[Congressional Record (Bound Edition), Volume 152 (2006), Part 10]
[Extensions of Remarks]
[Pages 13041-13042]
[From the U.S. Government Publishing Office, www.gpo.gov]




        EVIDENCE OF SUCCESS IN A SMALL HARLEM COMMUNITY HOSPITAL

                                 ______
                                 

                         HON. CHARLES B. RANGEL

                              of new york

                    in the house of representatives

                        Wednesday, June 28, 2006

  Mr. RANGEL. Mr. Speaker, I rise today to praise the successful 
financial restructuring of the North General Hospital, a small 
community hospital located in Harlem that caters to the neighborhood's 
vast majority of poor and elderly members. North General Hospital was 
founded in 1979 and since then, because of the uninsured population it 
serves who use the hospital for its primary care needs, it had been 
suffering from severe losses that threatened the hospital's success. 
However, last year, Dr. Samuel Daniel, North General's Chief Executive 
and his team launched a plan for a complete transformation that has 
since proved to be an absolute success.
  I would like to enter into the Record an article by Rafael Gerena-
Morales from the June 22nd, 2006 edition of the Wall Street Journal 
entitled, How a Harlem Hospital Healed Itself. This article tracks the 
success of North General Hospital as well as the positive outlook for 
the future of this promising health care center. According to Gerena-
Morales, the strategy pursued by the hospital's Chief Executive and his 
team has been so successful that the hospital went from a nearly $20 
million dollar loss in 2003 to a $2.6 million dollar surplus in 2005.
  These achievements are even more appreciated when taking into account 
the challenges that the hospital has faced since its establishment. 
North General has always struggled with low government reimbursement 
rates and it treats a community with a high percentage of uninsured 
patients who cannot pay their medical bills. Furthermore, the hospital 
historically provided mainly low-margin routine checkups and physical 
exams, since it did not possess the resources to pay for high-priced 
medical specialists.
  All this changed when North General began to focus more on treating 
diseases that afflicted Harlem residents in high rates such as 
cardiovascular problems, hypertension, obesity, diabetes and infant 
mortality. By offering surgical procedures to treat these illnesses, 
North General was able to attract more patients and expand its revenue. 
Additionally, it began to promote its services at community health 
fairs, further inviting patients to the small hospital. North General 
Hospital appealed to the need for emergency care by adding ambulances 
that brought more Harlem residents to its emergency room.
  Another key to success was in the partnership established with Mount 
Sinai Medical Center located only one mile away from North General 
Hospital. Mount Sinai is one of New York's most prominent teaching 
hospitals, and with its alliance, North General has been able to expand 
the services it offers on campus by gaining access to 16 Mount Sinai 
specialist doctors who perform vascular surgery, lung biopsies, 
urology, radiology, and pediatric psychiatry.
  All in all, this small community hospital embodies the example of a 
successful health

[[Page 13042]]

care institution that truly cares for its own. Surely, the health of 
Harlem residents will benefit greatly from the achievements of North 
General Hospital, and this hospital remains a source of hope for other 
small hospitals hoping to make a difference in their own communities.

             [From The Wall Street Journal, June 22, 2006]

                  How a Harlem Hospital Healed Itself

                       (By Rafael Gerena-Morales)

