Health plan likely to shut Baltimore-area hospitals 7 of 27 facilities in area could close, but quality would remain, analyst says

September 26, 1993|By Gilbert A. Lewthwaite | Gilbert A. Lewthwaite,Washington Bureau Staff Writer Patricia Meisol contributed to this article.

WASHINGTON -- As many as seven of the 27 hospitals in Baltimore and its surrounding counties could close under the Clinton health reform plan, putting thousands out of work, according to Gerard F. Anderson, director of the Johns Hopkins Center for Hospital and Finance Management.

The local hospital work force of 47,000 would likely shrink to between 35,000 and 40,000 by the year 2000, with the brunt of the losses born by clerical and administrative staff, said Dr. Anderson, a nationally recognized expert on health care administration.

His projections were based on a study of Minneapolis-St. Paul after the Twin Cities adopted health reforms similar to those proposed by President Clinton.

Though Dr. Anderson said he did not believe the quality of patient care in the Baltimore area would suffer under the reforms, his predictions of hospital closures and job losses illustrate the massive shake-up looming for the nation's health care industry if the president succeeds in squeezing the waste and inefficiency from a $900 billion system.

Job losses in the health and health-related industries, which employ more than 9 million nationally, are likely to be substantial, analysts say. Scores of hospitals and insurance companies would close; others would pare their operations or eliminate entire departments devoted to paper-shuffling under the current system.

Estimates of national job losses due to health care reform range from tens of thousands to millions. Administration officials have talked of 200,000 jobs being lost nationally, although Mr. Clinton last week said there would be a net gain.

The Republicans put the job loss figure at 1 million.

Some of those job losses would come from small businesses that might be forced to lay off workers or close their doors if they are required to pay for health coverage for their employees.

But the health industry would lose the most jobs if Congress agrees to revamp the system, although no one knows exactly how many.

In Maryland 174,400 jobs are tied directly to private health services, with 12,000 other jobs in the public sector, according to the state Department of Economic and Employment Development. Official state statistics were not available for such support sectors as health insurance and medical equipment manufacturing.

The projections of local hospital closures by Dr. Anderson were based on a study of developments between 1971 and 1990 in Minneapolis-St. Paul hospitals, which operate under market-oriented reforms similar to the Clinton plan. He compared the Twin Cities experience with what happened in Baltimore during the same period.

In Baltimore, the number of hospitals increased from 25 in 1970 to 27 in 1990 and the number of beds increased from 8,225 to 8,274, representing a change from 3.9 to 3.5 beds per thousand population, and producing an occupancy rate of 81.1 percent. In Minneapolis-St. Paul, the number of hospitals shrank from 35 to 29, and the number of beds shrank from 10,193 to 7,480, or from 5.1 to 3.0 beds per thousand, producing an occupancy rate of 68.7 percent.

Extrapolating from this study, Dr. Anderson said: "What I would expect to see happening is hospitals closing in the Baltimore area and hospitals downsizing in terms of the number of beds they would have.

"You are probably going to have to travel a little further to receive your care. Your neighborhood hospital may close, or if you want to go to a religious hospital -- that might not be part of your health plan. You are going to sacrifice a little access and availability, but I am not expecting a reduction in quality."

Smaller hospitals at risk

He expected smaller urban hospitals with low occupancy rates and high costs to close.

"Some of the hospitals will not be asked to the dance," he said. "These hospitals will have to try to survive outside of the health plans. In a fairly short period of time, they would close."

For a large, successful hospital like Johns Hopkins, he said, the major cuts are likely to come in the clerical and administrative staff.

Dr. Anderson said doctors and nurses could be relocated from hospitals to outpatient departments as the emphasis on health care switches to home, primary and preventive care. Medical specialists might be squeezed as tight cost controls are imposed.

A major concern at Johns Hopkins, if the Clinton plan is passed, would be finding sufficient funds to continue its research and teaching programs. Funding is included in the reform plan, but whether it would be adequate to sustain the hospital's programs is not known.

HMOs aren't nervous

One sector feeling reasonably confident -- the state's 19 health maintenance organizations. They employ 6,000 and provide care 1.3 million Marylanders.

"We have been squeezing for years," said Geni Dunnells, executive director of the Maryland Association of HMOs. "I think the HMOS are well positioned to continue their growth curve."

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