By Alan L. Otten
June 1999
(To see a complete list of Milbank reports, click here.)
This report describes preparations in the health sector of the New York–New Jersey–Connecticut metropolitan region to address disruptions that could result from the failure of some computers and embedded chips to recognize the transition in dates from December 31, 1999, to January 1, 2000, usually called the Y2K event. The report contributes to the work of a task force of civic leaders convened by the Regional Plan Association to gather and disseminate information about how public, private, and nonprofit organizations are preparing for this challenge.
The task force is inquiring into preparations for the Y2K event in organizations that provide and regulate essential services, especially power, communications, transportation, water and waste disposal, and health services. Organizations in each of these sectors are struggling with the same central issues as they prepare for the Y2K challenge:
This report is based on interviews with executives in organizations that provide and regulate health services in the tristate region and with experts on the Y2K issue here and across the country. The author, Alan L. Otten, a staff writer for the Milbank Memorial Fund, was formerly a reporter, bureau chief, and columnist for The Wall Street Journal.
- Interdependence: A Y2K problem in one sector––power or transportation, for example––will have consequences for every other sector.
- Planning for contingencies: Leaders describe considerable progress in planning but also acknowledge that uncertainties persist.
- Stockpiling: Leaders are eager to define and implement a consensus about prudent purchasing and to discourage excessive buying that could create shortages.
- Controversy about embedded chips : Evidence from careful tests of chips for Y2K problems must compete for attention with alarmist anecdotes and conjectures.
- Communication: Reporting in the media about the risks of the Y2K event and preparations to address them have often been incomplete and unbalanced.
Otten concludes that although "considerably more work remains to be done" to prepare the health sector for the Y2K event, "considerably more has already been done [than] early warnings might have led one to expect." Members of the task force asked Otten what he would recommend as a result of reporting this story. "This kind of reporting ought to be done by media in every community," he replied. The task force hopes that accurate and fair reporting about Y2K-preparedness in every sector will increase in the remaining months of 1999.
Members of the task force and its staff are listed on the following page. Susan Waltman, Senior Vice President and General Counsel of the Greater New York Hospital Association, a leader in Y2K-preparedness in the health sector, helped Otten obtain access to key sources. On behalf of the Nathan Cummings Foundation, Charles Halpern, its president, helped to establish the task force and provided partial support for its reports on transportation and water and waste disposal.
Brendan J. Dugan
Task Force Co-Chair
President and Chief Operating Officer
European American BankBishop Joseph M. Sullivan
Task Force Co-Chair
Executive Vice President
Board of Directors
Catholic Charities of the
Diocese of BrooklynDaniel M. Fox
President
Milbank Memorial FundH. Claude Shostal
President
Regional Plan Association
Regional Plan Association Y2K Task Force
Brendan J. Dugan
Task Force Co-Chair
President and Chief Operating Officer
European American BankJoseph M. Sullivan
Task Force Co-Chair
Executive Vice President
Board of Directors
Catholic Charities of the Diocese of
BrooklynStanley Brezenoff
President
Maimonides Medical CenterJames R. Devlin
Vice President and Director
Year 2000 Enterprise Project
CiticorpSally Faith Dorfman
Director
Division of Public Health and Education
The Medical Society of the State of New YorkJerry Fitzgerald English
Partner
Cooper, Rose & EnglishDaniel M. Fox
President
Milbank Memorial FundSara Garretson
Executive Director
Industrial Technology Assistance
Corporation (ITAC)Gabrielle E. Greene
Managing Director
BE/Greenwich Street CapitalCharles R. Halpern
President
Nathan Cummings FoundationBilly Jones
Senior Vice President and Medical Director
Magellan Public SolutionsJoseph J. McGee
Vice President, Public Policy and Programs
SACIAH. Claude Shostal
President
Regional Plan AssociationRichard M. Siegel
Vice President, Technology Operations
KeySpan EnergyPeter Swords
Executive Director
Nonprofit Coordinating CommitteeSusan C. Waltman
Senior Vice President and General Counsel
Greater New York Hospital AssociationArthur Webb
Chief Executive Officer
Village Center for CareTask Force Staff
Aram Khachadurian
Vice President for Program Development
Regional Plan AssociationChristian Michel
Y2K Project AssistantThe Health Sector and Y2K
For many months, the White House, congressional committees, and various private consulting groups have been proclaiming that the health care industry lags far behind other sectors of the economy in preparing to deal with the "Y2K bug"––the all-purpose label for the myriad problems and disruptions that might arise from the inability of some computer systems, software programs, and embedded microchips to recognize and accurately process dates occurring after December 31, 1999. Alerted by these and other reports, a task force of community, health sector, and business leaders convened by the Regional Plan Association set out to discover just how well the health care industry in the metropolitan New York area is facing up to this critical challenge.
