In keeping with the national trend of health care reform, City Manager Robert W. Healy announced last Friday a revamping of Cambridge's public health care system, designed to streamline patient care in city health facilities.

The reorganized structure, tentatively named the Cambridge Hospital Community Health Network, combines the services of the city's public hospital with those of the Department of Health and Hospitals.

In addition, Healy tapped Dr. John G. O'Brien '72, the administrator of Cambridge Hospital since 1986, to also serve as commissioner of health and hospitals. Dr. Melvin H. Chalfen '49-'50, health commissioner since 1981, announced his retirement.

"We will never truly and significantly improve the health of the community until we engage the community in that dialogue," O'Brien said in a press conference last Friday.

The new network seeks to streamline patient care by reducing from six to three the operating divisions of the city's public health system: primary and family health, specialty and consultative care and mental health and addiction services.

O'Brien said control in the new system will come from the bottom-up. Doctors and nurses at the city's five neighborhood health centers and at the Teen Health Center in Cambridge Rindge and Latin School will have greater authority to order preventative treatment and testing, he said.

"The system will move from a model where the hospital sits down and waits until a patient shows up, to the business of health promotion, health assessment," said Dr. Tom P. Workman, president of Cambridge Hospital's medical staff. He added that patient-focus teams at the health centers will be able to give more personal attention to patients.

The plan is expected to significantly exceed the city's current hospital budget, O'Brien admitted, adding that he expects a change in state and federal funding to Cambridge's public health care system.

The city will switch from a fee-per-service payment plan, in which the city is reimbursed on a case-by-case basis, to a system of "capitation," in which the city will receive a fixed monthly payment expected to cover all costs.

The new financing scheme puts the city "at total risk, " O'Brien conceded, since a complex medical procedure could easily wipe out the expected $180 to $212 monthly payments.

O'Brien conceded, "In the short term [capitation] may in fact have some adverse ramifications." He said the city's health care system, currently "breaking even," will have to draw upon its assets for the first few years of the plan.

"We don't expect huge losses, but we do think we may have to draw upon some of our reserves," O'Brien said.

But the new commissioner said many health-maintenance organizations (HMO's), seen to be the future in American health care, have already adopted fixed-payment systems. And the administrator said the new financing system is suitable for a city like Cambridge.

"We have a lot of what other systems don't have," O'Brien said. "The primary-care system is already oriented toward wellness."

The city's relatively low rates of murder and emergency-room use and an already existing emphasis toward preventative car, may allow the city to continue working within its budget. "We think it's going to reward systems like ours," O'Brien said.