Note: This article was published in the Back Bay Courant, May 14, 1996.

Drive through Toledo, Ohio, and you see a billboard for Mercy Hospital: "Every Room a Private Room!" it brags. Sounds wonderful. But the circumstances that have made such generosity possible are not Mercy's average census is now well below 50 percent. Private rooms are available simply because there are not enough patients to fill the hospital.

As goes Toledo, so goes Boston. The nationwide collapse of hospitals poses innumerable challenges, one of which now confronts our city: What should we do with Boston City Hospital?

Next year Boston will pay $12 million to subsidize BCH. Within five years, that amount will jump to $40 million annually. After that the losses will worsen further. The drain on city resources will force cuts in basic services, affecting all neighborhoods, including Back Bay. The solution proposed by the Mayor is to merge city-owned BCH with Boston University Medical Center. Approval of the merger is now before the City Council. The merger raises a host of important public policy issues: Should cities be in the business of owning hospitals? How should cities provide for the health of their most vulnerable citizens? What obligation does government have to employees, patients, and taxpayers in adapting to changing circumstances?

Legendary mayor James Michael Curley created Boston City Hospital as a physical sign of his commitment to the poorest of the poor. The hospital, funded out of city revenues when necessary, provided free health care to all. Over the years the physical plant may have deteriorated and sometimes the conditions of care weren't terrific, but City Hospital had one big advantage over the numerous other hospitals in Boston: it cared for everyone. Poor, homeless, alcoholic, or immigrant--it didn't matter.

Curley built City Hospital at a time when hospitals were the center of the nation's health care system. It was a time when Medicare and Medicaid didn't exist. Those who didn't have private insurance had to rely upon charity. And private insurance itself relied upon a system of cost reimbursement: insurers paid whatever hospitals and doctors charged.

But since Curley's day, profound changes have rocked health care:

The old cost-reimbursement system has given way to managed-care reimbursement. Insurance companies no longer pay for a procedure. Instead, they pay for results. In consequence, hospitals and doctors are being forced to modify the way they deliver care. They no longer make money by charging the most they can. Instead, they make money by being more efficient.

Technology has changed. For example, it used to be that a cataract operation required a prolonged stay in a hospital. Today, it's a one-day procedure that can be handled outside of a hospital.

Treatment models have changed. New methods of care have arisen that challenge the primacy of hospitals. For example, ambulatory care centers now do what emergency centers (the most profitable area of a hospital) once did. Nursing homes increasingly focus on skilled and subacute care, handling patients that once were filling hospital beds. The result is that census at hospitals has dropped dramatically. Most hospitals find themselves with more empty beds than full. The average patient stay is shorter and the revenue received for each patient-day is less. Hospitals have responded by cutting staff and frills, they have modified their treatment regimens, and they have begun to consolidate, seeking to develop a more secure financial base with a steadier supply of patients.

And in this maelstrom is Boston City Hospital. Like all hospitals, BCH now finds itself in a desperate fight to remain alive. Its census is declining and it needs to trim its costs aggressively. But even more, its fundamental raison d'être is in doubt. Medicare and Medicaid now pay for health care at any hospital, not just BCH. Patients that were only welcome at BCH are now being wooed by other hospitals. Now before the City Council is a proposal for a full-blown merger of BCH and BU to create a new entity, the Boston Medical Center. Should it happen? That is the subject of next issue's article.