Former Hospitals Get A New Life

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Hollenbeck TerraceWhen Juana Monroy moved into Hollenbeck Terrace in 2015, she learned that the senior apartment building was once a hospital that had appeared in dozens of movies and television shows. Then she began hearing rumors that the old Linda Vista Community Hospital building was haunted. “I was a little scared,” says Monroy, 60.

But she hasn’t seen a ghost yet, and now she loves living in a building with such history. “It’s gorgeous,” she says.

Across the country, hospitals that have closed their doors are coming back to life in various ways: affordable senior housing in Los Angeles, luxurious multimillion-dollar condominiums in New York’s Greenwich Village, a historical hotel in Santa Fe, New Mexico. In the Capitol Hill neighborhood of Washington, D.C., a hospital that opened in 1905 to care for the poor was remodeled and reopened in 2017 with 139 apartment units, a rooftop deck and an indoor dog wash.

Such conversions can pull at the heartstrings of communities in which residents often have an emotional attachment to hospitals where family members were born, cured or died. Nevertheless, the changeovers can also be welcome, particularly when hospitals have been closed leaving their buildings empty and dilapidated.

Closing a hospital and converting it to another use is not exactly like renovating just any old building, says Jeff Goldsmith, a health industry consultant in Charlottesville, Virginia. “A hospital in a lot of places defines a community — that’s why it’s so difficult to close them,” Goldsmith says.

The trend of converting hospitals to condos and apartments comes as real estate values have soared in many U.S. cities, and demand for inpatient hospital care is on the decline. Surgery and other health services are being moved increasingly to freestanding outpatient centers, and the average number of days patients stay in hospitals has dropped significantly.

Against this backdrop, the hospital industry is consolidating, and many institutions are shutting their doors. The number of hospitals in the U.S. has declined by 21 percent over the past four decades, from 7,156 in 1975 to 5,627 in 2014, according to the latest federal data.

In addition, many older hospitals are too outmoded to be renovated for today’s medical needs, which include large operating room suites and private rooms.

Real estate investors say the location of many older hospitals — often in city centers near rail and bus lines — makes them attractive for redevelopment. The buildings, with their wide hallways and high ceilings, are often easy to remake as apartments.

Some of the changes have elicited controversy, however — particularly in New York, where many hospitals have been converted to residential housing in recent years.

St. Vincent’s Transformation

St. Vincent’s hospital in New York, which traditionally cared for the poor and treated survivors of the Titanic’s sinking in 1912, the first AIDS patients in the 1980s and victims of the 9/11 terrorist attacks in 2001, went bankrupt and closed seven years ago. Developer Rudin Management bought it for $260 million and transformed it into a high-end condo complex, which opened in 2014. In early 2017, former Starbucks CEO Howard Schultz reportedly bought one of the condos for $40 million. The shift from a place that cared for the poor to a home for the wealthy, upset many residents in Greenwich Village.

Jen van Meer, an assistant professor at the Parsons School for Design in New York, who lives four blocks from the former St. Vincent’s, says people in her neighborhood were sorry to see the hospital close for more than just sentimental reasons. Because today, if a person is having a cardiac arrest, the nearest hospital is almost an hour drive by car or 20 minutes in an ambulance across the city.

St. Vincent’s is one of at least 10 former hospitals in New York City that have been turned into residential housing over the past 20 years.

Spurring Development

In some circumstances, a conversion provides a much needed lift for the community. New York Cancer Hospital, which opened on Central Park West in 1887 and closed in 1976, was an abandoned and partially burned-out hulk by the time it was restored as a condo complex in 2005. Developer MCL Companies paid $24 million for the property, branded 455 Central Park West.

“The building itself is fantastic and a landmark in every sense of the word,” says Alex Herrera, director of technical services at the New York Landmarks Conservancy. He notes that it has retained some of its original 19th-century architecture.

Repurposing hospitals does not come without friction, however.

