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.

O'Brien said the advantage of capitation lies in outpatient care. For example, the city might now spend $50 to send a nurse from a neighborhood health center for a personal consultation rather than spending $300 "for emergency-room care and unnecessary hospitalization" later.

In announcing the reorganization, city health officials cited the difficulties patients face in accessing facilities and trends in national health-care reform.

O'Brien said a rapidly expanding case load necessitated a revamping that would direct the system's resources toward patients. The city hospital received around 100,000 ambulatory visits in 1987, but is expected to get more than 230,000 this year, O'Brien said.

"It can be very fragmented for patients, despite the fact that the quality of the care is very, very high," O'Brien said. "We feel we can do a superior job and be a model nationally."

O'Brien said the new network will help Cambridge remain at the forefront of health-care reform. In 1993, Cambridge Hospital won a coveted prize for community service from the American Hospital Association.

O'Brien said the increased popularity of private hospitals made the revamping of the city's only public hospital imperative.

"Public hospitals are significantly in danger and they're closing at a pace exceeding any other division in health care," the administrator said. Only four public hospitals remain in Massachusetts: Hale Hospital in Haverhill, Boston City Hospital, Quincy Hospital and Cambridge Hospital.

Estelle Paris, chair of the city's Health Policy Board, said the reorganization reflects a trend in health-care reform to simplify management. "Reorganization is nothing new," Paris said. "It puts us in line with what's happening in health care reform."

Some city officials, however, said the restructuring was vague and not specific enough.

"It sounds like a good idea, but it's not at all clear to me how this will work," said City Councillor Francis H. Duehay '55. "This has not been presented in any detail to the council, and it seems to me the language is very general."

Duehay added that the restructuring would probably require the formal approval of the council.