The New Reality

As the nation lurches into a retooling of its health-care system, the people who work at community hospitals are worried. Bob Blabey and other Stamford Hospital physicians are skeptical of Clinton's plan: They support universal access, but they believe quality of care may decline sharply. Sue Worland worries about that, too, though she says it will happen "over my dead body." Administrators wonder whether the mechanisms created by states to manage the new enterprise will resemble the hulking Medicare bureaucracy more than a streamlined, efficient delivery system.

With or without political reform, hospitals are losing their traditional power to determine how patients will receive care. Instead, as insurers and employers form alliances and capped payment systems force care providers to accept flat annual per-patient fees, hospitals will increasingly find themselves at the bottom of the industry food chain.

But not if they act fast. That's why Stamford, like many institutions, is rushing to find partners. It will soon join a network formed by New York Hospital, a large teaching institution, and it's talking to medical centers in New Haven and Hartford as well as other community hospitals nearby.

The alliances could be the start of a true restructuring. Cusano, who rails against the traditional compartmentalization of medicine, envisions a comprehensive regional "health service resource" in which an acute inpatient-care facility is linked with a variety of alternative health services. It will look a lot like the rural network created by the Berlin Memorial Hospital in central Wisconsin, which connects women's health clinics in three separate towns with anesthesiology and internal-medicine centers, an extended-care facility, and a nursing home. The elements will be tightly linked, producing a more efficient and consistent level of care. Information systems will be integrated so a patient's record can be transferred easily from a physician's office to a hospital nurse's station to an insurer's claims unit.

Or there may be no insurers at all. Stamford has formed a network with 244 of its affiliated doctors. It markets the combination to managed-care plans and is approaching large, self-insured employers directly for business. Cusano hopes to see Stamford bypass insurers, negotiating fees directly with employers for the total care of their workers.

Can it happen? Stamford, like community hospitals everywhere, must first overcome its own culture, which is rooted in a century of independence and local preeminence, accustomed to size and growth as the primary measures of accomplishment. It must take on more of the financial risk that is now borne by insurance companies and employers. Physicians such as Blabey will likely have to come to terms with even less control. And patients will have to live with compromises.

Just how many compromises is what troubles Cusano. Will people wait months for elective surgery? Will incentives remain to drive technological advances? Will the best doctors keep practicing if their pay drops? "Will people get the right care?" he worries. "I honestly don't know."


How community hospitals across the U.S. are changing


Medina, Ohio

In a $20 million renovation, Medina cut inpatient capacity to 118 beds from 150 and redesigned the ground floor to speed the flow of day patients, who now account for most of the business.


Lakeland, Fla.

With "patient focus" systems, teams of cross-trained staffers provide care to a few patients apiece. Patients used to come into contact with 53 workers during a typical stay; now, they see 13. Lakeland's employment should drop by 15%, part of $20 million in annual savings.


Northampton, Mass.

In need of a larger partner, it joined a network formed by Mary Hitchcock Memorial Hospital in Lebanon, N.H. Cooley gets Mary Hitchcock's oncologists, neurosurgeons, and other specialists, as well as the financial backing to issue more bonds.