New Yorkers who take for granted that their hospitals are top-notch — or good, or even just so-so — should think again. The data suggest otherwise.

On a broad range of benchmarks, the state’s hospital system rates not just below average, but at or near the bottom. Beyond a few high-rated institutions, such as New York-Presbyterian and NYU Langone, the industry as a whole is hurting.

Take quality, for example. As of December, the average score of New York hospitals on the federal government’s Hospital Compare report card was 2.32 out of five stars. That was dead last among all states.

Of the 153 institutions rated, only one — Manhattan’s Hospital for Special Surgery — scored five stars.

More than half received one or two stars, the equivalent of C’s and D’s.

On key indicators of efficiency — average length of stay and readmissions within 30 days of discharge — the state’s hospitals collectively rank 45th and 48th, respectively. Financially, they’re 50th for debt load and 49th for operating margins.

The state’s not-for-profit hospitals, as a group, also rank 42nd for the level of free care they provide to the uninsured and underinsured — relegating a disproportionate share of indigent patients to city- and state-owned hospitals.

One area where New York is above average is cost: According to most recent federal data available, the state spent $3,633 per capita on hospital care in 2014, the 14th highest rate in the country.

What these numbers add up to is this: When New Yorkers go to the hospital — whether to deliver a baby, repair a broken hip, or seek emergency treatment after an accident — they’re paying more than most other Americans while typically receiving a lower standard of care.

That translates into thousands upon thousands of preventable infections, unnecessary complications, needlessly prolonged stays and avoidable deaths, not to mention billions of wasted dollars.

This concerning picture emerges from a new Empire Center study of New York’s hospital ownership laws. As written decades ago, these laws discourage all for-profit operators and effectively ban publicly traded corporate chains. The result is that New York is one of a handful of states, and by far the largest, without a single for-profit general hospital.

If this policy were working as intended, New York would be a haven for high-performing hospitals. Just the opposite is true.

Given such poor results, the ownership rules are ripe for rethinking. If a qualified for-profit company is ready to take over a struggling New York hospital, invest private money in fixing it up and pay taxes in the bargain, why should state law stand in the way?

It’s true that for-profit hospitals get lower quality grades, as a group, than not-for-profits. But their ranks include a mix of four- and five-star institutions along with the ones and twos. The state’s blanket policy against for-profits blindly shuts out the good as well as the bad.

A law that welcomed high-quality hospitals of all types would make more sense — and infuse New York’s health care system with fresh ideas and fresh capital.

That said, it will take far more than a change in ownership laws to give New Yorkers the high-performing hospitals they deserve. This is a large-scale problem that demands a large-scale response.

As a first step, policymakers must take the low ratings seriously — and not simply chalk them up to flawed methodology. Even if you adjust all of New York’s quality scores upward by 30%, the system as a whole would still rank below average.

Nor is the performance gap easily explained away with demographics. While New York has relatively high rates of some public health challenges, such as asthma and HIV, it also has relatively low rates of obesity and diabetes, generous health care funding and a low uninsured rate.

Next, policymakers must be willing to question — and to change — long-standing beliefs and practices.

Has the Health Department’s significant role in financing hospitals — as manager of the $63 billion Medicaid program — overshadowed its job of regulating them?

Is the state putting too much focus on prescribing health care “inputs” (such as wage rates), and not enough on tracking “outputs” (such as infection rates)?

Should the state continue pumping money into financially weak, low-quality hospitals to keep them open, or would the system ultimately be better off if they downsized or closed?

Does the outsized political clout of New York’s hospital lobbying groups and health-care labor unions ultimately benefit the public health or stand in the way of necessary reforms?

These and other pillars of state hospital policy helped create the unhealthy status quo. If New York’s ailing hospitals are going to recover, some if not all of those pillars might have to come down.

 

About the Author

Bill Hammond

As the Empire Center’s senior fellow for health policy, Bill Hammond tracks fast-moving developments in New York’s massive health care industry, with a focus on how decisions made in Albany and Washington affect the well-being of patients, providers, taxpayers and the state’s economy.

Read more by Bill Hammond

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The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.