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PEDIATRIC UNITS SPEND MILLIONS TO SURVIVE - The Record (Bergen County, NJ)

LINDY WASHBURN, Staff Writer
The Record (Bergen County, NJ)
09-25-1994
PEDIATRIC UNITS SPEND MILLIONS TO SURVIVE -- COMPETE FOR A SHRINKING MARKET

By LINDY WASHBURN, Staff Writer
Date: 09-25-1994, Sunday
Section: NEWS
Edition: All Editions -- Sunday

North Jersey hospitals are investing millions of dollars in
building and marketing new services for children, even though the number
of children in need of hospital care is dwindling and more hospital beds
go empty each night.

In Paterson, the Children's Hospital at St. Joseph's -- so
designated by the state Legislature in January -- has launched a major
campaign to attract families from Warren, Sussex, and Bergen counties to
add to its patient base, now primarily from Passaic County.

In Hackensack, a $30 million tower of glass and steel completed in
April houses dozens of pediatric programs 'under one new roof' at
Hackensack Medical Center.

In Newark, Children's Hospital, a part of United Hospitals Medical
Center and the only children's hospital licensed by the state Health
Department, has broken ground on an $80 million replacement building.

And on a smaller scale, Pascack Valley Hospital in Westwood is
advertising a new 'ER Express,' an urgent-care center for children.
Englewood Hospital and Medical Center is renovating its 23-bed pediatric
unit. Holy Name Hospital is promoting 'The Sniffles Club,' its day-care
center for mildly ill children.

Parents may feel like gamblers visiting Atlantic City, with one
casino outdoing the other to get their business. But all that glamour
comes at a price: What they don't know is that 119 of the 257 hospital
beds staffed and equipped for children in Bergen and Passaic counties go
empty each night. And that on an average day, one hospital, Wayne
General, has only one pediatric patient, and another, Passaic Beth
Israel, has only two. And one hospital, St. Mary's in Passaic, admits
children, even though it has no licensed pediatric beds.

When a child becomes seriously ill, parents in North Jersey face
a surfeit of choices: 12 hospitals here and a dozen more in New York
City. But given the overblown advertising, competing claims, and dearth
of standard comparisons, how does one choose?

To most parents, 'a hospital is a hospital is a hospital,' says
David Troast, chairman of the state's Pediatric Clinical Advisory
Committee. Families don't know what questions to ask, he says, or how to
interpret the answers.

Does this abundance improve the health care of the region's
children? Some argue that the redundancy costs the health-care system --
and ultimately patients -- too much. They say it dilutes the number of
children each facility treats so much that the quality of pediatric care
may suffer.

'Volume is so important,' Troast says. 'If a Hackensack [hospital]
competes with a Paterson [hospital], both do less. Both are less
competent.'

Others argue that if hospitals meet basic standards of care, they
should be allowed to offer whatever services they want. They say
consumers can only benefit from the availability of more services in
more locations.

'The state's job is to set the standards,' says Dr. Alexander
Hyatt, chief of pediatrics at Englewood Hospital and Medical Center. 'If
a hospital wants the privilege of caring for children, they have to make
the investment to meet the standards.'

The conflict echoes the national health-care debate about the role
of government and the free market in shaping the health-care system. It
pits those who consider free choice paramount against those who consider
the ever-escalating cost of health care most important.

But for a parent who must decide quickly what is best for a sick
child, the competition complicates an already difficult situation.

'We regulate people who do cardiac surgery,' says Paul Langevin,
acting deputy commissioner of the state Department of Health. 'We don't
let hospitals advertise themselves as trauma centers unless they are
trauma centers.'

But hospital care for children is a marketing free-for-all.

'There really is no truth in advertising,' says Dr. Richard Flyer,
a Verona pediatrician whose advocacy of standards for children's
emergency care led to a state law. Only a small part of that 1992 law --
not the part that sets standards for emergency rooms -- has been
implemented.

A proposal to create a coherent system of pediatric care -- with a
three-tiered hierarchy of hospitals -- is to be presented to state Health
Commissioner Len Fishman by Troast's committee in October. Many of the
recommendations have been opposed by smaller hospitals, whose three-,
four-, and five-bed pediatric units would be closed. The committee's
recommendations could become law, or they could be shelved.

If the state remains unsure of what's best for New Jersey's kids,
the state's managed-care companies already have decided what's best for
their members and themselves. Managed-care companies have created
unofficial pediatric 'systems' by restricting patients to certain
hospitals and specialists, paying for same-day surgery instead of
overnight hospital stays, and sometimes encouraging non-hospital
surgery.