Nicky Cymrot, president of the Capitol Hill Community Foundation in Washington, D.C., a neighborhood group, says that when Specialty Hospital Capitol Hill sold off a little-used 100,000-square-foot wing of its facility to developers who planned to build apartments, neighbors weighed in with concerns about aesthetics and traffic. But the builders of 700 Constitution — the hospital-turned-apartment house a few blocks from the U.S. Capitol — preserved the old architecture, which pleased residents.

The renovation cost $40 million and took nearly nearly five years to complete in part because of delays in building an underground parking garage. At 700 Constitution, one-bedroom apartments rent for nearly $2,600 per month.

It’s not the first hospital in the district to make such a conversion. Columbia Hospital for Women which had delivered more than 250,000 babies since it opened shortly after the Civil War, closed in 2002 and reopened in 2006 as condos with a rooftop swimming pool in the city’s fashionable West End. 

Some former hospitals are used for purposes other than housing. In San Diego, Point Loma’s Cabrillo Hospital closed in 2007 and was transformed into a language school nine years later, providing economic stimulus for nearby businesses.

In Santa Fe, New Mexico, St. Vincent Hospital moved into a new facility in 1977 and the old structure downtown was reborn as a state office building. Later, it was abandoned and locals listed it as one of the spookiest places in town. In 2014, the building reopened yet again as the 141-room Drury Plaza Hotel.

‘A Building With Tremendous History’

Linda Vista Community Hospital, which overlooks a park in L.A.’s Boyle Heights neighborhood, opened in 1905 to serve railroad employees. Budget problems and declining patient rolls led to its closure 86 years later, and the abandoned six-story building fell into disrepair.

But the empty patient rooms, discarded medical equipment and aging corridors soon attracted film crews, who shot scenes for movies such as “Pearl Harbor” and “Outbreak.” The hospital also attracted trespassers looking for ghosts and groups such as the Boyle Heights Paranormal Project. The property was purchased and redeveloped by Amcal Multi-Housing Inc. in 2011.

The company turned patient rooms into affordable senior apartments and renovated everything from the intensive care unit to the medical library. Amcal retained many of the building’s original features, including mailboxes, dumbwaiters, windows and stainless-steel doors.

“They really rescued a building with tremendous history … while providing really needed low-income senior housing,” says Linda Dishman, CEO of the Los Angeles Conservancy, a group dedicated to preserving and revitalizing historic structures. “It is such an iconic building in the neighborhood.”

Accountable Care Organizations: Explained

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Doctor Smiling PoseOne of the many ways the Affordable Care Act seeks to reduce health care costs is by encouraging doctors, hospitals and other health care providers to form networks that coordinate patient care and become eligible for bonuses when they deliver that care more efficiently.

The law takes a carrot-and-stick approach by encouraging the formation of accountable care organizations (ACOs) in the Medicare program. Providers make more if they keep their patients healthy. About 6 million Medicare beneficiaries are now in an ACO. An estimated 23.5 million Americans are now being served by an ACO. People may even be in one and not know it.

While ACOs are touted as a way to help fix an inefficient payment system that rewards more, not better, care, some economists warn they could lead to greater consolidation in the health care industry, which could allow some providers to charge more if they’re the only game in town.  

Here are answers to some common questions about how they work:

What is an accountable care organization?

An ACO is a network of doctors and hospitals that shares financial and medical responsibility for providing coordinated care to patients in hopes of limiting unnecessary spending. At the heart of each patient’s care is a primary care physician.

Think of ACOs as buying a television. A TV manufacturer like Sony may contract with many suppliers to build television sets. Like Sony does for TVs, an ACO brings together the different component parts of care for the patient – primary care, specialists, hospitals, home health care, etc. – and ensures that all of the “parts work well together.”

In most health systems today, many patients are getting each part of their health care separately. ACOs, like the television, work better as one component rather than assembling a patchwork of services.

Why did Congress include ACOs in the law?

As lawmakers searched for ways to reduce the national deficit, Medicare became a prime target. With baby boomers entering retirement age, the costs of caring for elderly and disabled Americans are expected to soar.

