St. John's Hospital In Critical Condition, Could Close Doors
Appeal To State For Operating Loan
Following a meeting last Friday, Jan. 16 at Queens Borough Hall in Kew Gardens with Borough President Helen Marshall, other elected officials and community leaders, representatives of the hospital's managing company, Caritas Health Care, announced that both St. John's and Mary Immaculate Hospital in Jamaica would close their doors in the near future after accumulating millions of dollars in debt.
After Marshall mentioned in last Tuesday's State of the Borough address that the hospitals were on the brink of bankruptcy, Caritas acknowledged that St. John's and Mary Immaculate were "experiencing financial difficulties" but was working with local elected officials "to explore all available options and arrive at the best possible solution to this situation."
Vincent Arcuri, secretary of Caritas' board of trustees, stated last Friday that the organization would immediately seek a loan from the state to cover operations over a 90- day period. The time would be used by Caritas members to concoct a long-term business plan to bring both medical centers back to solvency.
If a loan could not be secured by Wednesday, Jan. 21, Arcuri noted, the board of trustees would consider a vote to close St. John's and Mary Immaculate. The closure would also affect a nursing home and a cancer center on Mary Immaculate's campus.
Under state law, any closure would take effect 90 days after such a decision is reached.
"We're at a point [where] we have to make a decision," he said. "If we can't meet payroll, and we can't pay bills, and there's no more money coming from the state, then we have to make a decision" to shut the facilities down.
Arcuri told the Times Newsweekly that a final determination had yet to be made by press time Wednesday afternoon.
Can't escape rising debt
Formerly managed by St. Vincent Catholic Medical Centers, St. John's and Mary Immaculate hospitals were purchased by Wyckoff Heights Medical Center in a deal finalized on New Year's Day 2007. St. Vincent sold both hospitals after filing for Chapter 11 bankruptcy protection in July 2005 after incurring millions of dollars in debt.
Caritas Health Care and its parent company, Brooklyn Queens Health Care (BQHC), were formed through provisions in the purchase agreement. Caritas would oversee operations at St. John's and Mary Immaculate, while Wyckoff Heights Medical Center would operate under BQHC directly.
Though the transaction absolved $25 million in debt accumulated by St. John's and Mary Immaculate previously, the medical centers suffered significant losses in the last fiscal year, according to John Lavan, BQHC's chief restructuring officer.
During last Friday's press conference, he indicated that the facilities lost $60 million in the 2008 fiscal year and were projected to enter the following fiscal year with over $27 million in outstanding debt.
Asked why the hospitals were losing money, Caritas representatives and elected officials pointed to recent cuts in the state and federal budget for health care expenses as well as discrepancies in reimbursements provided to each facility by Medicare and private health care insurers.
Since St. John's and Mary Immaculate are considered smaller community hospitals, Arcuri noted, they lack the voice to compete with more renowned health care providers in Manhattan to secure payments from the state and federal government for patient care.
"For a particular service, the larger hospitals would get $1,000, but we (Caritas) would get $500," Arcuri said. "We can't negotiate as well as the larger hospitals."
Reports of the hospitals' financial turmoil have also caused suppliers, vendors and workers at each facility to ask for more information regarding their future, the board secretary stated.
"With all the adverse publicity that has been going on, the vendors and suppliers are getting nervous," he said. "The employees are getting nervous. You can't blame anyone for not knowing what their future is."
The loan being sought by Caritas Health Care would cover the projected expenses for St. John's and Mary Immaculate for a 90-day period. If provided, Arcuri indicated, the board of trustees and Caritas management would use that timeframe to develop a "master plan" to get each facility out of debt and keep it operating in the years to come.
But even if a master plan is in place, Lavan said that additional money would need to be raised to provide much needed upgrades to each facility.
"It still requires a lot of cash, and it doesn't fix the facility and IT problems that we face on a day-today basis," he said. "We're looking at a lot of money to keep these places open."
When asked if both facilities were up for sale, Lavan acknowledged that interest has been raised by North Shore University Hospital to purchase "pieces of our operation," but interest in purchasing both hospitals outright had yet to be shown.
Cooperation from union, pols
The union that represents more than 1,500 employees at both facilities is working closely with Caritas management to help find ways to resolve its financial crunch. Coraminita Mahr of SEIU 1199 stated that members have been in close contact during daily discussions with administrators and would help push for financial aid from the state and federal governments.
"Our concern is not just the members with their jobs, but the community at large, the tremendous services that their community will be losing, and the loss of revenue for both communities," Mahr said. "It is a holistic problem that we feel we all need to be addressing."
Those sentiments were echoed by Dr. James Satterfield, president of the Medical Society for the County of Queens and vice chairperson of surgery for Caritas. He suggested that state and federal officials help draft a "comprehensive plan" to not only help keep St. John's and Mary Immaculate open, but other community hospitals across the state.
"We must salvage these hospitals. We cannot continue to cripple the health care of Queens," Satterfield said. "Physicians are losing their practices. Hospitals are dying essentially. We cannot let this start here and let the domino effect take place."
Elected officials, led by Marshall, vowed to support efforts to keep the medical centers open and to get them out of their financial difficulties.
The borough president observed that Queens could ill afford to lose two hospitals and is well behind Manhattan in the number of available hospital beds.
According to statistics in a November 2006 report issued by the borough president's office, Queens—with a population exceeding 2.3 million—had 1.4 hospital beds per 1,000 people. In comparison, Manhattan—with a population of 1.5 million—had 7.1 beds per 1,000 people.
"Nobody wants to see a hospital close," Marshall said. "We're strapped, and we're going to appeal to the state" for assistance.
Those sentiments were echoed by legislators whose districts included or are located near the hospitals targeted for potential closure.
City Council Member Helen Sears, whose district includes St. John's Hospital, added that "[y]ou can count on one hand the hospitals in this borough" if St. John's and Mary Immaculate were allowed to close. Since it would take 90 days and cost the state money to help close both facilities, she observed that it would make more sense to use resources to find a way to keep them open in the long-term.
Assemblyman Jeffrion Aubry added that despite the massive budget gap facing the state, financial aid should be secured to keep the centers running.
"Even as we face a $15 billion deficit at the state level, issues like this have to be responded to at all levels of government," Aubry said. "We're responsible for the people that will be impacted by those decisions, and we have to stand up for them."
State Sen. Joseph Addabbo added that closing both hospitals simultaneously would be "devastating" for the borough, adding that short- and long-term solutions to both centers' financial problems should be developed.
State Sen. Shirley Huntley, whose 10th Senatorial District includes Mary Immaculate Hospital, stated that she would not be a party to shutting either hospital down and would work with colleagues to keep them open.
City Council Member Elizabeth Crowley called for unity on all levels to resolve the fiscal crisis both hospitals face, while State Sen. Toby Stavisky stated that the loss of St. John's and Mary Immaculate could prove catastrophic for the borough.
"How can a borough of this size lose two major health care facilities?" Stavisky asked. "It's unbelievable."
On Tuesday, Jan. 20, Arcuri noted that Caritas had reached out to Gov. David Paterson in the hope of setting up a meeting to discuss possible aid for the ailing medical centers. No meeting was scheduled for that day, as Paterson was in Washington, D.C. to attend the inauguration of President Barack Obama.