This report is based on many scores of phone calls over a period of weeks, during March, April, and early May, made by a veteran reporter to executives, information system specialists, and other officials at hospitals, nursing homes, doctors' offices, laboratories, clinics, home health care agencies, health plans, insurers, pharmacies, and other health organizations in the New York–New Jersey–Connecticut area. In addition, numerous manufacturers and distributors of pharmaceuticals and other medical and surgical supplies were contacted, as were manufacturers of durable medical equipment, health industry consulting firms, and federal, state, and local officials who deal with the health care industry as payers and/or regulators.
The conclusion of the report is that although considerably more work remains to be done before the tristate area can begin to settle back and relax about its level of Y2K preparedness, considerably more has already been accomplished than earlier warnings might have led us to expect.
To be sure, many physicians and other small health care providers have waited too long to get started or are moving too slowly now. Indeed, the problem is so huge that even organizations that are aggressively tackling the Y2K problem cannot positively say they have spotted all the possible trouble points. Many institutions, especially smaller ones, worry that Medicare, Medicaid, and other payers will not be able to keep their payments flowing smoothly. All worry about how well and how long they can hold out in the event of a lengthy disruption in power, water, phones, and delivery of supplies.
But––and this is a very big "but"––by far the greatest part of the regional health system has been working long and hard to overcome the Y2K bug, and it is continuing to do so. Moreover, the pace of activity is gathering speed as the months slide by. In fact, a problem that arises in assessing Y2K preparations––in this and other reports––reflects a remark made by the President's Council on the Year 2000 Conversion on several occasions: "Circumstances are changing at such a rate that information becomes outdated almost as soon as it is collected."
Every effort was made to interview a broad and representative sample for this report. In all, more than 150 people dealing with health problems in the tristate area were contacted. Not everyone was willing to answer questions. For example, lawyers at hospitals and other health organizations, concerned about possible liability suits should anything go wrong as a result of failure to prepare for Y2K properly, have been advising their clients not to discuss any remedial work that is under way, and this legal caution was obviously being heeded. About one in ten of the people contacted either declined to answer or responded in glittering generalities. There is no reason to believe that the institutions whose officials declined to answer are in fact less actively preparing for Y2K than those who did respond, but it certainly is a possibility to consider. Finally, there is the chance that many who answered questions freely are overestimating the extent and pace of their preparations and progress. Still, the number of people who answered openly and provided convincing corroborative detail was impressive enough to support the conclusion that, as of May 15, 1999, Y2K preparations were well along at major health care organizations in the greater New York area.
Is the Health Sector Lagging?
Health experts suggest a number of reasons why the health care industry nationally may have long lagged behind other sectors in Y2K planning. Health care is an extremely fragmented industry––so many thousands of physicians, hospitals, nursing homes, equipment manufacturers, and more––with a historic lack of cooperation among its many segments. The large number of mergers and consolidations over the past decade may have displaced attention to other areas of organizational integration. Managed care controls and cutbacks in reimbursement rates limited the funds available for the equipment overhaul that Y2K preparedness requires. Top managers have often been more attentive to patient care and research than to information systems. State health officials have tended to concentrate on more immediate crises and put off attending to one that is waiting down the road; they have refrained from pushing and prodding health providers to move ahead with Y2K work. Some national and state medical associations have been preoccupied with what they considered more pressing problems, like Medicare reimbursement formulas, the "patient's bill of rights," and other proposals pending in Washington and state capitals.
If, indeed, these and other factors kept the health industry nationally from focusing early and vigorously on the approaching Y2K crisis, they do not appear to have prevented large portions of the New York area health industry from moving ahead. For well over a year, local health industry groups, like the Greater New York Hospital Association, and local medical schools have been busily holding seminars and briefings and distributing Y2K checklists and manuals. Health care providers have been attending these and other briefings by industry and government officials and consulting the immense amount of Y2K help that government agencies, equipment manufacturers, insurers, and others have posted on the Internet.
For many months most providers have been assessing their own readiness, hiring consultants, questioning manufacturers and other suppliers, and upgrading or replacing everything from billing systems and biomedical devices to elevators and alarm systems. They have begun drafting contingency plans and arranging for backup suppliers. Both top executives and key technicians plan to be at their desks and workspaces on New Year's Eve and to remain there for many hours or days of the new year.
