A rare moment to engineer opportunity from crisis has come to the health care system in New York. Between health care spending that exceeds any other state’s, a lagging economy and successive hospital closings, community health care groups and advocates are seizing what they see as an opportunity to reform health care delivery.

Key labor groups, though, are not so sure.

When North General Hospital (NGH), a 31-year-old Harlem community anchor, announced in June that it would be filing for Chapter 11 bankruptcy—two months after the Saint Vincent announcement—Gov. David Paterson’s office issued a joint statement with the hospital’s board, saying it had found a way to immediately restore the hospital’s primary care services.

Their solution was a “super urban” one, which NGH Board Chairman Calvin O. Butts calls “a model for health care in the 21st century” and a necessary response to the shuttering of several key hospitals.

“We, the hospital, the city and the mayor, and the state and the governor and our congressman, had to do this to demonstrate that we can provide a model, as New York often does, for health care,” said Butts, who is also the reverend at the Abyssinian Baptist Church in Harlem and a prominent player in city politics.

Four days after NGH shut its doors, the hospital’s former primary care facility reopened as a Federally Qualified Health Center (FQHC), operated by the Institute for Family Health, an umbrella FQHC with 24 other facilities throughout New York. The institute’s CEO, Dr. Neil Calman, said the former NGH clinic is an important addition to a growing network.

FQHCs are funded in part by federal grants. They offer primary and preventive care to communities in “medically underserved areas” and, in return for serving every patient who walks through the doors, including the uninsured, FQHCs receive better reimbursements for Medicare and Medicaid patients than other primary care facilities. New York currently has more than 70 FQHCs serving 1.3 million people.

NGH is not the only one to have taken notice of this. The Health and Hospitals Corporation of New York, under the mayor’s 2011 executive budget, is planning to convert six of its primary care facilities to FQHCs, to save the corporation $25 million annually.

Calman said a big problem with health care in New York is that there are too many beds, forcing the state to operate at “a very, very high cost maintaining hospitals that are not completely full.”

While Calman’s reasoning runs counter to concerns over the loss of emergency rooms from high-profile hospital closings, he said a shift in focus to preventive care would actually decrease the need for them.

The opportunities for FQHC proponents to prove the viability of their preventive model are only increasing, fueled in part by the Obama health care legislation, which will double the number of FQHCs nationally by 2015. New York is gearing up to keep pace with those mandates, according to CEO of the Community Health Care Association of New York Elizabeth Swain.

“The whole system is moving away from driving people into high-cost care,” she said. “Patients aren’t asking for it and insurers aren’t covering it.”

Not everyone is happy. Calman is already facing an unfair labor complaint filed by the SEIU 1199, which represents 900 of the former hospital’s employees. Sixty union members were employed at the NGH clinic, now repurposed as the IFH-run facility, but only seven of them were rehired by Calman, despite promises in earlier negotiations that he would rehire all of the clinic’s employees, according to Kevin Finnegan, the union’s political director. In total, the new FQHC facility will employ 90 to 100 people.

“What they did was illegal,” Finnegan said. “We were in negotiations for several months… We were led to believe they would all be rehired.”

Calman said the new center did its best to hire back NGH clinic employees, but that certain training was needed to operate within the FQHC health care model, which employees from other sites already had.

Many in the community felt that the rug was pulled out from underneath them, said Melissa Mark-Viverito, a former 1199 organizer who now represents the neighborhood on the Council.

On July 9, Mark-Viverito and several other local politicians rallied outside the hospital alongside several recently unemployed 1199 workers. They protested IFH’s conduct in demanding that 1199 members switch unions in order to be rehired.

Mark-Viverito and Finnegan said there has been no outreach from Calman to their respective offices on this issue since the facility reopened.

“It was not a good way to begin a relationship with the community,” Mark-Viverito said. “North General has an incredible history in this neighborhood, and the 1199 members have a history providing quality health care there.”

Butts said he is in a unique position to mediate the situation, as he has many members of 1199 in his congregation.

“There is pain,” he said. “I understand that. But when your back is up against the wall, the state was applying more pressure; because pressure was on it, as debt mounted, I think we did the best we could.”

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photo by Andrew Schwartz