IV. Civil Rights Litigation: The Unfulfilled Promise of Title VI

       As far as establishing national precedents or changing the behavior of federal planning and civil rights agencies, the results from the hospital relocation lawsuits were abysmal from the perspective of the civil rights advocacy groups. As seen in Parts II and III, civil rights litigation has been instrumental in forcing government accountability at certain levels: it forced the government to set standards defining express legal obligations, as in Ochsner; it forced the government to comply with express requirements to investigate complaints of Title VI violations, as in the first phase of Wilmington; and it prevented cases of intentional discrimination by recipients of federal funding, as in Simkins.  Thus, civil rights litigation has been successful where there is evidence of intentional discrimination and/or a complete abdication by the government of action explicitly required by law.  While Simkins, Ochsner, and the first phase of Wilmington reflect some progress in fighting race [p1063] discrimination in health care, Title VI has not been as successful in the hospital closure cases.

      Title VI challenges to hospital closures are different because they rely on the court taking seriously the disparate effects language in the regulations as it is practically impossible to show intentional discrimination by the bodies making closure or relocation decisions.  Moreover, where such closures are sanctioned by the federal or local government, it requires the courts to step in and exercise independent judgment about the merits of the decision in contravention of government approval.  Thus, the cases discussed above left open two critical questions: to what extent must the federal government actively use its facilities planning power to ensure the distribution of hospital resources in equitable ways; and to what extent are courts willing to serve as a check on the government's decisions in individual challenges to hospital closures.

      In this Part, I will review the courts' decisions in this area to show how they have undermined Title VI enforcement by eviscerating the disparate effects protection promised under the regulations.  Specifically, courts have done this by devaluing the harm alleged by plaintiffs and showing undue deference to defendants' justifications of closures.  In order to flesh this out, I will look at two typical scenarios - public closure and private relocation.  While my analysis will draw upon the decisions from a number of cases, I will focus my discussion on two key cases - NAACP v. Wilmington, the first Title VI challenge to a private hospital relocation to reach the courts, and Bryan v. Koch, a Title VI challenge to the closure of a New York public hospital.  These cases illustrate that despite two very different approaches and degrees of protection provided plaintiffs by the Bryan and Wilmington courts, the ultimate result is the same - courts have created an almost insurmountable barrier for plaintiffs challenging hospital relocations.

A. Typical Scenarios of Hospital Closure/Relocation

      1. Private Hospital Relocation in NAACP v. Wilmington

In Wilmington, plaintiffs brought a Title VI challenge to prevent the closure and relocation of hospitals owned by a private hospital corporation, Wilmington Medical Center, Inc (WMC).   WMC provided a major portion of the hospital care for New Castle County, Delaware.   In fact, WMC was the sole provider of tertiary care and [p1064] almost the sole provider of obstetrical care. Three nonprofit hospitals formed the center of its operations: the General Division, the Memorial Division, and the Delaware Division - all located within the City of Wilmington. It was the largest provider of free care for the indigent in New Castle County.

      WMC decided that a massive capital expenditure program was required in order to modernize its facility, stay competitive in the health care market, and increase the quality and level of care it was delivering.   It adopted a plan entitled “Plan Omega,” in which the Memorial and General Divisions would be closed and the Delaware Division (hereinafter referred to as the “City Division”) would be renovated, reducing the number of beds for downtown Wilmington to 250. As part of Plan Omega, a new sixty million dollar, 800 bed tertiary care facility would be built in the Stanton suburb of Delaware (the “Stanton or Suburban Division”). A number of important and high-need services would be terminated at the Delaware Division and relocated exclusively at the new Stanton location, including obstetric, high-risk prenatal and specialty pediatric, gynecology, and hemodialysis. Primary care clinics, on the other hand, would be consolidated at Delaware Hospital, as would psychiatry, dentistry, and some other services.

      Phase I.  In their initial complaint plaintiffs alleged that Plan Omega violated Title VI because it discriminated against the poor, ethnic and racial minorities.   Plaintiffs noted that the minority and elderly populations were heavily concentrated in the City Division, which also tended to be populated with a large number of low income patients without access to private or public transportation to the proposed suburban location.   Moreover, the communities in the City Division had a disproportionately higher need than residents of the [p1065] suburban location for many of the services, such as OB and cardiovascular services, which were being relocated exclusively to the Suburban location. In short, certain services were being moved 9.35 miles further from the people who needed them the most, but would have no way of accessing them.

