Hospital Losses Hit City Heart: Eroding Access Raises Concern About Health Care of Poor
By Rick Romell, Milwaukee Journal Sentinel
May 15–The impending closing of St. Michael Hospital is just one more step in a decades-long erosion of hospital capacity in and near Milwaukee’s central city.
Since the late 1970s, eight other hospitals with a total of more than 1,000 beds in the heart of the city have shut their doors.
That series of closings, driven by changing demographics and a more-competitive market for health care, alleviated what at the time was a problem: too many beds.
In one small area just west of downtown, five hospitals — six if you count the former campus of what then was called Milwaukee Children’s — stood within 12 blocks of each other. All but one, money-losing Aurora Sinai Medical Center, are gone.
A rising tide of poverty in Milwaukee helped propel the trend, as hospitals near low-income neighborhoods found themselves seeing more and more patients who lacked insurance or who were covered by only government programs, such as Medicaid, that pay nowhere near the full costs of treatment.
As those hospitals have closed, it has raised questions about access to health care for the poor — the same people whose circumstances undercut the hospitals’ financial viability in the first place.
“I am terribly concerned from a business point of view and (as) a citizen of the community,” said Jim Mueller, president of insurance brokerage and consulting firm Frank F. Haack & Associates and a long-time observer of the local health care scene.
“We do have a serious problem,” said William Petasnick, president and CEO of the parent organization to Froedtert Memorial Lutheran Hospital — the teaching hospital for the Medical College of Wisconsin — and Community Memorial Hospital in Menomonee Falls.
New alliances
At the same time, though, alliances between hospital systems and government-supported clinics promise to expand the amount of primary care available in the central city and perhaps reduce dependence of the uninsured and underinsured on expensive, and often unnecessary, emergency-room service.
Current clinic expansions, spurred in part by financial help from hospital groups, could add up to 25 physicians in doctor-short central Milwaukee, said Paul Nannis, vice president of government and community relations at Aurora Health Care, which is underwriting some of the costs.
The efforts represent the largest expansion of primary health care in the central city in 25 years, he said.
“While it doesn’t make up for the loss in this community of another hospital like St. Mike’s, it does provide on the front end significant access for preventive and primary care, which is very, very important,” Nannis said.
For the hospital systems providing money and other help, “some of this is altruistic, and some of this is just practical and realistic,” he said. “We can’t afford to see 300,000 emergency department visits a year at a cost of $800 to $900 a visit for folks who really need to be seen in doctors’ offices.”
The long, slow wave of hospital closings in Milwaukee began developing about 30 years ago when 100-bed Misericordia Community Hospital on the near west side, burdened by debt and a daily patient count that dropped to as low as nine, shut its doors in 1977.
About a year later, city-owned Johnston Municipal Hospital, which had functioned as an emergency room for its south side neighborhood, was turned into a community health center.
Deaconess Hospital and Lutheran Hospital, both just west of downtown, merged in 1980 to form Good Samaritan Medical Center. A Milwaukee Journal editorial at the time applauded the move, saying such combinations were crucial to eliminating the excess hospital beds and duplicated medical services that were “major causes of today’s obscenely high health care costs.”
Since then, data from the U.S. Bureau of Labor Statistics show, the cost of medical care in greater Milwaukee has quadrupled, far outstripping the overall rate of inflation.
Good Samaritan closed the Deaconess campus in 1985. Two years later, two other struggling hospitals, Family and St. Anthony’s, united. The effort failed. In 1988, the merged hospital shut its doors. The facility’s president blamed the same problem St. Michael executives cited last week: a patient population relying heavily on government insurance that doesn’t cover medical costs.
First Hospital-Milwaukee, a small, for-profit general hospital that for its last three years treated psychiatric patients, closed in 1991. Good Samaritan, by then part of Aurora, closed in 1998. Northwest General, which largely served some of Milwaukee’s poorest neighborhoods, closed in 2000.
