An Elegant Form of Red-Lining

September 15, 1994|By PETER A. JAY

Havre de Grace -- The people have told the pollsters, and the pollsters have told the Congress, that greater involvement by our dysfunctional federal government in our imperfect but functioning health-care system is not immediately desirable, thank you very much.

Even the Clintons seem to be getting the word at last, and Operation Power Grab is back on the shelf for a while. Big business, Washington lawyers and public-sector employees are distressed about that for various reasons related to their pocketbooks, but just about everyone else is relieved.

The relief is certainly palpable out here in our part of the backwoods, where we're enduring a dramatic ongoing lesson in government ''management'' of health care. The government in our case is the state of Maryland's, not Bill Clinton's, but many of the same principles apply.

Over the last 20 years, Maryland's regulation of health care has been nationally noted and widely praised. Its regulators are for the most part people of intelligence and conscience. But Harford County residents can be forgiven if they're a little cynical about what that regulation has accomplished.

They've seen first-hand how the regulatory system protects the profits of unpopular and noncompetitive institutions, reduces the medical options available to consumers, and blatantly steers medical services toward politically favored communities. And to whom can they turn for help? Only to the regulators.

Harford County has two hospitals, the 84-year-old 275-bed Harford Memorial in Havre de Grace and the newer 219-bed Fallston General. They were merged almost eight years ago under the officially not-for-profit Upper Chesapeake Health System, Inc.

Upper Chesapeake has been successful by an accountant's standards, but not in terms of community support. Care at both hospitals has been bitterly criticized, and many patients, especially from the fast-growing Bel Air area, have chosen to use Franklin Square and other hospitals closer to Baltimore. This, along with state-dictated policies intended to reduce overnight hospital stays wherever possible, has meant many empty beds at the two Harford hospitals.

Upper Chesapeake is now proposing to address these concerns not by improving care but by spending its accumulated non-profit dollars to build a new hospital near Interstate 95 in Abingdon. It would also close Fallston General and cut Harford Memorial to 100 beds (25 reserved for psychiatric patients). Harford Memorial could not remain a viable hospital at that size, doctors here think, and many suspect it would eventually be converted into a nursing home.

Normally a so-called ''certificate of need'' would be required from the state for such far-reaching changes, and the granting of such an approval requires public hearings.

Upper Chesapeake has asked to be exempted from the requirement -- perhaps not surprisingly, as more than 6,000 people in the Havre de Grace area have signed petitions opposing the proposed changes and demanding hearings.

The state, to its credit, is hanging tough. The Maryland Health Resources Planning Commission has so far declined to roll over dead and grant the requested exemption, though no final decision has yet been reached.

But although the state is clearly trying to do the right thing, if it weren't for the regulatory structure, which gives Upper Chesapeake a monopoly in the provision of health services in Harford County, the situation wouldn't be such a disaster.

What would happen if Harford Memorial Hospital were an unregulated business -- let's say a newspaper -- and the owners weren't making any money? They'd just leave, and almost certainly someone else would take over. That's the way a free market works, and it could work in health care. The doctors and other local people in Havre de Grace would be glad to take over and run their local hospital, just as they did years ago, but state regulations wouldn't permit it now.

Louis Silverstein, an outspoken family practitioner in Havre de Grace (and my doctor), described the situation bluntly and accurately in a letter to the state health planners. ''The empty beds in Harford County are . . . a result of UCHS' gaming of the [regulatory] system, its incompetence in meeting competition [from out-of-county hospitals] and its overall poor reputation in the community,'' he wrote.

Dr. Silverstein, noting that Upper Chesapeake wants to reduce health service in Havre de Grace, a poorer area with a substantial minority population, and expand it in the already over-served Baltimore region, called the proposal ''an elegant form of red-lining.'' He's right. It is.

But Upper Chesapeake is a creature created by regulation, and adapted to live only in a hothouse regulatory atmosphere. More regulation might make it behave better for a while, but it won't change it significantly. True competition might, but even without ClintonCare, modern health care in Maryland's a long way from that.

Peter A. Jay is a writer and farmer.

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