The health law created the Medicare Shared Savings Program. In it, ACOs make providers jointly accountable for the health of their patients, giving them financial incentives to cooperate and save money by avoiding unnecessary tests and procedures. For ACOs to work, they have to seamlessly share information. Those that save money, while also meeting quality targets, keep a portion of the savings.

In Medicare’s traditional fee-for-service payment system, doctors and hospitals generally are paid for each test and procedure. That drives up costs, experts say, by rewarding providers for doing more, even when it’s not needed. ACOs don’t do away with fee-for-service, but they create an incentive to be more efficient by offering bonuses when providers keep costs down. Doctors and hospitals have to meet specific quality benchmarks, focusing on prevention and carefully managing patients with chronic diseases. In other words, providers get paid more for keeping their patients healthy and out of the hospital.

How do ACOs work for patients?

Doctors and hospitals will likely refer patients to hospitals and specialists within the ACO network. But patients are usually still free to see doctors of their choice outside the network without paying more. Providers who are part of an ACO are required to alert their patients, who can choose to go to another doctor if they are uncomfortable participating. The patient can decline to have his data shared within the ACO.

Who’s in charge — hospitals, doctors or insurers?

ACOs can include hospitals, specialists, post-acute providers and even private companies like Walgreens. The only must-have element is primary care physicians, who serve as the linchpin of the program.

In private ACOs, insurers can also play a role, though they aren’t in charge of medical care. Some regions of the country, including parts of California, already had large multi-specialty physician groups that became ACOs on their own by networking with neighboring hospitals.

In other regions, large hospital systems are scrambling to buy up physician practices with the goal of becoming ACOs that directly employ the majority of their providers. Because hospitals usually have access to capital, they may have an easier time than doctors in financing the initial investment, for instance to create the electronic record system necessary to track patients.

If I don’t like HMOs, why should I consider an ACO?

ACOs may sound a lot like health maintenance organizations. Some people say ACOs are HMOs in disguise. But there are some critical differences – notably, an ACO patient is not required to stay in the network.

ACOs aim to replicate “the performance of an HMO” in holding down the cost of care while avoiding “the structural features” that give the HMO control over [patient] referral patterns.

In addition, unlike HMOs, the ACOs must meet a long list of quality measures to ensure they are not saving money by restrictions on necessary care.

Are ACOs the future of health care?

ACOs are already becoming pervasive, but they may be just an interim step on the way to a more efficient American health care system. ACOs aren’t the end game.

One of the key challenges for hospitals and physicians is that the incentives in ACOs are to reduce hospital stays, emergency room visits and expensive specialist and testing services — all the ways that hospitals and physicians make money in the fee-for-service system.

The ultimate goal would be for providers to take on full financial responsibility of caring for a population of patients with a fixed payment, but that will require a transition beyond ACOs.

Hospitals Struggle to Improve Patient Satisfaction

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Lillie Robinson came to Rowan Medical Center, Salisbury, North Carolina, for surgery on her left foot. She expected to be in and out in a day, returning weeks later for her surgeon to operate on the other foot.

But that’s not how things turned out. “When I got there I found out he was doing both,” she said. “My husband and I didn’t realize that until they started medicating me for the procedure.” Robinson signed a consent form and the operation went fine, but she was told she would be in the hospital far longer than she had expected.

“I wasn’t prepared for that,” she said.

Disappointing patients such as Robinson is a persistent problem for Rowan, a hospital with some lower levels of patient satisfaction in the country. In surveys sent to patients after they leave, Rowan’s patients were less likely than those at most hospitals to say they always received help promptly and that their pain was controlled well. Rowan’s patients said they would recommend the hospital far less often than patients do elsewhere.

Feedback from patients such as Robinson matters to Rowan and to hospitals across the country. Since Medicare began requiring hospitals to collect information about patient satisfaction and report it to the government in 2007, these patient surveys have grown in influence.  For the past three years, the federal government has considered survey results when setting pay levels for hospitals. Some private insurers do as well.

