Health Care

Democrats Say Health Bill Will Pay for Itself in the Long Run

By ROBERT PEAR and DAVID M. HERSZENHORN

WASHINGTON — House Democrats initiated a 72-hour countdown Thursday on their yearlong effort to overhaul the health care system, unveiling a nearly final version of the legislation that promptly won additional support with a promise that the bill would more than pay for itself over the next decade.

Armed with detailed legislative language and a report on the bill’s costs from the Congressional Budget Office, Democratic leaders and White House officials kicked off a new round of arm-twisting to line up the votes they will need to pass the legislation when it comes to the House floor in the face of intense Republican opposition on Sunday.

House Democratic leaders were still struggling Thursday to lock in the 216 votes they need to pass the bill. They are believed to be at least a half-dozen votes short, but say they are confident they can secure the needed votes.

With the fate of his top domestic priority still up in the air, President Obama postponed a foreign trip that he had been scheduled to start Sunday to be on hand for the final House vote and a subsequent round of voting that would begin in the Senate next week to complete work on the bill.

The legislation’s chances seemed to be improved by the budget office report, which estimated that it would reduce projected federal budget deficits by $138 billion over the next decade, with additional tax revenue and Medicare savings. Many of the House Democrats who have continued to waver over the bill had been concerned about its long-term costs. The bill would provide insurance coverage to most of the uninsured, put new restrictions on insurers and seek to lower rising health care costs.

The version of the bill unveiled on Thursday is based on the bill passed by the Senate in December, but it incorporates a package of changes that would address concerns raised by House Democrats. Under the timetable outlined by Democratic leaders, the House on Sunday would pass the Senate bill and then immediately approve a package of changes. If signed by Mr. Obama, the first bill would become the law of the land, but the second one would go to the Senate, where it could be approved by a simple majority, using a procedure intended to avoid the threat of Republican filibuster.

Representative Bart Gordon, Democrat of Tennessee, cited the deficit-reduction figure in announcing Thursday that he would switch his vote and support the new bill. Mr. Gordon, a member of the fiscally conservative Blue Dog Coalition, voted against the House bill in November.

Another Blue Dog Democrat who voted no in November, Representative Betsy Markey of Colorado, said she too would support the new measure.

But a few House Democrats, including Representatives Michael Arcuri of New York and Stephen F. Lynch of Massachusetts, said they were moving in the opposite direction.

Mr. Arcuri, who supported the bill in November, said he would vote against the new package because it did not do enough to lower insurance costs.

Mr. Lynch issued a statement saying he was opposed to the Senate bill — and to a plan being considered by Democratic leaders to pass it without explicitly voting for it. The House should take “a straightforward up-or-down vote on a bill of this magnitude,” he said.

The No. 3 Democrat in the House, Representative James E. Clyburn of South Carolina, said, “We are absolutely giddy” over the report from the budget office.

Republicans minimized the significance of the latest cost estimate, deriding the 10-year budget savings as paltry compared with what they called the staggering scale of the government’s debt.

Democrats see no prospect of obtaining any Republican votes for the bill, a top priority for Mr. Obama and Speaker Nancy Pelosi of California.

“Passage of health care reform is of paramount importance, and the president is determined to see this battle through,” Robert Gibbs, the White House press secretary, said in announcing that Mr. Obama had postponed until June his plan to travel to Indonesia and Australia.

Officials said that Senate leaders would spend Friday conferring with the Senate parliamentarian over the specific legislative language to determine if any provisions may be struck out for failing to meet the requirements of the complex process being used to alter the Senate bill, known as budget reconciliation.

Senior House Democratic aides said the decisions by the Senate parliamentarian could result in a final package of amendments, in the hope that the House could approve a bill on Sunday that would not require any further changes in the Senate.

Under the bill, the budget office said, the federal government would spend $940 billion over the next 10 years to provide coverage to 32 million people who would otherwise be uninsured.

The price tag, though higher than $875 billion cost of the Senate bill, is lower than the limit of $950 billion suggested by Mr. Obama.