What Two Large Health Care Organizations Are Doing
Consider the example of the Mount Sinai–New York University (NYU) Medical Center and Health System. As early as 1996, it was sending key people to conferences on Y2K to learn more about it and find out what needed to be done; in early 1997 the medical complex organized five teams to work on different aspects of the problem. The teams made an exhaustive inventory of all items that conceivably could have a Y2K date-recognition problem, ranging from information systems to biomedical devices and building facilities, and then assigned each item to one of five categories: critical for patient care; critical for business purposes; necessary for patient care; important but with readily available backup; and convenient. (A fax might be convenient to have, but a messenger or the mail could be used if necessary.) Mt. Sinai–NYU then used both its own information technology specialists and outside consultants to check all computers and software programs; those that were not Y2K-compliant were upgraded or replaced.
The Center asked manufacturers for the Y2K compliance status of all biomedical devices––cardiac monitors, infusion pumps, defibrillators, ultrasound machines, ventilators, anesthesia machines, among others––and requested patches and upgrades to be supplied where necessary. Even with assurances from the manufacturers, system technologists have begun testing all items i n the two "critical" groups; there are also plans to test most of those in the "necessary" group and some in the "important" group. All testing is scheduled for completion by midsummer.
Now Mt. Sinai–NYU has started integrated testing––ensuring that each critical or necessary unit and system is able to connect and work with all the others. This process is due for completion by September 30. At the beginning of May, Mt. Sinai–NYU reviewed the information it had been gathering for months and began to make decisions on its Y2K contingency plan. The plan takes as its starting point the system's existing state-required emergency plan and expands upon it by adding features adapted from several detailed contingency plans posted on the Internet by the Department of Veterans Affairs (VA), IBM, the American Hospital Association (AHA), and other groups. Mt. Sinai–NYU expects to finish the entire plan by September 30 and will then stage practice drills during the final three months of the year. Nurses and other personnel will receive extra training on various "work-around" possibilities: how to perform by hand, for example, critical tasks that are presently done by biomedical devices. Key people have been warned not to make any early January vacation plans that cannot easily be canceled.
Reports from many other health care organizations follow a similar pattern. Officials of the New York Presbyterian Hospital system began discussing their Y2K problems in 1995 and started putting money and manpower into preparations in mid-1996, which enabled them to build a Y2K team of 70 staff technicians and consultants. Throughout 1996, 1997, and 1998 the hospital's specialists were identifying the items that might be date-dependent and contacting manufacturers for statements about the Y2K compliance status of their products and the availability of upgrades. Noncompliant items that could not be upgraded were replaced. The specialists decided that the manufacturer's word would be accepted on items of little impact on patient care or hospital revenues and on a few products that were too complex to test: a CAT scanner, for instance. However, technicians have been testing all other items whose malfunctioning could significantly impair patient care or result in a revenue loss of over $100,000. September 30 is the target date for completion of all testing, including the integration of different units and systems. Contingency planning, now under way, includes making a detailed survey of major suppliers to determine whether backup suppliers need to be lined up for late December and early January.
Other Health Systems Also Are Busy
In Paterson, New Jersey, St. Joseph's Hospital and Medical Center has been working on Y2K since January 1998. It has upgraded or replaced all computers and upgraded its core information system and all auxiliary systems. Even before its Y2K review began, it had installed a new generator system that is capable of supplying power for at least a week. The Center has contacted suppliers of all biomedical equipment and is now testing all equipment for which the manufacturer has not submitted a strong Y2K-ready assurance. Several defibrillators and some laboratory equipment have been replaced. Now the Center is beginning to plan for contingencies.
Elsewhere in northern New Jersey, a major diagnostics laboratory has upgraded and tested its basic information systems. It is currently checking and testing every lab instrument that might have a Y2K problem and is working closely with its customers to ensure that their systems will be able to receive test results electronically.
The Jewish Home and Hospital, a long term, subacute care system, started to overhaul its system in preparation for Y2K early in 1997. With the aid of outside consultants, those assigned to the task identified the parts of its information systems that were not Y2K-compliant and upgraded or replaced deficient computers and software. The organization has begun testing interconnections among all critical systems, defined as those that would interrupt patient care or the flow of money into the organization. A second consulting firm helped check all biomedical equipment and structural facilities with potential date problems, and the system administrators were relieved to find that the facility's long-term-care function meant it had far fewer embedded chip devices to worry about than they had once feared. The items that needed a Y2K fix are being upgraded or replaced, and the system's contingency plan is being formulated.
The progress reports continue. Yale–New Haven Hospital and the Yale–New Haven Health System, as well as two allied hospitals and various allied health agencies, have conducted similar surveys and assessments of their equipment. Computers and computer systems were either upgraded or replaced and have now been tested. All biomedical equipment was divided into three levels of risk, which in turn were further divided as follows: items that had no date-sensitive function and therefore did not need testing; items that were physically capable of being tested (which were then tested); and items rated as too complex for ready testing that instead required detailed documentation and test results from the manufacturer before they could be used. An outside consulting firm is helping the hospital to draft floor-by-floor contingency plans, which are nearly completed. Officials of the Yale System have met several times with local authorities to discuss various subjects, including the possibility of using the schools for less seriously ill patients if the hospitals become overburdened with more serious cases. In December, Yale plans a final review of all earlier decisions.
