April 2002

Grant Results

SUMMARY

From 1997 to 1999, researchers at Columbia University's Eisenhower Center for the Conservation of Human Resources, studied the effects of changing health marketplace dynamics on New York City's academic health centers, i.e., teaching hospitals affiliated with medical schools.

Key Findings

  • Per capita and total health care expenditures in New York City have become substantially higher than elsewhere in the country.
  • The city's academic health centers have not realized the expenditure controls and reductions they had hoped to achieve through mergers and system building.
  • Academic health centers are on the cutting edge of medicine, with costly new technologies.
  • Congress is unlikely to continue to support indefinitely the training of more than 12,000 residents in New York City, thereby threatening an important source of future income for academic health centers.
  • Because 28 percent of New York City's population under age 65 is uninsured (compared with a national average of 20 percent), cutbacks in funding to hospitals, resulting from the federal Balanced Budget Act of 1997, placed a disproportionate burden on the academic health centers.
  • City hospitals are heavily indebted, collectively owing as much as $9 billion, primarily for capital expenditures, expansion and equipment.

Funding
The Robert Wood Johnson Foundation (RWJF) supported this project through a grant of $286,237.

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THE PROBLEM

In New York City, academic health centers have played an important role in delivering care to low-income people enrolled in Medicaid as well as charity care, including emergency and clinic services to uninsured individuals.

Additionally, academic health centers provide medical staff for most of the city's public hospitals. However, a number of significant public policies and market trends have destabilized the academic health centers' long-term leadership role in caring for the poor.

The city's five dominant academic health centers at the time of the grant — Columbia, Mt. Sinai, Cornell, New York University and Einstein-Montefiore — responded to the financial strain of managed care and governmental cost control, among other problems, by forming mergers and alliances with one another and bringing smaller hospitals into their systems.

The federal Balanced Budget Act of 1997 compounded the academic health centers' fiscal problems by mandating large spending reductions for Medicare and Medicaid. By 1999, only Sloan-Kettering Memorial Hospital continued to operate without a merger or an alliance without another academic health centers.

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THE PROJECT

In researching the project, the center participated in numerous citywide conferences on health policy, and held private meetings with the senior officials of most of the academic health centers that were involved in the major restructuring in the New York City region.

Eli Ginzberg, Ph.D., of Columbia University's Eisenhower Center for the Conservation of Human Resources, led the project.

Communications

  • In 2002, project staff published a book summarizing the research findings entitled, The Health Marketplace: New York City 1990–2010. Organizing themes for the book are financing, institutional realignments, the New York City work force, and managed care.
  • A forecast of likely developments up to 2010 is covered in another book, The Health Marketplace: New York City, 1990–2010.
  • A third book, Teaching Hospitals and the Urban Poor, also has been issued, as well as three book chapters.
  • Dr. Ginzberg published 14 articles in journals, including two in the New England Journal of Medicine, and four in the Journal of the American Medical Association. (See the Bibliography for details.)

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FINDINGS

  • Per capita and total health care expenditures in New York City have become substantially higher than elsewhere in the country.

    Annual New York City health care expenditures rose to $53 billion in 1999, more than $6,620 per person, compared with $4,000 per person in the country as a whole, based on the 2000 census population of 8 million in New York City.
  • The academic health centers have not realized the expenditure controls and reductions they had hoped to achieve through mergers and system building.
  • Academic health centers are on the cutting edge of medicine, with costly new technologies; additionally, diagnostic tests that might otherwise not be performed often are done in New York City's academic health centers as part of the education and training of residents.
  • Congress is unlikely to continue to support indefinitely the training of more than 12,000 residents in New York City, thereby threatening an important source of future income for academic health centers.

    Many members of Congress feel such levels of support are not justified because of the size of the New York City population, and the fact that just over half of the medical residents are from foreign countries.

    At the time of the research, the federal government, plus New York state, paid academic health centers about $170,000 per year per resident through supplements to what Medicare pays for patients.

    Federal sources (plus the allocation from the state's Medicaid funds) supply 75 to 80 percent of the revenues of the city's hospitals. Federal cutbacks would result in a substantial loss of revenue for academic health centers.
  • Cutbacks in funding to hospitals, resulting from the federal Balanced Budget Act of 1997, placed a disproportionate burden on the academic health centers because 28 percent of New York City's population under age 65 is uninsured, compared with a national average of 20 percent.

