state Berger Commission accepted a plan to integrate the two Kingston hospitals in 2007, HealthAlliance has separated their functions, with Kingston Hospital providing emergency and acute-care services and Benedictine Hospital caring for patients with chronic conditions. Considerable adjustment was necessary. The “volatility of the two [hospitals] coming together,” as Lundquist described it, created a complex job for management. A change to a single-hospital “campus” will entail considerable further reconfiguration.
The HealthAlliance model is focused on continuous improvements in the quality, efficiency and reliability of care. Recent efforts to accelerate the clinical integration of patient-centered care by primary-care providers, added Chief Strategy Officer Josh Ratner, is a meaningful way to encourage interest in the evolution of the model.
HealthAlliance will emerge from this necessary but difficult downsizing “stronger and better, but not bigger,” said Lundquist. “That’s better than saying ‘smaller.’ People don’t like that.”
With additional reporting by Jesse J. Smith and Hugh Reynolds.
