Excess hospital capacity to persist But regulator says problem is manageable

November 22, 1995|By M. William Salganik | M. William Salganik,SUN STAFF

State health planners yesterday projected that Maryland's hospitals, despite recent downsizings to deal with declining occupancy rates, will still have excess capacity of 29 percent to 45 percent by the year 2000.

While the problem of excess beds requires attention from regulators, it can be managed, said James R. Stanton, executive director of the Heath Resources Planning Commission, who presented the projections yesterday to the Senate Finance Health Subcommittee. He added, "I encourage you not to focus on the numbers."

The planning commission's projections show that of Maryland's 12,249 licensed hospital beds, from 3,500 to 5,500 will be unnecessary by the end of the century, depending on various factors such as the growth of managed care.

"As a regulator, I'm telling you we have a fire," said Mr. Stanton. "But the fire trucks are on the way, and I think we have the apparatus to handle it."

The subcommittee's chairman, Sen. Larry Young, a Baltimore Democrat, showed some impatience, noting that similar projections of excess hospital capacity had been made 10 years ago. It is more important than ever, he said, to control the cost of excess beds to reduce the impact of possible federal cuts in Medicare and Medicaid.

Mr. Young said he plans to conduct another hearing in January to consider a strategy for attacking the problem.

But Mr. Stanton and other witnesses told the subcommittee that the projections may make the problem look worse than it is.

For one thing, Mr. Stanton said, to some extent the excess is a mark of the success of cost containment. More people are being treated as outpatients rather than being admitted to hospitals, and the average hospital stay has been cut sharply -- from 7.68 days in 1980 to 4.81 days in 1994.

Calvin Pierson, president of the Maryland Hospital Association, presented a survey of his members showing that 22 percent of licensed hospital beds are not currently staffed and operating. For example, hospitals may put only one in a room approved for two beds.

"A large proportion of licensed beds are actually 'paper beds,' and paper beds don't cost anybody anything," agreed Robert Murray, executive director of the Health Services Cost Review Commission. Mr. Murray's commission sets hospital rates in Maryland, while Mr. Stanton's approves hospital construction and expansion.

However, Mr. Murray said, empty beds can create incentives for hospitals and doctors to order unnecessary hospitalizations, making the occupancy rates look better but actually increasing

costs. He said studies show a staffed-but-unoccupied bed costs the system about $36,000 a year, but a needlessly filled bed costs about 10 times that -- $365,000 a year at $1,000 a day.

Mr. Pierson said 2,500 hospital beds have been eliminated in Maryland over the last decade, through the closing of five hospitals and cutbacks at other facilities.

The wave of hospital mergers and affiliations is likely to produce further reductions, he said, without the "difficult and emotional community issues" that can result from "efforts by states to target and close specific hospitals."

Fred D. Mason, executive vice president of District 1199-E of the Service Employees International Union, which represents health care workers, asked the subcommittee to consider issues of access as well as cost.

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