      The court ordered OCR to investigate and ultimately OCR agreed that the discriminatory effects of the proposed plan would violate Title VI.   Despite these findings, federal funding was not terminated and DHEW/OCR did not inquire about less discriminatory alternatives; rather DHEW allowed WMC to continue with the Plan subject to certain assurances.   In particular, WMC agreed to provide “free and adequate transportation” for patients, visitors, and employees between the City and Suburban divisions. WMC also had to make assurances that it would not allow either division to become “racially identifiable” and that it would direct resources for the complete renovation of the City Division in such a manner as to prevent the ultimate deterioration and neglect of the downtown location.

      Phase II.  The plaintiffs challenged this revised plan under Title VI as well.   First, plaintiffs argued that despite some mitigation of harmful effects, the increased distance and travel time would effectively discourage needed care by the poorer residents and minorities of Wilmington.   Moreover, plaintiffs were skeptical of the financial assurances made by defendants to maintain the facility and provide transportation.   Second, plaintiffs challenged the fundamental unfairness of the removal of such critical services from a high need, underserved community, especially in light of an alternative plan that would have less discriminatory effects.   In fact, the plaintiffs specifically identified a plan that had been rejected by WMC called Reverse Omega that would result in an 800 bed Delaware Division and 200 bed Southwest Division that would keep most of the beds in the community with the greatest need.   Finally, the plaintiffs [p1066] alleged that WMC failed to show an important enough justification for its plan in light of the less discriminatory alternative.

      After a lengthy consideration of the plaintiffs' allegations and OCR findings, the court ultimately held that in light of the contract assurances and free transportation negotiated by DHEW, plaintiffs could not make out a prima facie case of Title VI violation.   The Court went on to note that even if the plaintiffs could show a disparate impact, the defendant had established that the restructuring served a legitimate, bona fide interest because the less discriminatory plan could only be accomplished at significantly greater cost.

      2. Public Hospital Closure in Bryan v. Koch

      In Bryan v. Koch, a Title VI challenge was brought to prevent New York City's decision to close Sydenham Hospital in Central Harlem, which served a population that was 98% minority (black and Hispanic).   The mayor had appointed and charged a special task force to “examine ways of reducing costly excess hospital capacity while maintaining access to high quality health services.” Ultimately, the task force recommended, and the city decided to replace some hospitals, reduce bed capacity at others, and to close two out of seventeen of municipal hospitals. The closure of Sydenham was challenged on the grounds that it would have a significant adverse impact on blacks and Latinos. Plaintiffs also sought a preliminary injunction to temporarily enjoin Sydenham's closure pending the outcome of the lawsuit or assurances by the city that the in-patient and emergency needs of the minority populations would otherwise be served.

      In stark contrast to Wilmington, the facts about the potential impact of the closure are scarce because no OCR or HHS investigation [p1067] had been completed. Nonetheless, the 2nd Circuit majority refused to issue an injunction temporarily preventing closure, despite the lack of data that should have been collected by OCR and that was necessary to assess the magnitude of harmful effects resulting from the closure. It affirmed the District Court's findings that there were only minimal effects on racial minorities and that the city's decision was justified by a nondiscriminatory reason - the government's fiscal concerns.

B. The Failure of Title VI in Preventing Hospital Closures

      In making a prima facie case for a Title VI violation, the plaintiff must prove that an act, policy, or in this case site location, will have discriminatory effects.  This requires not only statistics demonstrating that a particular race or ethnic minority will be disproportionately affected, but that a significant adverse effect will result.  Proof of disparate effects merely shifts the burden to defendants to proffer evidence of a legitimate, nondiscriminatory reason for the decision.  There are two key criticisms of the courts' application of Title VI to hospital relocations/closures: (1) the failure to properly value plaintiffs' harm; and (2) too much deference and weight given to defendants' justifications for closure.