The North Shore–Long Island Jewish (LIJ) Health System, comprising 13 hospitals and allied long-term-care facilities, has been working intensively on Y2K preparations since May 1998. The organization has upgraded its software systems, upgraded or replaced its computers, and extensively tested all these systems and its building facilities. It has contacted the vendors of its biomedical equipment and, with the aid of consultants, will test critical devices when their manufacturers' assurances do not satisfy the hospital Y2K team. It is currently testing the connections among all systems and is beginning to prepare a department-by-department contingency plan. Questionnaires on their Y2K readiness are being sent to all firms that provide pharmaceuticals, food, medical and surgical supplies, and other critical items, and North Shore–LIJ plans to commission backup suppliers for vendors whose answers do not satisfy hospital officials.
Public Hospitals Are Hard at Work
The many warnings emanating from Washington and elsewhere have expressed extra concern that inner-city public hospitals, pinched for money, might particularly lag in Y2K preparations. Yet, one of the most aggressive local Y2K programs has been under way at the New York City Health and Hospitals Corporation, with its eleven acute-care, inner-city hospitals, six diagnostic and treatment centers, five long-term-care facilities, seventy community-based clinics, and six home health agencies. The Corporation has been working on the Y2K problem since March 1997, budgeting about $80 million for that purpose. Replacing or upgrading business and revenue information systems, which includes testing each system, is already 99 percent complete, and the clinical information systems are almost up to par as well. With the aid of a specialized medical testing firm, the Corporation has been testing all pieces of biomedical equipment, even those with a manufacturer's assurance of compliance. July 31 is the target date for completing these preparations, which include testing all interfaces. The Corporation has ordered extra generators and has been planning a gradual increase to a thirty-day inventory of most supplies from the current level of anywhere between three and seven days. Contingency plans have been drawn up for each facility, and these are being reworked and refined. June 30 was set as the deadline for completion. Key people have been warned not to schedule vacations during the first week of January.
Other Organizations Are Catching Up
Generally speaking, the phone inquiries uncovered the fact that larger organizations tend to be further along in their Y2K preparations and readiness than smaller ones: larger hospitals have advanced further than smaller hospitals, large nursing homes are readier than smaller homes, and group practices have outpaced one-doctor offices.
Yet many medium-sized and small organizations have been working on Y2K as well. The 600-bed Jersey City Medical Center admittedly started late, but its officials claim it has been working hard to catch up. Because of its late start, the Center has taken the easier route of replacing noncompliant computers rather than trying to upgrade them. It has, however, upgraded and tested its software systems and tested its building systems, which, except for some voice systems, were found to be compliant. The administration has hired a consultant to determine which items of biomedical equipment can be upgraded and which ones must be replaced. Those overseeing the Y2K plan calculate that the backup power of its generator will suffice for four days, and they plan to have at least one water truck standing by on December 31. The Center is now contacting all food, pharmaceutical, and other suppliers to get assurances that they will be able to keep supplies flowing; it plans to arrange for alternative suppliers when current providers seem less than completely reliable.
Here are other examples of efforts of smaller organizations. A small community health center in Manhattan says it has been working on Y2K for about a year, upgrading its computers and computer software, contacting vendors of equipment and other suppliers for assurances of Y2K readiness and making contingency plans. A home care agency for the elderly on Long Island has upgraded its computerized billing and record-keeping systems and hired an outside consultant to double-check the result. The 60-bed Notre Dame Convalescent Center in Norwalk, Connecticut, has overhauled its information system, replacing or upgrading both hardware and software as necessary; it has also upgraded the phone system and checked its backup generators, fire alarm systems, and heating and air-conditioning systems. The results have been tested and certified as Y2K-ready by an outside consultant.
Similarly, the head of the New York City Pharmacists Society says most of his members have made their computer systems Y2K-compliant and ready to interface with wholesalers, drug plans, and other business partners; "pharmacies are very sophisticated users of electronics," notes a Connecticut state health official.
Smaller organizations also benefit because, as Y2K specialists report, equipment manufacturers recently have become far more cooperative. Early on, many refused to commit themselves, or even to answer queries about the condition of their biomedical devices or other equipment. More recently, however––perhaps partly owing to vigorous prodding from the White House and congressional committees––they have become more forthcoming. Many manufacturers are now posting helpful reports on the Internet; the Web site of the Food and Drug Administration (FDA) constantly updates reports on specific equipment, and the VA extensively documents on its Web site the many hundreds of items that it has tested. The Connecticut Hospital Association has created a clearinghouse that collects manufacturers' reports on different devices, and other health providers can subscribe to this service. "Initially we had some difficulty getting information from the manufacturers," says the Association's Sheila Robida. "Over the last few months, though, there's been much more of a free flow. They are now providing a great deal of information."
