Hospitals: Portrait of a failure

June 3, 2005

The closing of an inner-city hospital creates problems for doctors as well as patients.

The 95-year-old patient had multiple problems, including congestive heart failure, COPD, asthma, arthritis, and hardening of the arteries. In February, her CHF worsened and she had to be admitted. At one time, internist Joseph Salese of Orange, NJ, would have sent her to the nearby Hospital Center at Orange. But that hospital, located in a poor urban community next to Newark, had been closed for more than a year. So he had her taken to St. Barnabas Medical Center in Livingston, about 5 miles away.

St. Barnabas is a suburban hospital with an excellent reputation. But on this particular day during flu season, beset by extra patients from Orange, St. Barnabas had no room for Salese's patient. So the ambulance had to transport her to Chilton Memorial Hospital in Pompton Plains, some 20 miles distant. Fortunately, this time, the patient survived.

The closing of the 290-bed Hospital Center at Orange (HCO) in January 2004 is not unlike the fate of many "safety net" hospitals in urban centers throughout the country. And when these facilities close, it's not just the poor who rely on them who suffer. So do the physicians who serve the community.

Here's a close-up look at the impact of the closing of just one safety-net hospital.

Patients remain loyal to a declining facility The Hospital Center at Orange (also known as Orange Memorial Hospital) opened its doors in 1873. It was held in great esteem by the community. In fact, notes internist Alapatt F. Thomas of Irvington, "people in the area couldn't accept the idea that the hospital was going to close. I remember one of the last patients I sent to Orange Memorial-an accountant. He was having an MI, and that's where he wanted to go."

That was slightly risky at the time, acknowledges Thomas. Toward the end, he and other physicians were less willing to admit patients to HCO, "because they weren't going to get the care they needed." Doctors, nurses, and other support staff were switching to other hospitals as they saw the end approaching. The aging hospital also needed urgent repairs and a complete renovation. In 2002, the state health department had briefly shut down the OR suite, citing poor plant maintenance, infection control, and sanitation, "particularly of instruments."

Was the white knight really Darth Vader? In the early '90s, the state repealed a hospital rate-setting law. That repeal, plus the ravages of managed care, knocked many New Jersey hospitals against the ropes and kayoed some of them. In 1998, HCO was on the verge of bankruptcy when a white knight came to its rescue.

That white knight was the Cathedral Healthcare System, which owned three hospitals in Newark. Operated by the Catholic archdiocese of Newark, Cathedral agreed to provide back-office and management services to HCO for a fee. But, says Terence French, the system's executive vice president, Cathedral didn't buy out the facility or take on its liabilities. It was the HCO board, not Cathedral, that made the decision to shut down the hospital, he says.

But the hospital's last chief of staff, FP Yash Khanna, says that Cathedral did control HCO. A spokesperson for the NJ Department of Health and Senior Services agrees. Some physicians in the community think Cathedral, which also bought and then closed nearby Montclair Community Hospital in 1999, may have planned HCO's closing in advance to benefit its other hospitals.

"Cathedral takes these places, extracts the valuable services, and then closes them down to eliminate competition," says FP Edwin Lee McCampbell of East Orange. "We had a really good orthopedics department at Orange Memorial, and that was moved lock, stock, and barrel to St. Michael's Medical Center [another Cathedral hospital]." (Cathedral denies that it happened this way.)