      1. Devaluation of Harmful Effects

      Courts have devalued plaintiffs' allegations of harm in a number of ways.  Some courts have been outwardly hostile to disparate effects claims, viewing intentional discrimination as the only basis for private relief under Title VI.  Bryan provides the most obvious example of this.  The District Court spent most of its opinion analyzing whether there was intentional discrimination and questioning whether plaintiffs had the right to use Title VI to seek injunctive relief without evidence of bad intent.   It devoted so little time to plaintiffs' allegations of disparate effects that the dissent in the appellate decision characterized the analysis as “a mere afterthought.” Even where courts appear to take the disparate effects test seriously in theory, they have applied the test in ways that devalue certain kinds of harm identified in Part I of this article. First, courts create an impossibly high burden for plaintiffs [p1068] to recover, essentially requiring them to show that the challenged action will result in complete foreclosure of access to care. In Wilmington, for example, the court only seemed to view immediate disruptions in hospital care as significant. The court focused on two issues: (1) Will the relocation result in a foreclosure of plaintiffs' access to emergency and non-emergency services? (2) If transportation will be a barrier, how will this be fixed? Apparently, after their negotiations, DHEW and the defendants answered these questions to the court's satisfaction.

      On the other hand, anything short of absolute and immediate foreclosure to hospital services is dismissed as insignificant or too remote.  The indirect behavioral, long term, or psychic harms identified in Part I.A. of this Article have not been considered sufficiently burdensome to constitute a Title VI violation.  For example, allegations that increasing the burden of time and distance would have the effect of discouraging timely routine and preventive care were never really addressed by the court.  Moreover, the fundamental unfairness and racial stigma arising out of a plan to relocate services from minority areas with greater need, to a predominantly white area with much less need, was also largely ignored.  Finally, plaintiffs' concerns about the ultimate “ghettoization” of the hospital leading to substandard care were characterized as a “fanciful scenario.”

      Courts also underestimate the magnitude of the harm from closure through uncritical acceptance of the mitigating factors offered by defendants.  In Wilmington, to the extent that the court considered the plaintiffs concerns about the de facto segregation of care, the deterioration of the urban facility, and the racial stigma that would result from both, it seemed satisfied with the defendants' vague assurances not to let this happen and by DHEW's purported willingness to enforce these assurances.   The court's reliance on these assurances was particularly troublesome in light of the OCR's inadequate resources and of DHEW's initial neglect.  Bryan provides the best example of the courts' underestimation of harm in its discussion of the City's claims that access to care will not be disrupted because other hospitals can provide catchment for patients previously served by Sydenham.  The court focused only superficially on this claim and failed to deal honestly with the limited ability and willingness of these other hospitals to take more Medicaid and uninsured patients.  Oddly, the court relied on the unproven assertion that existing hospitals were already treating a significant number of Medicare and Medicaid [p1069] patients as evidence that they would continue to do so, which defies both common sense and experience. First, in treating Medicaid and Medicare patients as synonymous in the eyes of providers, the court ignored the pervasive problem of Medicaid discrimination, a critical element of plaintiffs' effects argument. Moreover, even if it were true that these hospitals already treated significant numbers of Medicaid patients, experience shows that this would decrease, not increase, their willingness and ability to absorb more Medicaid patients.

      2. Undue Deference to Defendants

      In measuring the legitimacy and sufficiency of a defendant's justifications for actions that have discriminatory effects, there are three important issues to be addressed: what reason is important enough to overcome plaintiffs' showing of harm; is the defendant required to demonstrate that its decision was the least discriminatory alternative available or that other alternatives were considered in the decision-making process; and how closely should the defendant's reasons or processes be scrutinized.

      In every challenge to a hospital closure or relocation, the defendant asserts an economic justification for the closure, and courts have been extremely deferential in finding such reasons legitimate.   In Wilmington, for example, the defendant paints a picture of a hospital fighting for its survival in a competitive market.  In Bryan, the city justifies its action as a way to conserve resources in the midst of a budget crisis.   Defendants will usually also assert quality of care justifications as well.  In both Wilmington and Bryan, the hospital suffered quality of care problems as evidenced by the condition of the facility and problems with its accreditation.  The defendants argued that the closure/relocation would enable them to improve the quality of care most efficiently by using the resources to construct newer and better facilities.

