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Zack Hutchins
Director of Communications

February 16, 2006

Blue-ribbon commission's report documents trends in population, health care that show need to shrink capacity in health-care sector

New York State is struggling to sustain a oversized network of health-care institutions that is too big, costly, and inflexible for society that is likely to lose population and continue to see changes in its health-care preferences and needs, according to a new report from a blue-ribbon commission exploring ways to right-size New York’s hospital and nursing home sector.

“In the past two decades, much has changed in healthcare, especially in the areas of financing, clinical care, information technology, and delivery mechanisms,” according to Planning for the Future: Capacity Needs in a Changing Health Care System, which was published this week at www.nyhealthcarecommission.org by the Commission on Health Care Facilities in the 21st Century.

“Yet today, New York is struggling to maintain a 20th century institutional structure in the face of mounting costs, excess capacity, and unmet need for community based alternatives,” the report continues. “The existing institutional infrastructure is neither affordable nor flexible. The fiscal instability facing New York’s health care providers threatens the availability of important safety-net and public-good functions.”

The “Berger Commission” is chaired by Stephen Berger, a former state commissioner of social services in the mid-1970s and later a key player in engineering New York City's fiscal turnaround. Governor Pataki created the commission in 2004 to recommend ways to shrink New York’s hospital and nursing home sector. The commission is expected to recommend the closing of specific institutions around the state.

The paper explores in detail “megatrends” in demographics, clinical innovation and changes in healthcare organization that it says will continue to affect New York’s need for hospital beds and health-care services.

“The overall direction of these megatrends supports the need to restructure and right-size the delivery system. The dominant direction of change affirms the need for a health care system that is more flexible and less costly than one that is heavily based on physical infrastructure requiring massive capital investment.”

Population: The paper projects that New York State’s population will continue to grow much more slowly than the nation. In the 1990s, New York’s population grew 5.5 percent, less than half the nation’s growth rate of 13.2 percent. Many Upstate counties and cities lost population during that time, and foreign immigration to the New York City region “transformed what would have been a statewide population decline of more than a half million to an increase of nearly one million,” the paper says.

Projected trends, the paper said, are expected to reflect this recent history, with population growing only “modestly and unevenly,” the paper says.

“The state’s population is projected to grow marginally from 18.9 million in 2000 to 19.4 million in 2030; a growth of only 2.6 percent over 30 years,” the paper says. “New York’s projected growth rate is the 46th lowest among the 50 states and the District of Columbia. Because of this, the state’s population is expected to drop from third-largest in the country in 1995 to fourth-largest by 2015.”

Clinical advances: Clinical advances and other factors have contributed to a “migration of care out of the hospital and into less intensive settings. A significant share of services has already made this transition, and the trend is continuing,” the paper says.

Factors driving this transition include: advances in minimally invasive approaches to diagnosis and treatment; advances of medical and pharmaceutical interventions that replace surgery; new inpatient surgical procedures that are increasingly done in non-hospital ambulatory surgery centers; the proliferation of new medical devices; new imaging technologies; and genomic and biotechnology-based therapies.

“The major directional change produced by innovation over the past two decades has been the movement of care to less intensive, outpatient settings,” the study says. “While some new discoveries will create inpatient demand, nothing on the horizon today suggests that this overall direction will be reversed.”

Changes in health-care organization: The paper notes that the population of elderly New Yorkers is growing healthier and showing a strong preference for home- and community-based alternatives to institutional care.

“Improved health status and a rise in ‘consumerism’ mean that the healthcare needs of an increasingly older population will not automatically translate to a need for more beds,” the paper says. “Patients are now more engaged in medical decision-making, participate as active partners in their care, value living independently, and shun institutional care arrangements.”

“An aging population will require health services, but not necessarily more bed capacity.”

The paper concludes: “The overall direction of these trends and New York State’s current over-capacity support prudent reconfiguration and right-sizing of its health care delivery system. New York State needs a health care system that is more flexible and less costly than one heavily based on institutional infrastructure requiring massive capital investment. New York State’s goal should be a reinvestment strategy ensuring all patients access to health care services, not necessarily to buildings. Given the difficulties inherent in forecasting the future, flexibility is required to deal with New York’s changing healthcare landscape.”