The Cost of Preparation
Most organizations are either unable or reluctant to reveal how much they are spending to prepare for Y2K. The AHA has estimated that hospitals nationally will be spending an extra $8.2 billion in Y2K preparations. Many local hospital and other Y2K workers say, however, that it is hard to produce an accurate figure because the money is gradually coming out of two or three years of budgeting, rather than just one year. In addition, they say, allowance must be made for money that might have been spent in any case to replace ancient computers, decrepit alarm systems, or other outdated equipment.
In assessing potential Y2K costs, the technicians emphasize, it is also necessary to recognize that much medical equipment has no Y2K problem at all. Many devices with embedded microchips have no date-dependent function: they may measure the time elapsed between start and finish of a particular task, for example, but they can do this just as well on January 1, 2000, as on December 31, 1999. Other machines, like EKG or X-ray machines, may work fine except for an inability to print the right date; in such cases, a nurse or secretary can correct the date by hand on the X-ray film or EKG printout. "We can live with that," says the Y2K team leader at a large Brooklyn hospital.
When it comes to contingency plans, state laws already require hospitals, nursing homes, and many other health care providers to have some form of disaster plan in place at all times: backup power, extra water supplies, the capacity to prepare meals without power, and similar emergency measures.
Physicians' Offices Are Trailing
If any one segment of the health system is trailing, most consultants and other health industry observers agree, it is the physician's office. Large group practices appear to be working steadily on the problem; a technician servicing a mid-Manhattan practice of 28 physicians reports that its computer systems have all been made Y2K-compliant and the group has received vendor confirmation on the Y2K readiness of its X-ray and other devices. The group has decided to save the cost of a new EKG machine and use its present one, which, other than printing year 2000 dates as year 00 dates, works fine.
It's the smaller offices that worry hospital officials and other health observers. When a Manhattan medical center made a blanket offer to help its staff of 4,000 physicians prepare their offices for Y2K, only 60 doctors accepted. St. Francis Hospital in Hartford extended a similar offer of help to any physician in the surrounding area and received zero calls. The official of a firm that services computers in all segments of the health industry says, "It's very hard to sell doctors on a Y2K program. They say if something is wrong, they'll find out in January and fix it then."
Although such an attitude may be shortsighted, many experts argue that it actually does not present a serious health care problem because the level of risk to patients in a physician's office is so much less than what they would face in a hospital or nursing home. These offices generally do not have critical life-supporting devices, and a great many offices still do their record keeping and billing by hand. One federal government official states: "If a doctor's office has a Y2K problem, it's probably a billing problem, and no one ever died from a billing problem. A Y2K problem is not going to result in anyone's death or put the doctor out of business." Appointments can be made and records kept the old-fashioned way, and, the argument goes, the worst eventuality for practitioners whose offices are not Y2K-compliant is that they will not be paid for a few weeks while they wait for technical help to update their computer systems. In any case, many practitioners rely on outside billing services and processing agencies that almost certainly are Y2K-compliant, and these agencies are already transforming six-digit bills into eight-digit bills before forwarding them to Medicare and other payers.
Who Should Test Biomedical Equipment?
Whether they are working hard on Y2K preparations or adopting a dangerously relaxed attitude, most segments of the health care industry agree about the goals. On two major issues, however, there is considerable disagreement.
The first is the question of which biomedical equipment needs to be tested by the user. If the manufacturer of a biomedical device with an embedded microchip guarantees that it is Y2K- compliant, does the hospital, nursing home, or other user still need to test it? The FDA, the VA, ECRI (the major nonprofit organization that consults on medical devices), and many other groups answer with a slightly qualified "no." Health care providers should carry out their own tests if they cannot obtain information from the manufacturer of a piece of equipment or if they are not satisfied with the quality or specificity of the manufacturer's answer; they also should test if they have made some change in the device or if it interfaces with other devices and systems. Otherwise, these groups maintain, users should rely on the manufacturer's word and not consider testing the equipment themselves. Testing an embedded chip is such a complex business, they argue, that a test by anyone other than the manufacturer may do more harm than good (as well as freeing the manufacturer from any possible liability). In the opinion of one experienced consultant, "Manufacturers know their devices a lot better than any hospital or nursing home. Some of those testing protocols are 25 or 30 or even 60 pages long. If you can't get certification from the manufacturer, do a simple user test."
