Dialysis Deals


Bellevue and Jacobi hospitals are entering unprecedented licensing agreements with private dialysis companies that have reignited concern over the privatization of city hospitals. Under the deals, which were quietly approved by the Health and Hospitals Corporation this summer, the private companies will run for-profit centers for kid- ney patients alongside the city’s not-for-profit centers.

Jacobi’s arrangement with a dialysis provider named IHS of New York and Bellevue’s parallel deal with Island Rehabilitative Services, which was first reported in The Chief, break ground by engaging private companies to provide health care services. Previously, space-leasing deals within the city hospitals had been mostly limited to non-health-related vendors, such as parking lot management companies, coffee shops, and a few McDonald’s restaurants.

Critics contend that the decision to allow private companies to provide dialysis—a sometimes life-saving treatment for people with kidney damage—erodes the public system’s commitment to treating the poor without making a profit. “What’s really going on is a decision by the Giuliani administration to disinvest in public hospitals,” says Assemblymember Richard Gottfried. “It’s wrong to lease out an entire hospital,” adds Gottfried, referring to the mayor’s recent effort to unload Coney Island Hospital on a private company. “And it’s wrong to lease out the hospitals piecemeal.”

News of the deal has sparked fears for patient safety. “This private group has profit as the driving force,” says one Bellevue doctor who spoke on condition of anonymity. “It means the key factor is to make money, not necessarily to deliver the best care. If [business and health] interests collide, I have no question that the business people will do what’s best for business.”

Indeed, a recent study of more than 3000 patients reported that those at for-profit dialysis centers fared worse than those at not-for-profits. According to the study, published in the November 25 edition of The New England Journal of Medicine, 17.1 of every 100 patients in treatment at not-for-profit dialysis centers die each year, compared with 21.2 at for-profits. The researchers suggest that the for-profit centers’ reluctance to refer patients for transplants—and lose the income from their dialysis treatments—might be one explanation for the discrepancy.

The unusual arrangement also begs practical questions about how the public and private dialysis centers will coexist. “I am not at all sure ours will continue,” says another Bellevue staffer speaking on condition of anonymity.

Bellevue’s executive director, Carlos Perez, insists the hospital’s dialysis center will still treat patients with end-stage kidney disease after Island Rehabilitative Services begins providing dialysis within the next six months. Perez, who says the deal is “definitely not privatization,” says that, under it, Bellevue will only refer patients the hospital cannot accommodate in its own dialysis center to Island Rehabilitative Services. Leasing space to the company, says Perez, is a way of keeping these patients “in the Bellevue family.” Asked whether Island Rehabilitative Services will, like Bellevue, be required to treat all patients, including the rare patient who cannot get insurance coverage for dialysis, Perez says that it will, though he concedes this obligation is not in writing but rather “understood.”

While sources say Bellevue can accommodate all but a few patients per year in its own program, Jacobi Hospital currently provides only short-term dialysis to its patients, according to the hospital’s executive director Joseph Orlando. Most of the roughly 100 patients annually who require long-term treatment are now referred to Montefiore, a neighboring private hospital, which often ends up treating their other health problems. By having IHS provide long-term dialysis on-site, Orlando says he hopes to keep these patients within the public system.

Both Perez and Orlando say that Bellevue and Jacobi don’t have money to expand their dialysis programs to serve those now referred elsewhere. Yet IHS and Island Rehabilitative Service stand to make money from the new centers. (Neither company returned calls for this story.) In their new locations, the companies—which both operate other dialysis centers in the city—will be able to recoup some forms of reimbursement available only to in-hospital patients.

Further complicating matters, both dialysis centers are slated to move into spaces formerly occupied by methadone programs. Perez and Orlando insist there is no significance in the choice of these locations. “This is a real estate deal, pure and simple,” says Orlando.

Perez says he is considering leasing other space within Bellevue to businesses, though he declined to say whether they would provide health services. “I have real estate to rent and lease,” says Perez. “I have to play to my strengths.”