There is no exact moment when the gears locked and the system began to fail. In the 1940s, the city had optimistically floated $150 million in bonds to build five new hospitals and upgrade several others, with plans for a high-rise tower on the Bellevue grounds. But the following decades saw a steady outflow of working- and middle-class whites to the suburbs of Long Island, Westchester, and New Jersey, costing the city billions in tax revenue and consumer spending. As late as 1956, Bellevue’s patient population was 80 percent “white” and 12 percent “Jewish.” A decade later, these numbers were down by 50 percent and heading for the cliff. Part of the exodus was the appeal of better housing, greener space, and the lure of the automobile; the other part was about escaping the poor African Americans and Puerto Ricans now crowding into New York. The end result was a city with fewer financial resources and greater social needs.
Compounding the problem was the expansion of hospital insurance through third-party providers like Blue Cross. By 1960, more than half the families in New York City belonged to a group plan through the civil service, a labor union, or an employer-benefit program. Given the option, who wouldn’t choose the comfort of a semiprivate room in a voluntary hospital over a bare-bones ward at Bellevue when the insurer was footing most of the bill?
Hospital costs, meanwhile, began to soar. It wasn’t just expensive new technologies, though these, no doubt, played a role. By the 1960s, the care of patients had come to include a vast army of “allied health professionals”—therapists, dietitians, technicians, social workers, nursing specialists—who outnumbered the doctors ten to one. Many of them belonged to labor unions, and their example led hospital workers to demand the same collective bargaining rights as other municipal employees, which the city granted. Then came the embarrassing revelation that many of the foreign-educated interns and residents at public hospitals other than Bellevue had failed the AMA’s screening exam, often more than once. To fix the problem, the city signed “affiliation contracts” with the better medical schools to give the likes of Harlem Hospital and Coney Island Hospital the sort of patient coverage that Bellevue already enjoyed.
It seemed like a good idea. Linking medical schools to public institutions could ideally help both sides—the former getting to train their students and house staff at city expense; the latter avoiding a loss of accreditation that might force them to close. But theory and practice, in this instance, rarely coincided. Without firm budget guidelines and regular audits, the affiliation contracts became an open piggy bank. “Double billing and false time sheets…were widespread,” an observer wrote. “Money was diverted from life-saving equipment to buy office furniture and exotic research machinery. Doctors who were being paid to be in attendance refused to appear, leaving nurses to handle…delicate procedures.” A program expected to run “a few million dollars or so” wound up costing the Department of Hospitals one third of its $300 million annual budget, with no end in sight.
Then, out of the blue, a lifeline appeared.
—
On the eve of his landslide presidential victory over Republican Barry Goldwater, Lyndon Johnson was asked whether a health insurance bill for senior citizens would be a priority in his administration. “Just top of the list,” he replied. It seemed like typical campaign bluster, of which Johnson was a master, but in this case he meant exactly what he said. Health care for the poor and the elderly became a centerpiece of his Great Society. On July 30, 1965, Johnson signed the legislation that created Medicare and Medicaid, with former president Harry S. Truman, an early crusader for national health insurance, standing proudly at his side.
Medicare provided hospital and medical insurance for the disabled and those over sixty-five. Medicaid did the same for the poor, defined, most often, as those already on public assistance. The main objective was to allow these groups to receive health insurance without burning through what little income they had. Wilbur Cohen, the legislation’s chief architect, described it as “perhaps the biggest single governmental operation since D-Day in Europe during World War II.”
Initially, the American Medical Association warned against the bill, calling it “socialized medicine” and predicting the demise of the sacred doctor-patient relationship. “[We] cannot be restricted by decisions of untrained government employees on what services should and should not be performed in medical facilities,” their spokesman declared. But it didn’t take long for the AMA to come around. Medicare not only increased the number of patients seeking a doctor’s care, it also guaranteed a healthy profit; federal guidelines provided reimbursement for “reasonable costs,” which, as one student put it, “were whatever hospitals and physicians said they were.” Few government programs would prove as popular—or harder to control.