The cost of the bill results from a significant expansion of Medicaid, to cover 16 million more low-income people, and the payment of federal subsidies to help moderate-income people buy health insurance on their own.

House Democrats said they had reduced the impact of a proposed tax on high-cost employer-sponsored health plans. White House officials have described the tax, included in the Senate bill, as a way to slow the growth of health spending.

Labor unions dislike the tax, but the A.F.L.-C.I.O. endorsed the overall legislation on Thursday.

Richard L. Trumka, the group’s president, said unions would “do everything we can” to lobby Congress on the bill.

Under the Senate bill, the tax on high-cost health plans would have raised $149 billion over 10 years. The new legislation delays and reduces the tax, slashing expected revenues to $32 billion.

Democrats would make up for some of the lost revenue by increasing the Medicare payroll tax and extending it to capital gains, dividends, interest and other “unearned income” of people with adjusted gross incomes over $250,000 for married couples and $200,000 for individuals.

The new Medicare tax would raise $210 billion over 10 years, more than twice as much as the $87 billion generated by the comparable provision of the Senate bill, according to the Congressional Joint Committee on Taxation. Fees and taxes under the new bill would total $438 billion over 10 years, up from $399 billion in the Senate bill.

Representative Luis V. Gutierrez, Democrat of Illinois, said he decided to vote for the health care bill on Thursday after receiving assurances from Mr. Obama that the White House would press forward with an immigration overhaul this year.

“I feel that what I have from the White House is a commitment to bring more enthusiasm, to make it a great priority to get immigration reform done this year,” said Mr. Gutierrez, who voted for the House bill in November but was noncommittal in recent days.

Ms. Pelosi said she was ready for a fierce fight. Insurance companies “will do anything to stop this legislation,” she said, asserting, “They have made a fortune off of the misfortune of the American people.”

The Senate Republican leader, Mitch McConnell of Kentucky, said the new legislation was “worse than the Senate bill.” Republicans said the new numbers should not provide any comfort to people worried about the deficit. In the first decade, they said, the picture is too rosy because many of the taxes and fees would start immediately, while the major costs would not show up for several years.

Nurses Association to rally March 8 against state budget cuts

The New York State Nurses Association will rally at the Capitol on Monday, March 8 to protest $1 billion in proposed cuts to health care in the Executive State Budget. The rally kicks off a multi-media campaign that includes print, billboard and television advertising in major markets statewide.

Over 300 registered nurses will gather in West Capitol Park to tell lawmakers that an under-funded budget equals under-staffed facilities. The rally will begin at 11:30 a.m. and legislators scheduled to speak include:
Assemblyman Richard Gottfried, Assemblywoman Susan John, Senator Diane Savino, and Senator Tom Duane.

Speaking on behalf of the Nurses Association are: NYSNA President Karen Ballard; National Federation of Nurses President Barbara Crane; President, NYSNA Delegate Assembly Rod Rocca; President, Local 436 AFSCME Judith Arroyo; Sharon Kennish, RN & CEO, St. Catherine’s Medical Center, Christopher Berner, Vice President of Labor & Employee Relations, Montefiore Medical Center; and Sondra Olendorf, RN, Maimonides Medical Center of Brooklyn.

Hospitals, nursing homes and public health programs face a combined reduction of more than $562 million in payments for services and $250 million in increased assessment on services delivered. These cuts have the potential to severely limit access to care and endanger patient safety.

The current proposal also cuts funding by $143,100 to programs to expand SUNY nursing education; severely diminishing the state university system’s ability to meet the needs of the nursing workforce over the next decade.

The New York State Nurses Association is the voice for nursing in the Empire State. With more than 37,000 members, it is the state’s largest union and professional association for registered nurses. It supports nurses and nursing practice through education, research, legislative advocacy, and collective bargaining.

Paterson Gives St. Vincent’s Hospital Another Loan

By Anemona Hartocollis

Gov. David A. Paterson provided the second cash infusion in a week Sunday to St. Vincent’s Hospital Manhattan in Greenwich Village, but said concessions from unions and physicians would be needed to keep the hospital open.

