Crises Put N.Y. Hospitals in Grave Condition : Health: Mayor David N. Dinkins orders a review of the system amid allegations of malpractice and patient mistreatment.

Strained by budget cuts and taxed by plagues ranging from AIDS to drug abuse to mental illness, New York’s municipal hospital system--the nation’s largest--is experiencing a Code Blue crisis.

Charges of patient mistreatment and physician malpractice over the past two months have set off alarms on the quality of care, making it not only a health issue, but also a political one.

Mayor David N. Dinkins ordered a full review of the system “not just to restore confidence in the hospital system in the public, but in this mayor.”

The string of recent hospital horrors include allegations that:

* A Hasidic student stabbed during street violence bled to death after unsupervised physicians-in-training failed to notice one of two wounds.

* An attorney who complained of feeling ill died of apparent internal bleeding after doctors first tried to send him home and then kept him in the emergency room for 18 hours.

* A physician refused to admit a woman in labor, saying the hospital was too crowded; her baby was delivered by an ambulance crew in an admitting office.

“The system is just not working,” City Council President Andrew Stein said. Emergency rooms “are overcrowded, dangerous and overburdened; supervision is poor . . . administration is weak and there’s no accountability . . . . It’s a mess and it doesn’t just need a Band-Aid. It needs major surgery.”

The City Hospital Visiting Committee, which has been evaluating health care for 120 years, says care is at its worst “in recent memory” because of “Draconian budget cuts, demoralized staff and soaring service demands.”

Seven of the system’s 16 institutions are being investigated by a national accreditation organization that will decide if they are fit to continue receiving federal Medicaid funds. Several city and state probes are under way.

The head of the city’s Health and Hospitals Corp., Dr. Emilio Carillo, has resigned after a 19-month tenure marked by controversy over his own finances--he borrowed thousands of dollars from friends and associates, and is under investigation by prosecutors--and by warfare with City Hall over budget cuts.

The fiscally strapped city cut $156 million from the $2.8-billion annual budget of the HHC, a quasi-public corporation.

HHC runs the municipal network of 11 acute care and five long-term care facilities that primarily serve the working poor and unemployed. Sixty-two percent of inpatients are covered by Medicaid and another 14% are uninsured. About half of outpatients are uninsured and 43% have Medicaid. The New York system has 11,000 beds.

In comparison, the next-largest municipal system is Los Angeles County’s, which has six acute care facilities, one long-term hospital and a total of about 3,000 beds. “There is nothing that approximates this system,” said David Gould of the United Hospital Fund, a nonprofit research group.

The city system’s woes spill over to New York City’s 52 private hospitals, which have 24,000 beds. It is the public and private emergency rooms, which are visited by about 3 million people a year, that are the common area of crisis.

It was in the emergency room at Kings County Hospital where Yankel Rosenbaum, a Hasidic student from Australia, died last August during racial tensions in the Crown Heights section of Brooklyn. Rosenbaum was knifed after a Hasidic driver accidentally struck and killed a black child.

And it was in the emergency room at Harlem Hospital, another municipal facility, where attorney William Chance--an old friend of Dinkins--spent 18 hours before dying of undetected internal bleeding on Oct. 7.

Ken Raske, president of the association that represents the private hospitals, said emergency rooms have too many sick patients who need to be transferred to intensive care beds and too many people who treat the emergency room as a family doctor’s office.

The reasons for the bed shortage are clear, Raske says: There are “2,000 AIDS patients in beds, 750 more taking up beds for the current tuberculosis epidemic, we have drug problems, random violence--all of which take beds out of the system.”

And patients stay for a long time--an average of 10.3 days, which is “long, very long,” Raske said. Often, patients stay because they have no homes.

Emergency rooms have always received too many people with less-than-acute medical problems. But with less health care available in poor communities and a rising number of working people without health insurance, the situation has worsened.

“The ER is the one place people can go where they know they’ll be cared for first and then asked about finances,” said Gould, whose organization focuses on health care for the poor. “Waiting six, eight hours may be the price to pay.”

That was evident on a recent day at Bellevue Hospital. More than two dozen patients sat in cushioned seats watching two small-screen televisions hanging from ceiling brackets.

A woman who said her name was Luz had already waited three hours, and expected to wait another four--at least. She had a bad cold, maybe a sinus infection. Uninsured and unemployed, she had been to the emergency room for minor illnesses many times. “I have no complaints; it’s this or nothing for me,” she said.

Such patients are not always welcomed by attending and resident physicians, who get hands-on training at municipal hospitals through affiliation agreements between HHC and the teaching hospitals and medical schools.

“They came to practice trauma medicine, not treat somebody with an earache and a fever who should be on antibiotics,” Gould said. “So often their attitude is: ‘Why are you in my emergency room?’ ”

The city spends about $400 million a year on affiliation contracts to get young doctors to work in the municipal system. But critics say the affiliated doctors are not serving the most important need of city hospitals--primary care.

“Their main concern is to have a place where their students and doctors can teach and learn, but to us patient care must come first,” said Dr. Donald Meyer, vice president of the Doctors’ Council, which represents 3,300 municipal doctors.

And there is the question of who is in charge. Residents who staff most municipal emergency rooms answer not to the attending municipal doctor, but to an affiliate supervisor.

The affiliation agreements expired in June and are being renegotiated. HHC is seeking more accountability from affiliate doctors and a new emphasis on primary care, rather than specialties.

Steve Matthews, spokesman for HHC, says the agency sees the mayoral probe as a chance to repair the system’s tarnished image.

“There has been an apparent loss of confidence in the system and we’re concerned about that, because the people who use us have no choice but to use us,” Matthews said.