11/20/2012 01:11 pm ET Updated Jan 20, 2013

What Health Care Policy Learned From Sandy

In the first hours of superstorm Sandy, the health care system of New York City had to respond rapidly to the evacuation of five hospitals and the loss of 2,000 acute-care beds.

And they did. That's what the medical community is trained to do, after all. Hospitals deferred elective procedures and hospitalizations. But part of the reason the hospital reaction worked is because they hold beds open for emergencies -- just as had been planned.

This is what we call surge capacity. But it is seen by some deficit hawks as a luxury we can no longer afford in these lean times. During Sandy, surge capacity was vital because about 8% of the city's hospital beds closed -- and these displaced patients, often with very complicated medical conditions, needed specialized care.

There are indeed many areas in health care where greater efficiency can lead to huge savings -- but surge capacity is simply not one of them. Legislators in Washington should keep that in mind as they wrangle with the White House over how to make health care more efficient and less expensive.

Surge capacity is part of the ongoing planning to make sure communities can provide medical care during a crippling crisis.

In the first 12 years of the 21st century, New York City and its system of hospitals, ambulances, doctors, nurses, specialists and technicians have responded to crises that include the terrorist attack of 9/11, anthrax attacks, blackouts, hurricanes, devastating snowstorms and airplane accidents -- as well as the heart attacks, bursting aneurysms, burns from fires and the many other kinds of everyday emergencies.

Hospitals have seen the need for care soar from HIV and AIDS, the diabetes epidemic and deadly strains of the flu. At the same time, financial policies, both state and federal, have closed hospitals -- and the hospitals that remain have been expected to absorb the patients.

In short, hospitals have been caught in the middle of a difficult balance between what society needs to plan for in health care and what it is willing to pay for.

Take the example of teaching hospitals. With each budget, teaching hospitals are forced to defend the extra money they receive for teaching residents to be doctors. Since the mid-1990s, Washington has capped what it will pay hospitals for training of residents -- and that is one reason we now face a shortage of doctors. With the shortage projected to reach 125,000 by 2025, it makes no sense to limit the funds that will enable health care to deal with the shortage.

Policymakers in Washington are also questioning whether hospitals should be paid extra for the same services that can be done in a doctor's office. This would cut spending to hospitals and push many areas of care to the less expensive doctor's office. For some patients, older patients for example, the appropriate setting for care is the hospital outpatient center.

What is not clearly understood when you examine health care policy through the prism of budget bottom lines is that the federal government, most often through the Medicare program, makes investments in health care that do not have an immediate payback. Some policy analysts call this spending that is more than the empirical cost of service. This spending includes critical short-term investing like surge capacity. It also has long-term effects, like investing in medical education to ensure there will be enough doctors to take care of Americans as we age.

What makes sense on the ledger table often can have serious implications when it comes down to the doctor's examination table.

Running a hospital is expensive. Everything it provides must help pay for emergency departments, interpreters, nutrition programs and many other services that hospitals must have due to regulations and/or community needs. Academic medical centers provide even more, such as trauma or burn centers.

It all adds up -- and the question of keeping beds open for surge capacity crystallizes all these issues of hospital funding.

Every community needs more hospital beds than it uses on a typical day, just as it needs excess firefighting or police capacity.

And until we resolve this question of how many hospital beds to hold in reserve, we will face continued pressure to eliminate them with every budget cycle -- as well as the pressure to eliminate many other necessary programs.

The overall lesson of superstorm Sandy is that our complex and compassionate health care system works during an emergency. But it won't work if policy makers confuse emergency capacity with waste.

Dr. Herbert Pardes is the vice chairman of NewYork-Presbyterian Hospital.