The governor said Sunday that after “hours of intensive discussions and calls between all parties” the state had agreed to put up $3 million and creditors another $3 million to keep the hospital going temporarily.

It was not clear how long the cash would last, and Mr. Paterson challenged other stakeholders to help as well.

The 160-year-old hospital is $700 million in debt and has stopped accepting new outpatients to its well-known H.I.V. and community health programs because it may be forced to close.

The governor said in a statement that saving St. Vincent’s would require “shared sacrifice,” adding: “We believe this assistance, if combined with assistance from the sponsors, concessions from the unions, management and physicians, cost-cutting actions and aggressive cash management will allow St. Vincent’s Medical Center the time needed to develop short-term and long-term plans for the future.”

The loan came on the heels of an $8 million loan from the state and the hospital’s main creditors, GE Capital and TD Bank, that was announced last Tuesday. The first loan was used for payroll and supplies and was exhausted almost immediately, in part because vendors are now demanding cash in advance or on delivery, hospital officials said.

City Council Speaker Christine C. Quinn, state and federal elected officials, and union leaders have become part of a group working with the governor and the state health department to save the hospital.

But so far, neither the city, the federal government nor the unions have proposed to contribute to the state’s efforts to keep the hospital going until a more permanent solution can be found. A spokeswoman for the hospital workers’ union, Local 1199 of the S.E.I.U., declined to comment Sunday evening.

As a political matter, wage concessions are sometimes more damaging to unions than layoffs, because laid-off workers do not vote in union elections while those whose salaries have been cut do.

Mayor Michael R. Bloomberg has taken a neutral, almost philosophical approach to the hospital’s plight. On Friday, he said in his weekly radio program that he doubted the hospital could stay open longer than six months, but he did not offer any help.

“People want to keep it open; that would be great if you could find a way to do it,” Mr. Bloomberg said. “I will say I find it hard to see how you can do that. You might be able to get it through another six months or something. The governor’s giving them a loan to pay their employees for another month, but unless you can really come up with a business model that works, which is difficult in the best of times for the best of hospitals, it’s a really tough proposition to come up with.”

Hospital Network Withdraws Proposal to Take Over St. Vincent’s

By Anemona Hartocollis

A large hospital network that had offered to take over the nearly bankrupt St. Vincent’s Hospital Manhattan in Greenwich Village has formally withdrawn its offer, further clouding the hospital’s prospects for survival.

Stan Brezenoff, president of Continuum Health Partners, a consortium of five hospitals in Manhattan and Brooklyn, said in a letter to Henry J. Amoroso, the president and chief executive of St. Vincent’s, that he was withdrawing the offer because of what he said had been a negative reaction to it from both the State Health Department and St. Vincent’s own board. The letter was sent last Friday but not released until Thursday. But Mr. Brezenoff left open the possibility that St. Vincent’s could return to talks with Continuum.

The uncertainty over St. Vincent’s future has led some doctors — especially star doctors — to begin making plans beyond their affiliation with St. Vincent’s. Several St. Vincent’s physicians have approached Continuum about securing admitting privileges at its hospitals, which would give them the right to work in those hospitals, Jim Mandler, a spokesman for the network, confirmed Thursday. Mr. Mandler said Continuum was talking to those doctors, “because we are very much aware of the recruitment efforts of other hospitals for these physicians.”

In its offer submitted to St. Vincent’s on Jan. 22, Continuum proposed to continue running outpatient facilities for the hospital, on 12th Street and Seventh Avenue, while funneling those who need inpatient care to its own hospitals, St. Luke’s Roosevelt on West 58th Street and Beth Israel, across town on the East Side. Most emergency room and inpatient services would have been eliminated.

St. Vincent’s, the last remaining Catholic general hospital in New York City, is $700 million in debt and needed a state loan this week to make its payroll.