Medicaid had less appeal. For one thing, it smacked of charity care. For another, the eligibility requirements varied from state to state, with reimbursements to doctors and hospitals often smaller than those for Medicare. Many physicians kept their distance, leading to the growth of “Medicaid Mills” in the nation’s inner cities. The care, often provided by uncertified graduates of foreign medical schools, was seen as substandard and rife with fraud. Still, Medicaid touched millions of Americans who had rarely, if ever, been examined by a doctor.
If physicians were ambivalent about Medicaid, public hospital administrators were downright giddy. There’d be no more scraping and skimping, one of them predicted. “The chronic underfunding of municipal hospitals will come to an end.”
That seemed especially true in New York. It not only was the nation’s largest city, with a tremendous number of people on welfare, it also was among the most expensive places to live. For years, city officials had confronted the latter problem by offering free hospital care to the “medically indigent,” a term used to describe those who weren’t poor enough to be on relief, but who couldn’t easily pay an unexpected hospital or doctor’s bill. The city fully expected these people to be eligible for Medicaid, as defined by the state.
Initially, the legislature went along. Lawmakers agreed on a yearly income ceiling of $6,000 per family—the country’s highest eligibility cap, actually exceeding the median national family income. One didn’t have to be a welfare recipient to receive Medicaid in New York state, though that was the program’s intent. The result was predictable: a veritable stampede occurred. “New York City launched a blitz of radio announcements, subway ads, and news stories urging eligible [residents] to enroll,” one historian noted. “By 1967, more than two million people—about a quarter of the city population—had done so.” Before long, New York state, with 10 percent of the nation’s population, accounted for one third of the country’s Medicaid recipients.
Trouble came quickly. Bellevue officials had anticipated a possible drop in admissions as voluntary hospitals competed hard for Medicare and Medicaid patients. This wasn’t necessarily a bad thing, they assumed, because Bellevue would be handsomely reimbursed for those it did admit, and the city would soon have the money to build the patient tower that had been in the works for almost twenty years. What few foresaw, however, was the steepness of the patient decline in public hospitals, leaving their finances even shakier than before.
Worse still, the city found itself in the odd position of subsidizing this erosion because its share of Medicaid costs—split among Washington, the state, and the city—was about 25 percent. Which meant that each time a private hospital admitted a Medicaid patient, the city paid a large part of the bill. There was evidence, moreover, that some of these patients were being treated until their benefits ran out, and then transferred—or “dumped”—back into the public hospital system.
The patient shortage also affected the three medical schools serving Bellevue. How could they justify a continued presence when there were no longer enough cases to go around? Privately, Cornell and Columbia had been debating their commitment for years. Both were located some distance from Bellevue, while NYU sat right next door. Both had their own respected teaching hospita
ls to fall back on (New York Hospital and Presbyterian, respectively), while NYU had opened a hospital too small at this point to serve the needs of its students and trainees. By 1960, Columbia controlled fewer than 20 percent of the beds at Bellevue, with Cornell at barely 10 percent. For loyalists like Richards and Cournand, the shrinkage was alarming. “I have always been a Bellevue-Columbia man,” Cournand asserted, as if the two parts were inseparable. Now they could only watch, Richards wrote a friend, as NYU “chiseled in…to progressively absorb the Cornell and Columbia services.”
Both schools pulled up stakes in the fall of 1966, Columbia with greater regret. The crumbling facilities, the declining patient base, the city’s apparent indifference to Bellevue’s future—all made the decision a fait accompli. Cornell had been itching to get out for some time, held back, an official admitted, by the fear of being seen “in a bad light [for] abandoning its community responsibility.” Columbia had a longer history with Bellevue and would be leaving more behind. But departing so close together gave each a bit more protective cover.