Many users, however, express an equally strong belief that they cannot just accept the manufacturer's word about a device involving a patient's health or life: they must test again themselves. Some consultants and technicians urge testing of all mission-critical items: not only devices that maintain life or have a significant impact on patient health but also billing and payroll systems. Further, despite the F DA and VA positions, one government official believes users cannot rely on the manufacturer's word because sometimes that word is not the last word. "I go to one hospital and they say, product A is working but not product B," he relates. "And then the next hospital says the exact opposite." A lot may depend on the particular technician who installed the equipment, and thus this official suggests that the only safe course is to test again.
Recently the federal government announced that the FDA would intensify its review of the Y2K status of all potentially high-risk biomedical devices, completing its review by October 1 and publicizing its findings then. The FDA promised to use all its statutory authority to require corrections, and this could include mandatory recalls or seizure of noncompliant devices "in extreme risk situations."
Stockpiling
The other important topic on which opinions differ is whether individual health care institutions should stockpile extra pharmaceutical and other supplies just in case the flow of supplies is seriously disrupted in early January. The last six weeks of the year is always a time of low wholesale inventories because many manufacturers begin cutting back production in mid-October. Most producer groups, industry associations (including the Greater New York Hospital Association), and many individual health care providers are concerned that even a modest amount of extra ordering of certain items might touch off panic buying and result in shortages that could disrupt and damage health care. The AHA has repeatedly appealed to "everyone in the supply chain to act professionally and responsibly . . . by not overbuying" and has assured its members that "the supply chain will indeed be able to meet normal supply requirements during the change to the year 2000––provided that all purchasers stay within customary buying patterns. It is certain that stockpiling and hoarding will cause the very shortages that hospitals are trying to avoid." Many institutions are adopting the "responsible" position that they will not stockpile, and others say they will not stockpile for more pragmatic reasons: they lack the money to pay for extra supplies or the space to keep more than a normal inventory. A few hospitals are taking the precaution of entering into compacts with other nearby hospitals to borrow supplies should the need arise.
However, several health care providers, both large and small, refuse to rule out stockpiling and simply say they will put off any decision until late summer or fall in order to view the shape of industry trends at that time. At least a few others, often under pressure from legal advisers or executive boards to protect their institutions from legal liability should lack of supplies interfere with proper medical care, frankly say they intend to do some extra ordering. One hospital network that usually keeps a two- to three-day supply of certain medical and surgical supplies is considering working its way gradually up to a seven- to ten-day supply. Administrators at Memorial Sloan-Kettering Cancer Center report that some time ago the hospital leased a large warehouse in the Bronx to store the overflow of supplies from its Manhattan base, and they are debating whether to allocate part of that warehouse for storage of a modest buildup of supplies for Y2K. Officials of two major health care institutions say they have already heard reports of anticipatory buying.
Pharmaceutical manufacturers insist that current warehouse supplies and present production schedules will maintain a 30- to 90-day supply of all items right on through the early months of 2000, so long as stockpiling stays within modest bounds. They also insist that their ability to increase production late in the year is limited in any case because production schedules are planned nine to twelve months in advance and are heavily dependent on raw materials, many of which are supplied by an uncertain overseas market. This would suggest that any large surge in buying in the coming months, either by institutions or individuals, would indeed strain supplies. Several large wholesalers are said to be considering an informal rationing system or price increases to discourage hoarding; one of the largest says it will start monitoring orders during the summer and will demand reasons from anyone whose orders rise above normal. Many producers and wholesalers would like to get together and agree on a system to guard against excess ordering by consumers, but they fear that any meeting or communication along these lines might make them liable for government or private antitrust suits.
Federal officials have become more concerned about the possibility of supply shortages or price increases if excessive stockpiling occurs in the coming months. In mid-May, White House Y2K specialists met with pharmaceutical manufacturers and wholesalers and other segments of the health industry to assess the supply outlook; after the meeting, the White House announced it would set up a widely based working group to draft proposals for assuring adequate supplies during the coming months and for reassuring both health care providers and the general public that extra buying is not necessary.
The Pace of Preparation
The first section of this report painted a fairly upbeat picture, which many will consider overly optimistic or naive. To reiterate an earlier observation, the people who did not want to answer queries may have refused because they are doing little and do not want their lack of preparation to be on record. Another sobering possibility is that, in some cases, the actual progress of an organization may not match its projections.
Certainly there are bound to be health care organizations that, like the physicians' offices discussed above, are moving far too slowly. Even if they begin to address the problem relatively soon, there may not be enough time––or computer consultants––to make it right. A representative of one community health center made the assurance on the phone in late April that it would start checking out its computers "in a month or six weeks." A small hospital on Long Island said it was just about to send out an invitation for consultants to bid on a contract to check its computer systems and biomedical equipment; another, in Queens, admitted, "We really haven't done very much yet."