The Continuum plan created an immediate uproar at St. Vincent’s and among local politicians, who said the neighborhood could not be without an emergency room or inpatient services and who accused Continuum of being more interested in shutting down competition and improving its own finances than in saving neighborhood health care.

In his letter, Mr. Brezenoff expressed pique that St. Vincent’s was considering looking for other offers, hinting that he believed that this would turn Continuum’s offer into a bargaining chip. He made it clear that his offer had been a take-it-or-leave-it one.

“On reflection,” Mr. Brezenoff said, “I feel constrained to take the formal step of withdrawing the proposal that we sent to you on January 22, 2010.”

Mr. Brezenoff declined to comment Thursday, but his swift withdrawal of the offer seven days after submitting it reflected his reputation as a skilled player of political hardball, skills honed as a former president of the New York City Health and Hospitals Corporation, executive director of the Port Authority of New York and New Jersey and a deputy mayor in the administration of Mayor Edward I. Koch.

His letter indicated that the door was still open to negotiation if St. Vincent’s came back to him on his terms. “Needless to say, I hope, we stand ready to resume discussions and negotiations at any time if it appears that this would be productive,” the letter said.

Sister Jane Iannucelli, the vice chairwoman of St. Vincent’s board, declined on Thursday to comment on Mr. Brezenoff’s letter.

Council Speaker Christine C. Quinn put a positive spin on Mr. Brezenoff’s decision, saying it could be good for the hospital, because it indicated “a growing recognition of all the parties involved in this process that the community is not going to accept a proposal that doesn’t sustain a full-service hospital.”

Continuum was absent from a meeting Wednesday with Gov. David A. Paterson, Mr. Amoroso, local elected officials, union leaders and hospital creditors to discuss a long-term solution for the hospital’s financial problems. The governor said after the meeting that the state had agreed to keep St. Vincent’s afloat for at least a month while it looked for partners.

Mr. Brezenoff suggested in his letter that the state had been critical of Continuum’s plan to eliminate the hospital’s inpatient beds and close its emergency room. Diane Mathis, a spokeswoman for the state Health Department, said the department had taken a neutral position on it. “This process has really just begun,” she said.

The Decline of St. Vincent’s Hospital

By Anemona Hartocollis

For more than 150 years, St. Vincent’s Hospital Manhattan has been a beacon in Greenwich Village, serving poets, writers, artists, winos, the poor and the working-class, and gay people.

It has treated victims of calamities: the cholera epidemic of 1849, the sinking of the Titanic in 1912, the 9/11 attack and, just last year, the Hudson River landing of US Airways Flight 1549. The poet Edna St. Vincent Millay got her middle name from the hospital, where her uncle’s life was saved in 1892 after he was accidentally locked in the hold of a ship for several days without food or water.

But today the hospital is struggling, and last week, in what could mean the death knell of the last Roman Catholic general hospital in New York City, a chain of hospitals proposed to take over St. Vincent’s, shut down its inpatient beds and most of its emergency room services, and convert it into an outpatient center tied to hospitals uptown and on the East Side.

Gov. David A. Paterson’s office said on Tuesday the state was extending a $6 million emergency loan to help St. Vincent’s meet its payroll, an indication of how dire its finances had become.

How St. Vincent’s went from a cherished neighborhood institution to one threatened with extinction is a chronicle of increasingly troubled management whose problems were made worse by the economics of the health care industry, changes in the fabric of a historic neighborhood and the low profit potential in religious work.

It was once part of the Roman Catholic Church’s social and political network in New York City, a cradle-to-grave embrace of parishioners who were born in Catholic hospitals, educated in parochial schools, married in the church and given last rites by a priest.

Last week, a day after the announcement of the proposed takeover, members of the Sisters of Charity, the Catholic order of nuns that founded the hospital in 1849, gathered for a noon Mass at St. Vincent’s second-floor chapel and vowed to fight. “We are not going away,” said Sister Jane Iannucelli, vice chairwoman of the hospital board, standing in the light of stained glass windows.

“One of the things that’s so crucial to the Sisters of Charity is serving the poor,” she said.