“One of the great strengths of Bellevue,” a physician there noted, had been “the intramural competition [among] the three medical schools.” Those days were over. But the school that remained seemed to be the best fit for the hospital. NYU, wrote its distinguished dean and medical writer Lewis Thomas, “was largely and traditionally populated by students from New York City itself, many of them from relatively poor families, most Jewish, some first-generation Italians, a few Irish Catholics, a very few blacks—a different student body from those at Columbia and Cornell. The school had turned out in the past some spectacularly famous people…but its solidest reputation was for its production each year of intelligent, soundly trained, above all Bellevue trained, physicians who formed the backbone of medical practice in New York City and its immediate environs.”
—
Lurking in the background was an issue that Mayor Wagner had gingerly sidestepped during his three terms in office: the future of the city’s public hospitals. Were they worth saving? Were there better alternatives? Should the public hospitals be modernized or simply retired?
The early optimism surrounding Medicare and Medicaid had begun to fade. The programs had proved a godsend for millions of newly insured Americans as well as the doctors and hospitals they chose to visit. Unfortunately, Bellevue and the other “publics” were rarely part of this equation—not just in New York but across the country. Cities from Philadelphia to San Diego were closing their public hospitals and sending the patients to voluntary or state-run facilities. “What better solution,” wrote one cynic, “than to give the costly, troublesome, constantly complaining, unattractive, unloved brat to somebody else to rear?”
In 1965, New Yorkers elected a debonair political maverick named John Lindsay as mayor, the first Republican to hold office since Fiorello La Guardia, a man of similar liberal bent. Determined to fix the public hospital mess, Lindsay appointed a commission chaired by Gerard Piel, the publisher of Scientific American, to study the matter and find a solution. But the new mayor added a caveat: New York City’s public hospital system must be preserved. “The most important reason,” he said, “is that we have yet to come to the position where we can convince ourselves or anyone else that the private system, even if supported by Government money, would really look to the needs of the poor. It simply does not happen, and that is the danger.”
Meanwhile a competitor to the Piel Commission emerged in the form of a legislative investigation of the city’s hospitals chaired by Queens state senator Seymour Thaler. Described in press reports as a “leather-lunged loner…with an eye for the headlines,” Thaler didn’t disappoint. Barging into Bellevue for unannounced nocturnal visits, he compared it to “the worst slum building in New York City…a crumbling ruin that must be seen to be believed.”
Warming up with some preliminary hearings on waste and theft in the hospital affiliation contracts, Thaler moved on to the issue that interested him most—patient abuse in the city’s research hospitals, especially Bellevue. Showmanship aside, Thaler had been an early critic of unregulated human experimentation—an issue casually dismissed by many in this era as a needless obstacle to scientific progress. Having already proposed one bill to require the “informed written consent” of those participating in such studies, and another to get a court order before allowing minors to take part in experiments “not related to their illnesses,” he now accused Bellevue of turning indigent patients into “human guinea pigs.”
The examples, presented at a raucous press conference, were pure Thaler—some true, some false, most impossible to pin down. He claimed, among other things, that an NYU virologist, Saul Krugman, was feeding live hepatitis virus to severely handicapped children at the Willowbrook State School on Staten Island in order to test a vaccine—a charge, true on its face but lacking in context, that would reverberate for years. And he alleged that a thousand unnecessary liver biopsies had been performed on alcoholic patients at Bellevue without their consent, five of whom had died.
Clearly caught off guard, city hospital officials denied Thaler’s more damaging charge—the death of five patients—while conceding, almost matter-of-factly, that hundreds of “Bowery derelicts” had been biopsied at Bellevue without their knowledge for a “diagnostic study.” Though Thaler vowed to provide further details on the deaths, he never did. The closest he came was to insist that a “competent medical authority” had assured him that for every one thousand patients undergoing a liver biopsy, “four or five” would die. Surprisingly, Thaler made no mention of the human experiments that might have given him the banner headlines he craved—Lauretta Bender’s use of electric shock treatment on children in the hospital’s psychiatric wards.