Most significant, perhaps, was the closing in 1995 of county-owned John L. Doyne Hospital. For years, it essentially had been the default hospital for the indigent. With Doyne gone, those patients, supported by payments from a county assistance program, were spread among other area hospitals.
Doyne served 20,000 people a year through its primary and specialty care centers, said Patricia McManus, executive director of the Black Health Coalition of Wisconsin, an advocacy group.
“We still haven’t recovered from that,” she said of the hospital’s closing.
As various hospitals shut their doors, meanwhile, the city was growing poorer.
In 1979, according to the U.S. Census Bureau, a little less than 14% of Milwaukee residents lived below the poverty line. By 2004, that number had climbed to 26%. The median income of a city household, over the 25 years, lost a fourth of its buying power.
The growing poverty, in turn, shaped the changing health care landscape, Nannis said.
“I think, in part, all of that was because of the disproportionate burden of uncompensated care concentrated in the central city,” he said.
The closures also came as the state moved from regulation of hospital rates and construction to more-open competition, and as the federal government, which had reimbursed hospitals for the cost of treating Medicare patients, switched to fixed payments based on the particular treatment.
Meanwhile, population — and income — continued to shift to the suburbs, and hospitals joined to form health care systems with the hope of becoming more efficient and increasing bargaining power with insurers.
The latter trends have contributed to record profits for some. Froedtert & Community Health, ProHealth Care, Columbia St. Mary’s and Children’s Hospital and Health System, for instance, all boast healthy profit margins and balance sheets.
The profits also have driven the biggest building boom in hospital construction in 50 years, much of it in affluent suburbs, where people are more likely to have insurance through their employers or Medicare.
St. Michael’s owner, Wheaton Franciscan Healthcare, has joined in the trend. The non-profit organization, which is closing St. Michael’s emergency room and inpatient services after $74 million in losses there over the last four fiscal years and a projected loss of $26 million more in 2006, has opened an outpatient center in Wauwatosa and taken an ownership stake in Wisconsin Heart Hospital, also in Wauwatosa. Wheaton Franciscan plans to spend $80 million to build an outpatient center in Franklin.
Ensuring a safety net
Nationwide, economic disparities in health care are growing as hospitals and doctors increasingly focus their investments on affluent suburbs, according to a recent study by the Center for Studying Health System Change, a policy research organization in Washington, D.C. The study appeared in the journal Health Affairs.
“There are signs across the health care system that the safety net is being stretched,” organization spokeswoman Alwyn Cassil said. “In a nutshell, what we found was more and more pronounced tiering of the health care system.”
Wheaton Franciscan Healthcare remains committed to serving the poor, President and CEO John Oliverio said.
The organization is expanding emergency services at its flagship hospital, St. Joseph Regional Medical Center, which Oliverio expects will absorb more than half of the 40,000 emergency room visits a year to St. Michael. St. Joseph is at N. 50th and W. Burleigh streets.
“Our strategy is relocation and consolidation of services, so that way we can more cost-effectively serve the poor in communities that we directly relate to,” Oliverio said.
A family care center that will continue at St. Michael sees 24,000 people a year, and Wheaton is financially supporting Milwaukee Health Services, one of the government-supported clinics expanding operations.
Those expansions are part of what Milwaukee Health Commissioner Bevan Baker sees as a “rewiring” of health care in the city. The challenge, he said, is to increase the number of primary care doctors and to shift use to them.
Besides easing pressure on hospital emergency rooms, that would benefit patients, Nannis said. He said that where emergency room care is episodic — “You’re in, you’re out. It’s not connected to anything else in your life” — primary care offers continuity and knowledge of things such as a patient’s family history and prescription drug use.
Some 60% of emergency-room visits at Aurora Sinai are not emergencies, Nannis estimated. Wheaton Franciscan estimated in December that 78% to 83% of patients at St. Michael’s and St. Joseph’s emergency departments could be treated by primary care physicians.
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Copyright (c) 2006, Milwaukee Journal Sentinel
Distributed by Knight Ridder/Tribune Business News.
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