It was that very calling, some industry executives suggested, that may have helped make the hospital obsolete.

“Helping the poor is indeed the mission and the cause célèbre,” said Kenneth E. Raske, president of the Greater New York Hospitals Association, a trade group. “Therein lies the dilemma.”

Other hospitals emphasize high-tech care and rush to invest in the fancy equipment and celebrity doctors that attract patients with the means to pay for them; St. Vincent’s sticks to its motto of “compassionate care,” rooted in its origins as a place that trained nurses and that was under the auspices of nuns.

As the Village changed, becoming home to more middle-class families, by many accounts St. Vincent’s failed to change with it. In 2007, several years after an ill-fated merger with other Catholic hospitals, St. Vincent’s management proposed selling off its maze of outdated buildings around Seventh Avenue and 12th Street to build a state-of-the-art high-rise building across the street, to be designed by Pei Cobb Freed & Partners Architects, famous for cutting-edge projects like the glass pyramid expansion of the Louvre museum in Paris and the John Hancock Tower in Boston.

But some said it was too late. In an indication of how St. Vincent’s reputation had fallen in the neighborhood, during a fierce debate over whether to demolish a low-rise Modernist building to make way for the new hospital, the actors Susan Sarandon and Tim Robbins suggested that St. Vincent’s no longer served the neighborhood well.

“I would not want to bring my children there,” Ms. Sarandon declared at a landmarks preservation hearing.

At the height of the AIDS epidemic in the 1980s, St. Vincent’s ministered to those affected, and was bursting at the seams. But by the 1990s, drugs and public awareness helped bring AIDS under control, and the Village’s wealthy newcomers were choosing other hospitals.

From 1996 to 2007, the most recent year for which figures are available, the number of patients the hospital admitted went down by 10 percent, while the rate for hospitals citywide was flat, state records show.

And its emergency room volume has been growing faster than the citywide rate, suggesting that it has the worst of both worlds — more emergency room patients and fewer inpatient admissions, which are where the money is.

St. Vincent’s is a major city contractor for homeless services, and hospital administrators said that homeless people from all over the city find their way there for treatment.

In short, many of the patients who frequent St. Vincent’s are part of the old Village rather than the new Village, as was clear from a tour of the emergency room last week. It was electric with activity, every bed filled. Many of the patients were elderly, from Chinatown, or grizzled remnants of the Village’s old working class. Nuns from Mother Theresa’s order hovered about.

The room, like other parts of the hospital, had a homey feeling, more like a place television’s kindly Dr. Marcus Welby would have taken his patients rather than the overly caffeinated environment of “House.”

“There’s a sense we’re here for the mission, and it truly permeates,” said Dr. Eric Legome, the chairman of emergency medicine.

Despite 62,000 emergency visits, nearly 1,800 births, almost 22,000 hospital admissions and 263,000 outpatient visits a year, according to St. Vincent’s officials, the hospital is bleeding red ink, and has been for years.

Hospital officials, who asked not to be named because of the sensitivity of negotiations with Continuum Health Partners, the chain that has offered to take over the hospital, said the hospital was close to having to declare bankruptcy for the second time since 2005. It is about $700 million in debt.

Officials blamed a high rate of poor and uninsured patients as well as cuts in Medicare and Medicaid and the hospital’s inability to negotiate favorable contracts with health insurance companies, claiming their fees were 30 percent below the market rate.

Catholic hospitals in some parts of the country continue to thrive, but the New York City hospital field is much different from what it was 100 years ago; New Yorkers with health insurance now can choose from a number of prestigious hospitals.

To remain competitive, in 2000 St. Vincent’s merged with several other Catholic hospitals to form St. Vincent Catholic Medical Centers.

Along with the flagship hospital in the Village, it ran seven other hospitals: Bayley Seton and St. Vincent’s on Staten Island; Mary Immaculate, St. John’s and St. Joseph’s in Queens; St. Mary’s in Brooklyn; and St. Vincent’s Westchester, in Harrison, N.Y. It was also affiliated with St. Vincent’s Midtown, formerly St. Clare’s, in Midtown Manhattan.