      Courts have differed as to whether defendants must consider less discriminatory alternatives and the level of scrutiny to be applied to the defendants' decision-making process.  Bryan provides an example of the most hands-off approach a court can take.  In Bryan, the government failed to investigate the likelihood that the closure would reduce health care expenditures in light of the disruption to access that [p1070] would result and the potential shuffling of patients to more expensive facilities. The government also failed to consider whether less discriminatory alternatives to closing the hospital existed, such as merger or consolidation. Although such failures undermine both the rationality and substantive legitimacy of the City's decision, the majority nonetheless deferred to the City. It seemed satisfied that there was some decision-making process, and it gave only token consideration to the form and criteria used to decide which hospital to close. In fact, the Bryan court explicitly ruled that Title VI does not “require [] consideration of alternatives beyond an assessment of all the municipal hospitals in order to select one or more for closing.”

      While a somewhat more protective approach was used in Wilmington, it effectively led to the same result.  The Wilmington court suggested that the defendant did have a duty to consider whether less discriminatory alternatives exist to meet the stated goals.   As part of its analysis, the court found it relevant that a less discriminatory alternative had been considered and rejected by the defendant hospital corporation.  Nonetheless, the court noted that the burden of persuasion remained on the plaintiff to prove that the defendant's justification was mere pretext or that the less discriminatory alternatives would be able to serve the defendant's purported goals.   In its analysis, the court was quite deferential to defendants.

      For example, despite the fact that a less discriminatory restructuring plan was available, WMC justified its rejection of this alternative based on its cost.  The OCR never investigated the defendants' assertions about the cost differentials between the two plans, however.   Moreover, during trial, plaintiffs introduced persuasive evidence that the defendants had significantly overestimated the cost of the alternative plan.   While the court acknowledged the possibility that defendants overestimated the cost, it also found that plaintiffs' estimates were likely too low because of errors in assumptions made in its calculations.   Rather than require defendants to provide accurate calculations to support their cost justifications, the [p1071] court simply deferred to defendants' belief that the cost differential was significant enough to forego the less discriminatory alternative.

      Such deference only makes sense if one is simply trying to ensure that there is no “bad motive” or intentional race discrimination, without regard to a balancing of the importance of the defendant's justification against the magnitude of the harm. The Bryan court admitted this focus on motive and gave only token consideration to the disparate effects claim. In the court's analysis of the magnitude of the harm, it admitted that it could not assess the accuracy of the city's claims that any harm would be mitigated by other hospitals in the area. The court was satisfied that the defendant's decision to close Sydenham “was made not only rationally, but with sufficient concern for likely consequences.” This sounds like a classic test to determine whether a defendant's reasons are merely a proxy for bad motive; not an independent scrutiny of the reasons to determine whether they are important enough to overcome the evidence of disparate effects.

      Thus, despite explicit regulatory protections against neutral actions that have discriminatory effects, evidence of significant short and long term disruptions in access to health care that result from discriminatory closures, and severe lapses by private and public actors in their decision-making process and economic justifications for closure, courts have applied Title VI in ways that have prevented any meaningful relief for plaintiffs.  Courts have followed the path of disparate effects claims generally, by effectively foreclosing relief for plaintiffs absent proof of intentional discrimination.

C. The Implications of Blaming & the Devaluation of Plaintiffs' Harm

      Complaints about courts' search for a “bad motive” or “blameworthy” defendant in civil rights challenges is not unique to health care. A common criticism levied at the courts in civil rights generally, and specifically, in the hospital closure cases is the failure to apply a legal standard that is faithful to the intent of Title VI and its implementing regulations. The implications of this construct are particularly dangerous in hospital relocation cases for the reasons identified in Parts I-III of this Article. The underfunding of health care for the indigent, the economic and racial disparities fostered through differential treatment of Medicare and Medicaid beneficiaries, and the significant gaps in the public-private patchwork delivery system make it [p1072] impossible to identify any particular actor as “blameworthy” or as not reacting to real economic pressures created by this system. Indeed, we see the opposite occurring - courts are using these factors to shield defendants from responsibility, while at the same time ignoring these factors in assessing the magnitude of the harm that will be suffered by plaintiffs. This shielding obscures legitimate policy reasons for holding public and private hospitals more accountable to these underserved communities, even though they may not have evidenced bad motive deserving of blame.

