Rethinking Private-Public Partnership in the Health Care Sector: The

This is a preprint of an accepted article scheduled to appear in the Bulletin of the History of Medicine, vol. 93, no. 4 (Winter 2019). It has been copyedited but not paginated. Further edits are possible. Please check back for final article publication details. Rethinking Private-Public Partnership in the Health Care Sector: The Case of Municipal Hospital Affiliation MERLIN CHOWKWANYUN SUMMARY: By the late 1950s, New York City’s public hospital system—more extensive than any in the nation—was falling apart, with dilapidated buildings and personnel shortages. In response, Mayor Robert Wagner authorized an affiliation plan whereby the city paid private academic medical centers to oversee training programs, administrative tasks, and resource procurement. Affiliation sparked vigorous protest from critics, who saw it as both an incursion on the autonomy of community-oriented public hospitals and the steamrolling of private interests over public ones. In the wake of the New York City fiscal crisis of 1975, however, the viability of a purely public hospital system withered, given the new economic climate facing the city. In its place was a new institutional form: affiliation and the public-private provision of public health care. KEYWORDS: urban health, New York City, protest, hospitals, health services, health care, public health, public policy, private-public partnerships, academic medical centers 1 This is a preprint of an accepted article scheduled to appear in the Bulletin of the History of Medicine, vol. 93, no. 4 (Winter 2019). It has been copyedited but not paginated. Further edits are possible. Please check back for final article publication details. How much “private” should there be in a “public” good? This is a question that has loomed in health care, long before the term “public- private partnership” appeared on the public policy horizon. But it is a challenging one to answer at the outset, beginning with the ambiguity of the core terms of debate. Social welfare provision, after all, has persistently defied a clean demarcation between the “public” and the “private.” Health care was and is no exception. Indeed, it might well be the most prominent exemplar of the rule. Each day, for example, government dollars pour into public and private health care providers via reimbursement programs like Medicare and Medicaid. Academic research institutions, public and private, depend on billions of federal grant dollars.1 Nominally private social service agencies are heavily subsidized by governments, whether through direct grantsmanship or preferential tax treatment. And many private benefits to employees are mandated by public law. One could go on with examples. But each underscores how “private” and “public” are best viewed as poles on a continuum in classifying components of the American welfare state, with the private and 1 Recent documentations of flows of funds are The Budget and Economic Outlook: 2018 to 2028 (Washington, D.C.: Congressional Budget Office, 2018); Office of Management and Budget, Historical Tables (Washington, D.C.: Office of Management and Budget, 2018). 2 This is a preprint of an accepted article scheduled to appear in the Bulletin of the History of Medicine, vol. 93, no. 4 (Winter 2019). It has been copyedited but not paginated. Further edits are possible. Please check back for final article publication details. the public assuming relative proportions of responsibility depending on the case in question.2 This article explores these questions at the on-the-ground regional level using a less examined but highly consequential private-public fusion that has come to predominate the health care landscape: municipal hospital affiliation. By “affiliation,” I refer to the practice whereby the public pays private nonprofit institutions to help administer public facilities, provide staffing, share equipment, and make available other 2 The literature on the liminality of—and relationship between—public and private welfare states is vast and variegated, but excellent starting points are Michael B. Katz, In the Shadow of the Poorhouse: A Social History of Welfare in America (New York: Basic Books, 1986); Katz, Improving Poor People: The Welfare State, the “Underclass,” and Urban Schools as History (Princeton: Princeton University Press, 1997), chap. 1; Jacob S. Hacker, The Divided Welfare State: The Battle over Public and Private Social Benefits (New York: Cambridge University Press, 2002); Jennifer Klein, For All These Rights: Business, Labor, and the Shaping of America’s Public-Private Welfare State (Princeton, N.J.: Princeton University Press, 2003); and from a cross-national perspective, Melani Cammet and Lauren M. Maclean, eds., The Politics of Non-state Social Welfare (Ithaca, N.Y.: Cornell University Press, 2014). On the American health care sector specifically, see various essays on institutional flows of financing in Rosemary Stevens, ed., The Public-Private Health Care State: Essays on the History of American Health Policy (New Brunswick, N.J.: Transaction Press, 2007). 3 This is a preprint of an accepted article scheduled to appear in the Bulletin of the History of Medicine, vol. 93, no. 4 (Winter 2019). It has been copyedited but not paginated. Further edits are possible. Please check back for final article publication details. material resources for public hospitals.3 It is essentially a subcontracting arrangement between city governments and private institutions, typically academic medical centers. Affiliations existed throughout the twentieth century. But they had formed on a largely ad hoc basis, usually when a public hospital faced a crisis that required a private institution’s rescue—for example, the filling of a staffing deficit. It was not until New York City adopted a comprehensive set of affiliations in 1970s—as a sweeping and blanket policy covering almost all of its municipal hospitals—that the practice became less impromptu and more systematized, both in the city itself and elsewhere. Because of the New York City municipal hospital system’s unmatched scope—both then and now— it is the most effective site for examining affiliation’s genesis and the ramifications that arise out of it. What follows is the story of how the program came to be, the bitter battles that arose around its early implementation, and the vehement debate over alternative 3 A third class is the for-profit hospital, neither public nor private nonprofit (“voluntary”). I do not discuss these proprietary hospitals because they did not play a large role in the events described here; indeed, they have yet to fully exert the impact on the health care landscape that some predicted. When I use the term “private,” one can assume I am writing about private nonprofit hospitals. On terminology, see Rosemary Stevens, In Sickness and in Wealth: American Hospitals in the Twentieth Century (New York: Basic Books, 1989), 5–6; Sandra Opdycke, No One Was Turned Away: The Role of Public Hospitals in New York City since 1900 (New York: Oxford University Press, 1999), 9– 10. 4 This is a preprint of an accepted article scheduled to appear in the Bulletin of the History of Medicine, vol. 93, no. 4 (Winter 2019). It has been copyedited but not paginated. Further edits are possible. Please check back for final article publication details. models of health delivery from which it emerged victorious, an outcome hardly foreordained. In the end, the pro-affiliation and anti-affiliation tendencies were competing planning philosophies, together a critical fork in the road. In one vision, large private nonprofit medical centers would assume enormous control over the public system. In the other, the status quo ante, public hospitals would continue operating as neighborhood institutions with their own governing boards, not private administration from afar and from without. After a period of uncertainty about the policy’s survival, affiliation won out. I argue that it was ultimately larger political-economic shocks that made affiliation the most viable policy option by the late 1970s as the era saw new budgetary parameters forced onto almost all, especially city, governments. Hospital affiliation should be viewed as a major episode in an ongoing dialectic between society and institutional form. From its origins in the almshouse, the American hospital has continuously transformed, redefined by changing patient composition, the emergence of new technologies, the onset of financing streams, and expanding American social welfare provision. Focusing on the late nineteenth century and early twentieth, David Rosner and Charles Rosenberg have analyzed the transition of the hospital from an institution predominantly used by the urban poor to one with a broader clientele. Each identifies distinct catalysts for this transformation; Rosner emphasizes the working-class immigrant influx into cities and the strain this placed on charity institutions, necessitating 5 This is a preprint of an accepted article scheduled to appear in the Bulletin of the History of Medicine, vol. 93, no. 4 (Winter 2019). It has been copyedited but not paginated. Further edits are possible. Please check back for final article publication details. a search for paying patients.4 Rosenberg, meanwhile, examines the rising cultural esteem toward the hospital and its destigmatization, as patients of higher social echelons increasingly used hospital services outside of the home. Joel Howell, writing on this time period as well, points to the uptake of new diagnostic technologies that coincided with

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