The merger was conceived as a way to streamline management and give the hospitals pricing leverage, but it was troubled from the beginning. After closings and sales, the network was left with just one New York City hospital, the flagship; a psychiatric and substance abuse treatment hospital in Westchester; and several nursing homes and other outpatient facilities. Some of St. Vincent’s debt was inherited from the closed hospitals.

Over the last few years, St. Vincent’s has tried to polish its image, recruiting the Giants quarterback Eli Manning and former Mayor Rudolph W. Giuliani to raise money and attract customers.

It has traditionally been one of the beneficiaries of the Alfred E. Smith Foundation Dinner, an annual charity roast at the Waldorf-Astoria, where John McCain and Barack Obama traded jabs just before the 2008 election. The hospital’s chairman is Alfred E. Smith IV, a prominent Wall Street investment banker and the great-grandson of the New York governor who ran for president in 1928. Mr. Smith did not respond to a request for an interview.

In 2004, St. Vincent’s turned over management to Speltz & Weis, the first in a series of turnaround consultants. It paid the firms millions of dollars a year to run the hospital and hired their officials as hospital executives. The system filed for Chapter 11 bankruptcy protection in early July 2005, when it appeared, according to court papers filed by hospital creditors, that it would be unable to make its payroll.

In a lawsuit filed in 2007, some of the hospital’s creditors painted a picture of a hospital system trapped between unscrupulous consultants and a passive or gullible board. The lawsuit accused David E. Speltz and Timothy C. Weis, the hospital system’s former chief executive and chief financial officer, of delaying the bankruptcy organization while they and their consulting firm collected millions of dollars in fees.

The lawsuit accused them of hiring high-priced contractors and padding their fees, instead of using hospital employees to do work. And it says they leveraged their positions with the hospital to negotiate the sale of their consulting company to Huron Consulting Group, in Chicago, also a defendant in the case.

From 2004 until the lawsuit was filed, St. Vincent’s paid Speltz & Weis, which was based in New Hampshire, $30.8 million and Huron $1.2 million in fees and expenses, according to court papers.

The expenses included a personal membership in a private university club; trips to New York for spouses; hundreds of dinners in Manhattan restaurants’ opera tickets; groceries, dry cleaning and laundry bills; and travel and housing fees for consultants from outside New York, according to court papers.

Lawyers for Mr. Speltz and Mr. Weis did not return calls for comment. But they said in court papers that the creditors had written a “revisionist” history of events that unfairly blamed their clients for a bankruptcy that was actually caused by a $60 million shortfall in accounts receivable that had not been detected by auditors. Their firm had to bring in contractors for important jobs because previous St. Vincent’s managers had unwisely eliminated key positions, the lawyers said. The lawsuit is headed for mediation.

The current chief executive, Henry J. Amoroso, is its fourth since 2004. He did not respond to requests for comment. St. Vincent’s board announced last weekend that it had retained another crisis management firm, Grant Thornton.

Sister Jane, the vice chairwoman, acknowledged that the hospital was on the precipice. “We have had enough money to pay our salaries,” she said, but added, “The cash flow has gotten tighter and tighter, and yes, we are in a very vulnerable position.”

Last Thursday night, more than 500 people crowded into a basement meeting room at Our Lady of Pompeii Church on Carmine Street to protest the proposed takeover. One man, Mark Leonard, spoke of how a nurse offered to come to his house and baby-sit after he took home his very fragile twins from the St. Vincent’s intensive care unit.

“You guys must be exhausted,” he remembered the nurse calling to say. “You need a night out with your wife.”

Nancy Spannbauer, a program director for the Penn South senior citizens’ program in Chelsea, told of how she had been in the home of a 91-year-old woman a few days earlier while a doctor tried to get the woman to go to the hospital.

“Eventually she gave in,” Ms. Spannbauer said. “And she said, ‘Well, I suppose if I have to, I’ll only go to St. Vincent’s.’ ”