      While applying an improper legal standard obviously makes plaintiffs' challenges much less likely to succeed, a closer look at the courts' opinions in this area reveals a struggle that can not necessarily be fixed by tweaking the legal standards used.  I believe that what is going on is the courts' deeper frustration with what it perceives to be an impossible task - that is defining and enforcing the federal government's obligation of racial equality within a health care system that has been created and maintained in a way that fosters economic and race discrimination and is, therefore, inherently incompatible with racial equality.  This struggle is clearest in the apparently inconsistent treatment by courts of the economic elements of the hospital relocation problem: that is the problem of the underfunding of health care for the poor generally and how that informs the courts view of plaintiffs' allegations of harm versus defendants' justifications for closure.

      1. Economics as a Shield from Blame Measuring the harmful effects of the closure, as well as understanding the reasons underlying such closures, depends in large part on assumptions about other actors in the health care system.  The impact of multiple actors and forces in this patchwork system make it impossible to find a blameworthy defendant.  In fact, the opposite feeling is engendered -the tone overwhelmingly is one of sympathy for the defendant in challenges to both private and public hospital closures.  In Wilmington, the court took seriously the defendant's perception of the economic pressures created by WMC's significant public function in a system where neither the federal nor state government ensures universal coverage, and where market competition for more affluent patients was seen as critical to long term survival.   In Bryan, the court painted the picture of a city “struggling mightily” to provide health care for its citizens in the midst of a budget crisis and the [p1073] described closure as one of the many “painful steps” it had undertaken.

      The problem is that the federal government enables local governments and private actors to make decisions that do not appear to serve the purported financial concerns and that are made without any examination of, or concern about, whether affected communities will still have adequate access to care after the closure.  In Wilmington, for example, the effects of closure, including the immediate disruption to hospital services due to lack of transportation between the city and suburban division, were not considered by the hospital or local or federal officials, prior the court forcing OCR to investigate.  In Bryan, the city never considered other options to closure, did not investigate the willingness and or capability of other hospitals to help serve the affected community, and never sought assurances from these other hospitals that they would treat the indigent patients previously served by the public hospital being closed.  Sadly, but predictably, one of the hospitals that the defendants argued would be available to ensure uninterrupted access to care for Harlem residents was later downsized as well.   In fact, Sydenham Hospital was merely one a number of hospital facilities lost by Harlem residents in the course of a “Manhattan-wide” plan for reduction in hospital bed capacity, where the reductions tended to occur in underserved communities with the greatest need and least resources.

      Moreover, courts fail to appreciate the obligations arising out of the public-private and federal-state partnerships created as a result of the significant public subsidies used to support these hospitals.  Two examples of this partnership, the Medicare/Medicaid and Hill-Burton programs were described in Part II.  Another significant form of public subsidy, which occurs through tax-exemptions provided to nonprofit hospitals at the federal and state levels, was described at Part I.A. above.  Despite the fact that hospitals have benefited significantly as a result of this partnership, and have corresponding obligations as a result, courts fail to hold hospitals accountable to the obligations they [p1074] voluntarily undertook as a condition of the benefits they receive. For example, courts cite to the provision of charitable care by defendants as further evidence of the degree of economic pressure that compels hospitals to consider relocation, generating sympathy for the defendants. They fail to account for, or compare the amount of charity care delivered by the defendant hospitals against the amount of public subsidies received through federal and state tax-exemptions, direct funding for construction, the amount of its endowment, or the amount of bad debt the hospital was able to write off on its taxes. In other words, no assessment is done to determine how much of the “charity care” is actually owed as a condition of the direct and indirect public benefits received by the hospital. Focus on “blaming”, therefore, obscures other characteristics of our health care delivery system that demand greater accountability by hospitals and increased enforcement by courts. Indeed, the fact that such hospitals are part of a larger patchwork of private and public actors should not lessen courts' willingness to scrutinize the decision.