Flushing Hospital Medical Center, which is in bankruptcy, just began intensive Y2K preparations in mid-May; officials in charge of Y2K work there insist they will be up to the mark by year's end but concede, "It will be close." A community health center in Westchester says it has been searching for "four or five months" for money to update its computer system and laboratory. The administrator of a small long-term-care facility in northern New Jersey admits, "We are just getting started." She feels confident, however, that everything will be fixed by December 31.
State health departments in all three states––New York, New Jersey, and Connecticut––have been surprisingly slow in seeking detailed progress reports from health care providers on their Y2K preparations; certainly nothing resembling an official state assessment is available. More important, perhaps, even where organizations are moving intelligently and aggressively to tackle the Y2K bug, so many things can still go wrong. There are countless microchips, switches, and other hard-to-find items throughout every hospital, laboratory, and office. Failure to make every one of them Y2K-compliant might not only keep a particular piece of equipment from functioning but could also, in a worst case scenario, bring an entire system to a crashing halt. These chips are not only in information systems and biomedical devices; they also pervade elevators, heating and air conditioning systems, security systems, and other locations.
New York Presbyterian Hospital, with its network of affiliates––the hospitals that serve the medical schools of Columbia and Cornell Universities and 13 allied hospitals, nursing homes, and other health care facilities––tallied some 350 computer systems, ranging from payroll and billing to nurses' schedules and patient location; 55,000 medical devices, from ventilators to electric bed raisers; and 850 facility systems, from heating and air-conditioning systems to baby theft alarms. An official of another New York City hospital network estimates that there were 22,000 pieces of equipment to be checked. A representative of the Catholic Medical Center of Brooklyn and Queens calculates that 8,600 items in its system needed to be checked; North Shore–LIJ says its five main hospitals had over 26,000 items, although many of these, like blood pressure machines and some infusion pumps, have no date function. No matter how hard the hospital specialists or their outside consultants work, can they be sure they are not missing at least a few critical items?
According to one consultant, an equipment manufacturer or software company offers a patch today, and then a month later sends "an improved patch." He suggests that the attempt to fix the Y2K problem with the first patch created a new problem that had to be fixed with the second.
Then there's that wonderful word: "interface." All those individual units and systems at some point have to connect, communicate, and work together with––be "integrated" with––other units and systems. Otherwise, when the patient is admitted to the hospital, the doctor's orders for lab tests fail to reach the nursing station. Or the lab results cannot be transferred to the patient's records or the lab costs are not sent to the billing office. The systems must interface not only with other systems within the hospital, nursing home, or other provider organization but also with the systems of other organizations that the provider does business with: the people it buys from, the people it bills, and the laboratories or other organizations to which it sends work. Many hospitals and other health institutions say they are sure of being completely on top of the interface situation, and many more guarantee that they will reach that point by midsummer.
Consultants, however, are less confident than the officials of these organizations about what the hospitals, nursing homes, and other health organizations are doing to protect interfaces and other computer system elements. The executive of a large consulting company says that in more than a few instances, a health care provider's reports that all organizational Y2K elements have been upgraded and replaced are contradicted when the employees of his consulting firm double-check the claims: "We find item after item they have overlooked." When systems require extensive changes and upgrading, technicians inevitably make errors, and so more testing and correcting is required. Few hospital executives are approaching December 31 with absolute calm and confidence.
Moreover, the experts say, "Don't relax just because nothing goes wrong on New Year's Day; a problem may take a week or a month to show up." In any event, most physicians' offices and clinics will not be open over the New Year's weekend, and some may stay closed on Monday, January 3, as well.
Contingency Plans
Although many health care organizations are well along with contingency planning––clearly one of the most critical of all Y2K preparations––others have not yet begun to plan for the event, or are just starting to do so. Representatives of some organizations point out that they already have the standby emergency plans required by state law and contend that these can easily be beefed up later on. They hold that this reduces the need to start so soon. Those who are well along in contingency planning assert, however, that the situation is not that simple. Moreover, planners for many hospitals, nursing homes, and other health care organizations still anticipate only short-term disruptions rather than real breakdowns; their emergency systems provide for power or food or water for a few days but do not take into account situations lasting a week or longer.
"Many act as though this were a plane crash or a local fire, with limited numbers of people, limited duration, limited disruption," says the senior Y2K specialist at a major Manhattan medical center. "Actually the problem could be multiple events occurring simultaneously, and the problem could last for quite some time, with substantial disruption and loss." The head of contingency planning at another major hospital network says a good Y2K contingency plan "must assume many more things happening at once and for a much longer period of time" than the state-required emergency plans do.
