Public Hospitals

Some historical background

County hospitals, long maligned for their endless waiting lines, dirty and crowded wards, and rushed and impersonal treatment, are on the way out [written in 1974]. And 20 million "medically indigent" Americans, those who fall in the crack between Medicaid and health insurance, have no place to go. These people—the seasonal farmworkers, the black maid who earns $60 a week, the small owner whose business is failing, the warehouse loader out of work six months a year, the single alcoholic ineligible for welfare — are all dependent on public hospitals.

In California alone, 12 out of 50 county hospitals have recently closed or been sold; 10 or more are likely to disappear within a year. Chicago's Cook County Hospital came within a hairsbreadth in 1970 and '71. New York City has initiated plans to close or lease up to 7 of its 18 municipal hospitals. In Florida, Massachusetts, North Carolina and Wisconsin, public hospitals, formerly open to everyone regardless of ability to pay, have gone private.

Last year, Boston's Mayor Kevin White massively cut the budget at Boston City Hospital and eliminated hundreds of jobs. Facing community protests, the Mayor's response was, "Some of you people may have to die."

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From the very beginning, America's health care system was based on economic class. The rich and the middle class were attended at home by private physicians, and the destitute were left to the public poorhouses, used much like jails to separate the undesirable and the contagious from society. The poorhouses' descendants were the country's first hospitals — dirty, overcrowded, badly ventilated. Well-to-do patients never used them. In fact, since medicine had little to offer the sick, they were not a place for treatment at all, but a place to die.

The discovery of antisepsis and sterile procedure in the 1840s changed this. At the same time, the development of anesthesia gave hospitals something positive to do: surgery. With these technical advances, hospitals became places the rich wanted to go to, and so when large numbers of new hospitals were built around the turn of the century, most of them were private.

When the Great Depression of the Thirties threw private hospitals into financial crisis, Blue Cross and commercial health insurance bailed them out. But the poor couldn't afford insurance, so the public hospitals that cared for them still depended on local property taxes. Everybody knows property taxes are regressive, unpopular, and don't tap the country's real concentrations of wealth. They simply never expanded fast enough to keep up with public needs, and since the Thirties, public hospitals have been in a money pinch from which they've never emerged.

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The 1965 Medicaid Law … was supposed to provide state and Federal money for the health care of the poor, thus relieving the burden of hard-pressed cities and counties. But for … counties, it wasn't that simple. First, the counties had to pay a big hunk of the [Medicaid] budget through yearly lump-sum payments to the state. Second, [Medicaid] encouraged patients to gravitate toward private care. This left county hospitals with the poor and unemployed who were ineligible for [Medicaid].

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When [the] Medi-Cal Reform Act forced counties to foot a bigger bill for their hospitals, the counties found some surprises. Not only had budgets soared, but many hospitals were half-empty. Kern General had a 1971 occupancy rate of 61 percent, Merced General 51 percent, Santa Clara 59 percent, Santa Rosa 42 percent, Fresno 42 percent, Yolo 32 percent. Kings 24 percent.

What on earth was happening? The main thing, it turns out, is that patients are staying in the hospital less time. Some hospitals have sent their chronic patients back home or to nursing homes. Medicare and Medicaid are pressuring hospitals to get patients out, since these programs have to pay the bills. The average length of stay has dropped dramatically in some county hospitals; San Francisco's fell from 13.2 to 7.1 days in nine years.

The same thing is happening to private hospitals. On May 10, 1971, the San Francisco Chronicle's front page proclaimed an "Empty-Bed Crisis for SF Hospitals." The article could have been written in Boston, Los Angeles, Minneapolis, Seattle or Denver. Everywhere the length of stay is dropping, as is the number of people admitted.

But there is another curious factor behind the crisis in private hospitals; there are too many of them. There was a great wave of private hospital building in the 1960s, far more than the country needed. According to the Wall Street Journal (November 2, 1971), "The number of beds in general-care hospitals has grown about three times faster than the nation's population," shooting up 33 percent from 1960 to 1971, Even the former executive director of the American Hospital Association, the private hospitals' own lobbying group, said "There are too many hospital beds in this country, although the Assocation would never want me to say so publicly."

Private hospitals have always exploited their public counterparts. In the past, when they have had plenty of patients, they have taken the ones who could pay, and sent non-paying and "undesirable" patients to public hospitals. This patient dumping has reached enormous proportions; in Chicago, 18,000 emergency patients were refused admission to private hospitals in 1970. The more fortunate ended up at Cook County Hospital; the unlucky — at least 50 people — died in the course of transfer.

With the empty beds now in private hospitals, however, the relationship may be reversed. Rather than using public hospitals to dump non-paying patients, private hospitals are looking to them as a source of money. There is tension between a private hospital's wish for more paying patients and its desire to pick and choose which patients are cared for. In California, some private hospitals are getting out of this dilemma by pressuring county governments to close most or all of their hospitals and to contract with the privates instead for the care of the poor. But the poor are still going to lose.

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Six ways to kill county hospitals [each explored in depth in the article]:

  1. Closing down
  2. Contracting out
  3. Medical school transfers
  4. Private takeovers
  5. Hospital corporations
  6. Tighter billing

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As long as a small, underfinanced public system coexists with a large, wealthy, private one, there will be competition for paying patients, doctors, money and power. And the private system will win. Thus the struggle to preserve the public system is more than the preservation of a rundown, half-empty, understaffed city or county hospital. It means fighting to divert resources from private to public control. It means attacking private hospitals when they take public money but leave behind the public responsibility to care for everyone. Eventually it means forcing the new, well-staffed local private hospital to become public.

excerpted from "Hospitals for Sale (and other ways to kill a public health system)" by Elinor Blake and Thomas Bodenheimer in Ramparts Magazine, February 1974, pp. 27-33. http://www.unz.org/Pub/Ramparts-1974feb-00027

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