Thaler’s career soon unraveled. On the eve of his election to the State Supreme Court in 1971, he was indicted for selling stolen U.S. treasury bills. Found guilty and sentenced to prison, he died of a heart attack shortly thereafter. Why Thaler chose Bellevue as his whipping boy, claiming it had consistently abused its patients, “most of them Negroes and Puerto Ricans,” is a mystery. Whatever the motive, his charges stained the hospital’s cherished narrative—care for the weak and the underserved—at a vulnerable moment in its history.
—
The Piel Commission took a more measured approach. The problem, its members understood, was that New York City’s generosity to the poor had created a dual hospital system: one public and failing; the other voluntary and thriving. Since both relied heavily on the same funding for their support, the commission recommended the creation of a “quasi-public” body to oversee the distribution of all government monies pouring into the city for hospital care. Ideally, a more equitable use of Medicare and Medicaid dollars would improve the public hospitals while making the “voluntaries” more accountable to the community.
The idea wasn’t new; Lewis Thomas had been floating a similar plan for several years. Most everyone agreed on two points, he wrote: first, the city had done a perfectly miserable job of running its hospital system because the bureaucracy was maddening and the civil service untouchable. Second, almost no one trusted the “voluntaries” to act responsibly on their own. The best solution, therefore, was a corporation independent from the bloated inertia of City Hall, on the one hand, and the selfishness of the well positioned, on the other.
It didn’t quite work out that way. In 1969, following months of intense lobbying, the New York state legislature created a “public benefit corporation” vaguely similar to the one proposed by the Piel Commission and Dr. Thomas. To pacify City Hall, the law gave the mayor’s office almost full control in choosing the corporation’s board of directors. To get the labor unions on board, it continued civil service protection for most hospital workers and kept all collective bargaining agreements in place. And to win over the private sector, it limited the corporation’s oversight of third-party payments—Medicare, Medicaid, Blue Cross—to the public system. In the end, the new body seemed litt
le more than a mildly streamlined version of the cumbersome Department of Hospitals it had replaced. The biggest plus was the city’s promise to spend an additional $175 million each year to help keep the failing “publics” afloat.
On a warm June evening in 1971, six people arrived at Bellevue’s emergency room with cuts and bruises sustained at an open forum on health care, held in the hospital’s auditorium. Civility at public events had become something of a rarity in the Vietnam era, and this one was no exception. Scattered throughout the overflow crowd that night were members of the Maoist Progressive Labor Party, neighborhood activists chanting “Hire More Workers, Lay Off the Bosses,” and radical young Bellevue physicians demanding a “general strike” to improve conditions. Fists flew as protesters battled for control of the microphones. The featured speakers never got a chance to discuss the current state of public hospitals or their plans for the future. Facing a steady barrage of insults and profanity, they simply gave up.
Thus ended one of the first public meetings of New York City’s star-crossed Health and Hospitals Corporation.
—
For the moment, though, the public system had survived. For all its weaknesses, HHC represented New York’s long-held belief that serving the medically indigent (generously defined) was a civic duty best left in public hands. Earning a degree of independence was a goal the corporation might not be able to achieve. But maintaining a medical safety net for the poor was priority number one, and high on that agenda, it turned out, was the construction of Bellevue’s twenty-five-story patient tower—a project decades overdue.
The decision reflected the tireless efforts begun by Dick Richards and his supporters. But the timing seemed odd given the large expense, the declining patient rolls, and the shaky economic times. The late 1960s had seen major cutbacks in Great Society programs, partly to finance the Vietnam War. To rein in Medicaid, Congress had lowered the contribution for “non-welfare patients,” and New York state had followed suit, reducing the family income cap from $6,000 to $5,000, which cut 700,000 people from the roles. Even more surprising, the ribbon-cutting for the “new” Bellevue in 1973 coincided with a national recession that hit New York City especially hard, many blaming City Hall for years of reckless spending on union contracts and social programs for the poor. When the White House rejected a bailout to prevent a disastrous default in 1976, the Daily News ran one of the most quoted headlines of the era: “FORD TO CITY: DROP DEAD.”
Bellevue Page 30