Downstate Hospital could go broke within months, says report

January 18, 2013 By Raanan Geberer Brooklyn Daily Eagle
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A report from state Comptroller Thomas P. DiNapoli on Thursday confirmed what many observers have suspected – that the State University of New York (SUNY) Downstate Medical Center in East Flatbush is facing bankruptcy and could be insolvent by May.

The financial problems are seen not only at Downstate’s main campus in East Flatbush, but at its two affiliated hospitals – University Hospital at Long Island College Hospital (LICH) in Cobble Hill, and Victory Memorial Hospital (now SUNY Downstate at Bay Ridge).

Indeed, the report called Downstate’s partnership with, and acquisition of two hospitals, “a major cause of Downstate’s fiscal stress.”

“SUNY Downstate’s fiscal condition is dire, and it needs all hands on deck if it is going to survive,” said DiNapoli. The report lists the hospital’s operating deficit for 2011 at $117 million.

SUNY Chancellor Nancy Zimpher frankly admitted, “None of [the facts in the report] we dispute or consider to be a surprise.”

However, she went on to say that many of these issues “are already remedied or currently being addressed at Downstate.” SUNY is putting together a “comprehensive, fiscally responsible plan” that will make Downstate a stronger institution, she added.

DiNapoli’s report stated that LICH had operating deficits for 17  years before it was acquired by Downstate – going back to 1994. During 2010, the report continued, the Cobble Hill hospital had an average of 284 unused beds (excluding maternity) every day.

“The acquisitions of LICH and Victory Memorial in the midst of known underutilization and recurring operating losses suggests an overall lack of leadership and governance in planning the future of Downstate,” the report reads.

The tone of this report was a marked contrast to the day in May 2011 when the merger between LICH and Downstate was announced, happy speeches were made, a slide show kept playing, and elected officials and community leaders applauded.

The merger was widely hailed as the device that would save LICH, especially in the aftermath of LICH’s controversial former affiliation with Continuum Health Partners.

Another problem the auditors found was the fact that “in 2011, the hospital had or shared 15 senior administrators with annual salaries in excess of $200,000. These salaries remained constant even as the hospital sent layoff notices to 469 employees with an average salary of $63,000 at Downstate and $41,500 at LICH.”

Assemblywoman Joan Millman, who represents Cobble Hill, said, “Both hospitals [LICH and the main Downstate campus] are hemmorrhaging money every single week, they have empty beds, and they have to find a solution because it can’t go on like this. LICH has been in our community for 150 years, but when many people in our communities have severe or hot-to-severe hospitals, they choose other hospitals in Manhattan.”

At a recent healthcare meeting at Borough Hall, however, Millman said she was told that Victory was on firmer footing that the other two SUNY “campuses.”

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