January 27, 2013 at 05:59 AM EST
NY-Presbyterian to bail out Downtown Hospital
The last remaining hospital in lower Manhattan, financially unstable after years of operating losses, is being bailed out by a wealthy uptown white knight, Crain's New York Business has learned. New York-Presbyterian Hospital has asked state health officials for permission to acquire New York Downtown Hospital, the only institution below 14th Street since St. Vincent's Hospital closed in 2010. Downtown "has experienced persistent, significant financial difficulties that threaten its future viability," New York-Presbyterian officials wrote in December in a request to the New York State Department of Health. '[Downtown Hospital] is projected to have a significant operating loss in 2013, unless the current situation is changed." Downtown will become the sixth campus of New York-Presbyterian. Currently a 180-bed community hospital, Downtown may look very different as a campus of an uptown owner, although it was not clear late last week what plans the huge health system has for Downtown. "[The facility will] transition into a sustainable and financially feasible model of care," according to New York-Presbyterian's application to the state. The proposed deal seems similar to the transaction struck last week between Montefiore Medical Center and New York Westchester Square, a bankrupt Bronx community hospital. Both Montefiore and New York-Presbyterian are buying financially troubled community hospitals. Under Montefiore's ownership, Westchester Square will cease being a hospital and will have only emergency, surgical and primary care services. Unlike its Bronx counterpart, Downtown will stay a hospital, simply because lower Manhattan can't do without one. Manhattan overall has 6.3 hospital beds per 1,000 residents. Lower Manhattan has a paltry 0.57. New York-Presbyterian executives believe they can save Downtown by improving the "quality, delivery and efficiency of the existing services." "Our plan is for Downtown to remain a community hospital," said a New York-Presbyterian spokeswoman, declining to elaborate further. Jeffrey Menkes, Downtown's president and chief executive, declined to comment. Downtown has been in the New York-Presbyterian health system's sprawling network since 2006 but is a separate corporate entity. Downtown has struggled for years, even selling off a parking lot to developer Bruce Ratner in 2004 to raise cash. New York-Presbyterian, meanwhile, is a behemoth with nearly $4 billion in revenue. It employs some 20,000 workers, including 6,000 doctors, and has nearly 2,300 beds.
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