    Hospitals had been using some of the federal money they received before the act to subsidize treatment for the uninsured. Loss of these funds is still contributing to the uncertainty of academic health centers' financial futures.
  • City hospitals are heavily indebted, collectively owing as much as $9 billion, primarily for capital expenditures, expansion and equipment.

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GRANT DETAILS & CONTACT INFORMATION

Project

Academic Health Centers and Health Care for New York City's Poor

Grantee

Columbia University (New York,  NY)

  • Amount: $ 286,237
    Dates: January 1997 to June 1999
    ID#:  029087

Contact

Eli Ginzberg, Ph.D.
(212) 280-2132
eg18@columbia.edu

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BIBLIOGRAPHY

(Current as of date of this report; as provided by grantee organization; not verified by RWJF; items not available from RWJF.)

Books and Reports

Ginzberg E, Ostow M, and Berliner H. Improving Health Care of the Poor: The New York City Experience. New Brunswick, N.J.: Transaction Publishers, 1997.

Ginzberg E and staff. Leading Hospitals Their Urban Poor Neighbors. New Haven, Conn.: Yale University Press, 2000.

Book Chapters

Ginzberg E. "Speculations on the Continued Growth of Managed Care." In Integrating the Practice of Medicine: A Decision Maker's Guide to Organizing and Managing Physician Services. Ronald B. Conners (ed.). Chicago: American Hospital Publishing, Inc., 1997.

Ginzberg E. "Public Service Employment: A Look Back and a Look Ahead." In Back to Shared Prosperity: The Growing Inequality of Wealth and Income in America. Ray Marshall (ed.). New York: M. E. Sharpe, Inc., 2000.

Articles

Ginzberg E. "Managed Care — A Look Back and a Look Ahead." Sounding Board, New England Journal of Medicine, 336(14): 1018–1020, 1997.

Ginzberg E. "Managed Care and the Competitive Market in Health Care: What They Can and Cannot Do." Journal of the American Medical Association, 277(22): 1812–1813, 1997.

Ginzberg E. "Health Care Policy: What's Happening Out There?" Medical Practice Management, (July/August): 11–12, 1997.

Ginzberg E. "Medical Education and the Needs of the Public." Academic Medicine, 72(8): 663–665, 1997.

Ginzberg E. "The Changing U.S. Health Care Agenda." Journal of the American Medical Association, 279(7): 501–504, 1998.

Ginzberg E. "The Noncompetitive Health-Care Market." Challenge, The Magazine of Economic Affairs, 41(July/August): 31–41, 1998.

Ginzberg E. "U.S. Health System Reform in the Early 21st Century." Journal of the American Medical Association, 280(17): 1539, 1998.

Ginzberg E. "The Uncertain Future of Managed Care." New England Journal of Medicine, 340(2): 144–146, 1999.

Ginzberg E. "Health Policy Agenda for the Early 21st Century." Journal of Urban Health, Bulletin of the New York Academy of Medicine, 76(1): 18–32, 1999.

Ginzberg E. "Challenges to U.S. Health Care Policy in Early 21st Century." Perspectives in Biology and Medicine, 42(Spring): 387–397, 1999.

Ginzberg E. "Ten Encounters With the U. S. Health Sector, 1930–1999." Journal of the American Medical Association, 282(17): 1665–1668, 1999.

Ginzberg E. "U.S. Health Care: A Look Ahead to 2025." Annual Review of Public Health, 20: 55–66, 1999.

Ginzberg E and Minogiannis P. "What Americans Need to Know About the Funding of Our Health Care System." The Long Term View, 4(4): 65–67, 1999.

Ginzberg E and Ostow M. "The U.S. Pluralistic Health Care Sector." Bulletin of the New York Academy of Medicine — A Journal of Urban Health, 74(2): 156–172, 1997.

Presentations and Testimony

Eli Ginzberg, "The Financial Storm Clouds Gather: The Future of the NYC Health Marketplace," at the New York Academy of Sciences, May 1999, New York, N.Y.

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Report prepared by: Janet Spencer King
Reviewed by: Susan G. Parker
Reviewed by: Janet Heroux
Program Officer: James R. Knickman