Why the sudden interest in, and competition for, children who need
hospital care? It is because of the profound medical changes in
children's health care in this decade and the turbulence of the
hospital business in New Jersey.

Children spend far less time in hospitals than they did a
generation ago. New vaccines and antibiotics have virtually eliminated
some diseases and made others less than life-threatening. Even bacterial
meningitis, a mainstay of pediatric practice, has become uncommon as the
result of a vaccine that became available in 1990. Chickenpox may soon
follow.

Also, technical advances in surgery and anesthesia have reduced the
trauma of operations and speeded recovery. Whereas children used to
spend three weeks in bed after an appendectomy, they now are walking
after one day, home in four.

Many common operations, such as ear-tube insertions and hernia
repairs, do not require an overnight stay. In fact, every hospital in
northern New Jersey where pediatric surgery is performed does more
same-day surgery than in-patient surgery.

In addition, many treatments, such as intravenous antibiotics
and physical rehabilitation, are available at home. Many home
health-care agencies offer specialized pediatric nurses for home visits.

Only the very sick are admitted to hospitals, and pediatric
hospital care has become more specialized. It is based on the principle
that 'children are not small adults' in their symptoms, reactions to
medication, and course of the illness.

Another consequence of these changes, however, is the plunge in
pediatric units' occupancy rates. Pediatric units at 12 hospitals in the
region that care for children were 47.6 percent full in 1993, a figure
that holds for the state as well. That's just marginally higher than the
43.4 percent occupancy rate in 1986, even though 576 beds were
eliminated in the meantime. Some experts estimate that New Jersey has
800 pediatric beds it doesn't really need.

From a business point of view, such vacancies burden the bottom
line. But hospitals don't view pediatric care strictly in terms of
numbers.

They look on it as a sort of loss leader: a way to build a good
image, win a bigger market share, and compete for managed-care
contracts.

Many consider pediatrics to be part of a full-service community
hospital's mission: to meet the community's health needs from birth to
death. Without it, the hospital's services might be perceived as
incomplete or patchy.

The treatment of sick and injured children also is a great public
relations tool. Can there be better advertising than the word-of-mouth
accounts of grateful parents and grandparents? A more persuasive
fund-raiser than the healing of a community's children?

Furthermore, the hospital that cares for a family's children
expects to win that family's loyalty for life, whether as the site of
the mother's next delivery or a grandparent's hip replacement.

Finally, hospitals try to offer managed-care companies, which are
responsible for meeting the health-care needs of ever-increasing numbers
of people, everything they want -- the medical equivalent of one-stop
shopping. Each hospital wants to be the one with which the managed-care
company strikes a deal for all its local members.

These concerns heightened last year when the state Legislature
ended 12 years of state-set hospital rates (and guaranteed bottom lines)
and left hospitals to the free market. And so hospitals began competing
for customers, be they individuals or managed-care companies.

A result has been marketing mania. Commercials broadcast the
disturbing sound of a baby's cries over a darkened television screen,
and cheerful pictures of toddlers at play.

The fear among hospital executives, of course, is that the free
market will force some hospitals to close or be absorbed by larger
institutions. Each is busily positioning itself to avoid that fate.

With all this afoot, one thing is clear: 10 or even five years
from now, children's hospital care in New Jersey will be quite
different, reshaped partly by consumer demand and partly by how the
state decides to regulate it.

(CHART TEXT, PAGE a08)

HOSPITAL OCCUPANCY RATES

For pediatric units, 1993

St. Joseph's Hospital and Medical Center - 73.5%

Hackensack Medical Center - 66.3%

The Valley Hospital - 57.5%

Holy Name Hospital - 48%

Barnert Hospital - 47.7%

Englewood Hospital and Medical Center - 46%

Pascack Valley Hospital - 31.2%

Chilton Memorial Hospital - 29.9%

The General Hospital Center at Passaic - 27.6%

Wayne General Hospital - 24.5%

Passaic Beth Israel Hospital - 15%

SOURCE: Hospitals

Illustrations/Photos: CHART - CHES WADJA / STAFF ARTIST - HOSPITAL OCCUPANCY
RATES.

Keywords: NEW JERSEY. HOSPITAL. CHILD. HEALTH. FINANCE

Copyright 1994 Bergen Record Corp. All rights reserved.