      2. Ignoring Economics in Devaluing Plaintiffs' Harm In contrast to the courts' willingness to consider economic factors that generate sympathy for defendants, courts have been much less willing to consider the impact of these economic realities in assessing the magnitude of the harm to minority communities.  In Wilmington, we see this in the court's casual dismissal of the plaintiff's fear of the ultimate “ghettoization” of the hospital through the inevitable draining of hospital and primary care resources as a “fanciful scenario”. In Bryan, we see this through the court's irrational assumptions about the ability and willingness of other hospitals to mitigate the effects of closure. Scholars and civil rights advocates who have identified this problem of the court's devaluation of the harm have made suggestions for reform based on one of two assumptions: either that the court is not willing to properly balance the plaintiffs harm against defendant's justifications as manifested by the use of improper legal standards; or [p1075] that courts have been unable to fully appreciate the harm because of a lack of fully developed sociological evidence about the type and magnitude of the effects of these closures for minority communities.

      However, the Wilmington and Bryan opinions reveal that there may be an additional problem that is driving the courts' apparent disregard of these effects which can not necessarily be fixed by changing the legal standard or introducing more comprehensive evidence of harm.  Rather than failing to appreciate these economic realities, courts seem to be responding to what they perceive is an impossible task precisely because of these economic realities: namely, the struggle with how to identify and remedy a civil rights violation premised upon an unequal allocation of resources when no clear minimal level of care or definition of equality is provided and where the federal government has itself sanctioned and exacerbated disparities in insurance coverage, which contribute to the hospital relocation problem.

      Once again, Bryan provides the clearest example of this in its justification for its extremely deferential approach to hospital closure cases:

       We are skeptical of the capacity and appropriateness of courts to conduct such broad inquiries concerning alternative ways to carry out municipal functions.  Once a court is drawn into such a complex inquiry, it will inevitably be assessing the wisdom of competing political and economic alternatives.  Moreover, such policy choices would be made without broad public participation and without sufficient assurance that the alternative selected will ultimately provide more of a benefit to the minority population. While the Wilmington court seemed to take its task more seriously, it still openly struggled with the problem of how to measure equality in health care and what level of inequality is “justifiable” in light of certain economic realities. For example, in response to plaintiffs' [p1076] concerns about the unfairness and stigma created by relocating services from a high need minority community to a more affluent, predominantly white area, in the face of a less discriminatory option, the court answered, with an almost helpless tone it seemed, that equality of race does not mean equal resources and that equality does not mean exactly equal. Moreover, the court expressed the same concerns as the Bryan court that Title VI might be used to create a legal obligation to guarantee some standard of care that does not currently exist, and the court seemed to fear too much responsibility for setting this standard:
       While the plaintiffs' evidence and the seriousness of the possible consequences of error might lead the Court, if it were a member of WMC's administration or board, to take a hard second look at the plan, the Court refuses to construe the civil rights statutes as a license for this Court to act as a financial overseer to those who provide services to minorities.  It would especially hesitate to assume that role in a case such as this, where the sanctions available to the Court could be applied by the market place as effectively and certainly with more accuracy. The last part of this quote is particularly troublesome because it ignores overwhelming evidence that allowing the market, as opposed to aggressive facilities planning, to determine the distribution of hospital resources actually increases the likelihood of closures in minority communities.  When faced with the challenge to second-guess government action and define what level of disparity violates Title VI, courts have essentially thrown up their hands and refused to scrutinize the government's resource decisions.
      The first four Parts of this Article show that the problem of hospital relocations and closures present a complex and very frustrating puzzle.  A story is revealed, not simply about the discrete problems of racial inequality in access to health  care, but of the more fundamental problems of our notion of civil rights.  The hospital relocation problem illuminates the disconnect between our Title VI legal construct and the reality that minority communities face as victims of an inherently unequal health care system.  It also raises our awareness of the psychic harm these communities suffer as they experience feelings of [p1077] helplessness, dehumanization and anger as critical hospital resources - the lifelines of their communities - are being taken away by local planning agencies and private hospitals subsidized by public funding, while the federal government and courts allow it to happen.