       Since its founding in 1979, North General Hospital, a small 
     community hospital in Harlem that caters to the poor and 
     elderly, had always lost money--until last year.
       That's when the hospital's 2-year-old turnaround plan 
     started to pay off. The strategy was so successful that the 
     hospital's bottom line swung to a $2.6 million surplus in 
     2005 from a nearly $20 million loss in 2003. The hospital 
     anticipates another $2 million surplus this year.
       How North General, a 200-bed hospital located in a 
     predominately black and Latino neighborhood, fixed its 
     finances ``sounds like a business-school case study,'' says 
     Liz Sweeney, who covers the New York state hospital industry 
     for Standard & Poor's, the credit-ratings service.
       Struggling with low government reimbursement rates and 
     mainly providing low-margin routine checkups and physical 
     exams, Samuel Daniel, North General's chief executive since 
     2001, says he and his management team plotted a strategy to 
     tackle a tough question: ``How do we turn the hospital 
     around?''
       Among the answers: North General focused more on treating 
     ailments that afflicted Harlem residents in high rates, 
     including cardiovascular problems, hypertension, obesity, 
     diabetes and infant mortality. It offered additional surgical 
     procedures that brought in additional revenue. It promoted 
     its services at neighborhood fairs and community centers. It 
     struck an alliance with a nearby prominent medical center 
     that gave North General patients access to more specialty 
     care.
       Running an inner-city hospital has long been financially 
     draining. Such hospitals lack the money and cutting-edge 
     equipment to compete against larger hospitals. They lose top 
     recruits to prominent teaching hospitals. Low-income 
     communities tend to have a higher percentage of uninsured 
     patients who can't pay their medical bills or are covered by 
     government health plans that typically pay less for medical 
     services than private insurers. And low-income patients 
     frequently bolt to hospitals in affluent areas when they need 
     specialty care.
       North General faces these obstacles, yet its plan is 
     working. From 2002 to 2005, the number of patient discharges 
     jumped 40 percent to nearly 9,000, and is expected to climb 
     to 9,225 this year, according to the hospital. Outpatient 
     volume between 2002 and 2005 rose 32 percent to 95,746 
     visits, and 103,520 visits are expected this year.
       During the 3-year period to 2005, North General's revenue 
     rose 45 percent, boosted by higher patient visits, including 
     surgical procedure volumes that jumped nearly 20 percent. 
     This year, North General estimates revenue will rise 2.7 
     percent to $152 million from $148 million last year. North 
     General is paid in large part by government health plans, 
     such as Medicare and Medicaid, and to a lesser extent by 
     private insurers.
       But before offering any new services, North General had to 
     confront a major problem: attracting higher-skilled surgeons. 
     ``We needed the technical know-how,'' Dr. Daniel says.
       The hospital couldn't afford to hire these surgeons, so Dr. 
     Daniel tried another route: He forged an alliance with the 
     Mount Sinai Medical Center, one of New York's most prominent 
     teaching hospitals located just a mile away from North 
     General. (In addition to his North General duties, Dr. Daniel 
     is an associate clinical professor of medicine at Mount 
     Sinai's medical school.)
       He approached Mount Sinai's president and CEO, Kenneth L. 
     Davis, and the two men agreed that both hospitals could 
     benefit from a collaboration. Within 90 days, the hospitals 
     reached an agreement that took effect in January of 2004.
       North General pays Mount Sinai an annual $2.7 million and 
     in return gains access to 16 Mount Sinai doctors who perform 
     vascular surgery, lung biopsies, and other highly specialized 
     services on North General's campus. Mount Sinai also provides 
     specialists in urology, rheumatology, radiology, and 
     pediatric psychiatry. North General receives the revenue from 
     these services. In a separate agreement, North General and 
     Mount Sinai have teamed up to provide free preventive care to 
     Harlem residents with chronic illnesses in exchange for 
     higher Medicaid reimbursement rates at its outpatient clinic. 
     (The arrangement has benefited both Mount Sinai and New York 
     state.
       Contracting these specialists costs less than if the 
     hospital hired the doctors on its own, says Michael Greene, 
     North General's chief operating officer. The contract also 
     gives North General staffing flexibility because it can ask 
     Mount Sinai to send specialists for extra hours as more 
     patients come in for these specialty services. This helps 
     North General control labor costs by linking a doctor's work 
     hours to patient volumes.
       For Mount Sinai, the deal boosts the hospital's revenue and 
     brings in patients. Last year, North General transferred 
     roughly 375 patients to Mount Sinai for cardiology, 
     neurosurgery and obstetrics services. As a teaching hospital 
     handling complex cases, Mount Sinai ``needs community 
     hospitals as referral sources,'' Dr. Davis says.
       In 2004, North General began offering bariatric, or weight-
     loss, surgery, in which a surgeon staples off a section of a 
     patient's stomach, leaving a tiny pouch that absorbs less 
     food. Last year, North General performed 109 such surgeries 
     and it expects to perform 125 this year. Medicare and 
     Medicaid typically pay North General $10,000 to $12,000 per 
     bariatric surgery, though a complicated procedure can bring 
     in as much as $20,000. Last year, the bariatric surgery 
     program generated $725,000 in revenue and a $25,000 profit, 
     according to Frank Hagan, North General's chief financial 
     officer.
       Since many emergency-room patients were being sent to 
     hospitals in other neighborhoods, North General added 
     ambulances in 2002 and 2004 that brought more Harlem 
     residents through its emergency room--thus boosting revenue. 
     Emergency-room visits jumped 16% to nearly 34,450 in 2005 
     compared with 2002. North General estimates that roughly 
     eight out of 10 patients who are admitted to the hospital 
     stem from emergency-room visits.
       North General recognized that infant mortality is a health 
     problem that looms large in the Harlem community. In August 
     2004, the hospital opened the Women's Health Center in a 
     separate building that handled nearly 4,000 visits last year. 
     The center offers a prenatal program with services that 
     include ultrasound, nutritional counseling and social work. 
     While the center isn't yet profitable, North General says 
     female patients who are treated at the center are more likely 
     to bring family members to North General for other medical 
     care.
       Last year, the hospital expanded its AIDS center and opened 
     a new cardiac-catheterization laboratory that checks patients 
     for clogged arteries, a precursor to heart trouble. The 
     profitable AIDS center, which is promoted in Harlem through 
     brochures, open-house events and free HIV testing at local 
     health fairs, handled more than 6,400 visits in 2005 and 
     projects roughly 7,250 visits this year.
       Since opening in December, the catheterization laboratory 
     has handled 152 visits, and projects 300 cases for 2006. 
     North General markets the lab's services to primary-care 
     physicians and cardiologists.
       Henock Saint-Jacques, a North General cardiologist, says he 
     used to refer patients to other hospitals for exams, but he 
     estimates as many as 30 percent of patients wouldn't make the 
     trip. ``Those problems started to fade away'' once North 
     General opened its cardiac lab, he says. ``This has improved 
     the quality of care.''

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