For example, a hospital or nursing-home plan might need to make arrangements to handle a large influx of extra people––not a handful of injured persons in need of instant medical care but rather many homeless people or elderly or infirm people living alone who turn to the hospitals for food, warmth, and/or medication. (New York City reportedly plans to open emergency shelters at schools and armories to care for such people, but many are likely to prefer the local hospital.) Representatives of the Greater New York Hospital Association recently began to hold regularly scheduled meetings with officials from the New York City Mayor's Office of Emergency Management and representatives of other area governments to figure out ways to improve and coordinate emergency plans.
Specialists who have been working on contingency plans across the nation say that a good plan must involve not only items such as backup power and extra supplies but also extensive employee training to "work around" crises brought on by computer or device problems or more widespread utility failures. People must be trained to do by hand those jobs that are usually performed by computers and biomedical devices, and they have to learn how to override malfunctioning systems. "Contingency planning without extensive employee training is useless," a government official says. "And you need to train both for specific jobs and for each person's part in the overall operation."
One contingency problem that has just caught official attention is the matter of men and women who are using life-sustaining equipment in their homes. Many of these people live alone, and power failures or other infrastructure problems could put them at risk. Local emergency offices have requested help in locating these people in order to provide them with special assistance in the event of power or other major failures.
Most hospitals or nursing homes plan to have extra staff on the premises over the weekend of January 1, and they may also postpone elective procedures until after the first few days, or even first week, of January. The Sisters of Charity Health Care System on Staten Island has, for example, canceled all vacations from December 27 to January 16 at its two hospitals and its nursing home and home health agency, and is planning to arrange housing for staffers who may find it too difficult to commute during the critical first few days of January.
Cash Flow from Payers
Almost all health care institutions are nervous about how Y2K problems might affect their money flow: they are concerned not so much that they will be unable to send out bills but rather that Medicare, Medicaid, HMOs, insurers, and other private payers will be unable to reimburse them. Many health care institutions, especially smaller ones, are living precariously and would inevitably find themselves in worse difficulties if their cash flow were interrupted. Nursing homes and home health care agencies, whose government payments have been recently cut by congressional order, could be particularly hurt. "Our most vulnerable point is not internal but what the state and federal government are doing with their payment systems," declares the executive head of a large home care system.
After an admittedly late and slow start, the Health Care Financing Administration (HCFA), the agency that administers Medicare, has been moving aggressively to ready its coverage and payment rules and the rest of its computer system for Y2K. In late April the President's Council on the Year 2000 Conversion reported that HCFA's "mission critical systems [were] now Y2K-compliant" and that the critical systems of the more than 60 private insurance companies on which HCFA relies to review and pay claims either were already Y2K-compliant or would be no later than July. This summer, however, HCFA must put into effect reductions in Medicare payments and other changes in payment policy required by Congress in the Balanced Budget Act of 1997, a project that will require significant rewriting of Medicare and Medicaid software. The entire HCFA system will have to be retested after these changes are made, which means that its smooth functioning will not be confirmed until well into the fall.
Many health care providers in the New York area depend on Medicaid payments for most of their income, and although officials of New York, New Jersey, and Connecticut have repeatedly said that they foresee no trouble making timely payments under Medicaid and other state- administered health programs, not every provider derives confidence from those assurances. A few institutions say they are already trying to arrange emergency lines of credit for the first weeks of January, but others express doubt about obtaining such credit. State and federal officials have unofficially been holding out the possibility of interim payments if necessary. "We've done it before," a Connecticut official notes.
The director of a Manhattan community health center states: "Medicaid is our biggest single payer, but if push comes to shove, they'll get the checks out somehow. They know the downside if they don't."
Health Care Organizations and the Infrastructure
When they are asked what their biggest worry is, officials throughout the health care system echo the answer given by officials of so many other industries: "infrastructure." In almost identical words, officials of hospitals, nursing homes, home health care agencies, and other health groups declare, "My worries aren't internal––they're external." Will they have the power needed to keep the ventilators and defibrillators working, to keep the computers running, to keep the elevators transporting patients to the operating room? Will the phones and pagers work? Will the traffic be moving smoothly enough that food and pharmaceutical supplies can be delivered?
Says the Y2K specialist at a large long-term-care facility: "My biggest worry is not what we may not get done here. We'll be ready. I worry about the things we can't control––will there be enough power, will the phones work, will our staff be able to get here?"
This is a legitimate worry, of course. If there are widespread infrastructure failures, health providers will have immense problems, no matter how well prepared they are. Yet, that clearly does not free them of the need to be as well prepared as they can be. Depending on their level of preparedness, individual institutions will be better––or less––able to surmount problems with the infrastructure.
(To see a complete list of Milbank reports, click here.)Milbank Memorial Fund
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