In April 2015, the government will begin boiling down the patient feedback into a five-star rating for hospitals. Federal officials say they hope that will make it easier for consumers to digest the information now available on Medicare’s Hospital Compare website. However, hospitals say judging them on a one-to-five scale is too simplistic.

Some Hospitals Improve As Others Stagnate 

Nationally, the hospital industry has improved in all the areas the surveys track, including how clean and quiet their rooms are and how well doctors and nurses communicate. But hundreds of hospitals have not made headway in boosting their ratings, federal records show.

For the most part, the organizations that are doing really wonderfully now were doing well five years ago, according to Press Ganey, a company that conducts the surveys for many hospitals. The high performers tend to continue to be the high performers and the low performers tend to be low performers.

Some hospitals have made great gains. The University of Missouri Health System, for example, created a live simulation center at its medical school in Columbia to help doctors learn to communicate better with patients. The simulations use paid actors. Instead of having to diagnose the patient, doctors must respond to nonmedical issues, such as a feuding teenager and mother or a patient angry that he was not given information about his condition quickly enough.

“My scenario was that I was late to the appointment and the patient’s husband was upset,” said a physician at Missouri’s University Hospital. In 2013, the most recent year that the government has provided data, 78 percent of patients at University Hospital said doctors always communicated well, a 10 percentage point jump from 2007. Other scores rose even more.

At Virginia Hospital Center in Arlington, executives credit improvements in patient satisfaction to their psychological screening methods in hiring and rigorous job reviews. Potential nurses and other staff must first pass a behavioral screening test and then be interviewed and endorsed by some of the staffers with whom they would be working. In the third element of the program, every six months, managers rate employee performance as high, medium or low. Low performers are told to improve or find work elsewhere.

“Those are the three most defining things we did as an organization,” said the hospital’s chief marketing officer. “Without that, it’s guaranteed we wouldn’t have had the successes.”

Rowan’s nurses now spend 70 percent of their time with patients, swinging by every hour. Even the president makes rounds once a day. The hospital has made lots of small improvements to provide a warmer environment, such as putting white poster boards in each room where nurses can list a few personal details about their patients.

“I can go in there and say ‘Oh, you have three dogs’ or ‘You have a great, great grandchild,’” said a nurse manager. “And a patient can talk about that for hours.”

The hospital staff pores over patient comments and surveys, passing around the good ones and tackling complaints. They are driven by what these patients say. Everything they do is based around how these patients come back with comments in the survey that say, this is working or this isn’t working.

Perceptions Are Sometimes Hard To Change 

Rowan executives fear scores may not be going up because patients still harbor bad memories from previous hospitalizations.

One patient said “It is fantastic from what it used to be if you want my opinion. “I’ve been both ways and the way it is now, it is great. No waiting and the doctors are all pleasant. I never thought I’d see it like this.” He said he would give the hospital top marks.

His daughter said that in the last visit she had to nag the nurses to get her dad his medication. This time, it has not been an issue. “It’s like a totally different hospital,” she said. “Did I come to Rowan Regional?”

Despite the unexpected operation on both feet, Robinson also said nurses have been attentive to her pain. “They do the best they can,” she said.

But “the best they can” is not good enough for Medicare. In determining how much to pay hospitals, the government only gives credit when patients says they “always” got the care they wanted during their stay, such as their pain was “always” well-controlled. If a patient says that level of care was “usually” provided, it does not count at all. Likewise, the surveys ask patients to rank their stays on a scale of 0 to 10; Medicare only pays attention to how many patients award the hospital a 9 or 10.

“Sometimes what we see and hear from our patients doesn’t show up on their surveys,” Rowan’s president said.

Another challenge for hospitals is that Medicare does not take into account the inexact nature of these ratings, which can be based on as few as 100 patients over a year. Medicare recommends a minimum of 300 surveys, but even those have imperfections that Medicare does not highlight when publishing ratings on Hospital Compare, or take into account when determining financial bonuses or penalties.

“Lillie Robinson said that they’d take great care of her as she recovered from surgery in the hospital. “They were very soothing, comforting, they weren’t condescending. It was a great experience, Lillie said.”