A vast network of Brooklyn health-care providers would be created under a plan unveiled Tuesday that officials said would make SUNY Downstate Medical Center financially stable and shore up other struggling hospitals in the borough.
The proposal would involve SUNY Downstate, Brooklyn’s only academic hospital, handing one of its three facilities, Long Island College Hospital, to a new operator or closing it and laying off staff at another, University Hospital of Brooklyn.
The proposal doesn’t guarantee that LICH will remain open, although SUNY officials and a nurses union representative said potential operators had stepped up to take over the struggling Cobble Hill institution. A Wall Street Journal analysis of the plan estimates SUNY would need to spend nearly $130 million for the LICH transfer.
More dramatically, the SUNY plan would establish a new government agency to oversee the creation of a Brooklyn health-care network. For Brooklyn’s hospitals, many of which are struggling financially with poor patients and heavy debt loads, it would allow them to cut costs by reducing the overlap between services.
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“We’re going to try to build something a little bit bigger than hopefully what we can sustain on our own,” said Lora Lefebvre, associate vice chancellor for health affairs at SUNY. “If we get into partnerships with four other hospitals, everybody won’t have to do stroke treatment. There are opportunities to downsize the service lines, with us all seeing a financial interest in working together.”
SUNY trustees voted unanimously to approve the plan, and it must be submitted to the New York state Department of Health and Gov. Andrew Cuomo‘s budget aides by Saturday. The state Legislature and Mr. Cuomo required the plan in budget legislation passed in March, after SUNY Downstate had asked for $150 million in extra funding. The legislation didn’t specify whether the hospital would get the money.
If approved, SUNY’s plan could trigger about $435 million in new state aid for SUNY and the network of hospitals over four years, according to the Journal analysis of the proposal. In addition to SUNY Downstate’s facilities, SUNY officials said at least three hospitals are interested in joining the network. The hospitals weren’t named.
SUNY Downstate is among several Brooklyn hospitals under severe financial strain. Its hospitals lost nearly $276 million in 2011 and were expected to lose more than $200 million last year, according to an audit by New York State Comptroller Thomas DiNapoli. They lose nearly $3 million every week, the audit said.
Auditors blamed competition for patients, losses from LICH since SUNY acquired it in 2011, and weaknesses in governance and management. SUNY Downstate employs 8,000 people.
Some smaller community hospitals already have stabilized their finances by affiliating with large networks, such as North Shore-LIJ Health System. Montefiore Medical Center has amassed a private network of hospitals and clinics and a patient management system that makes it easier to run a profitable operation in the Bronx, which like Brooklyn has a high percentage of poor patients.
But Ms. Lefebvre said Tuesday that the approach SUNY was proposing—a public-benefit corporation to coordinate services at multiple hospitals—doesn’t appear to have been tried before. It could cost the state $60 million to set up the corporation to oversee the network.
Kenneth Raske, president of the Greater New York Hospital Association, a trade group, called the proposal “an innovative approach with the real potential of securing access to health care services for a much needed population.”
SUNY trustees asked skeptical questions during a special hearing in Manhattan where Ms. Lefebvre made a presentation, but none said they were opposed.
SUNY Downstate considered a range of options to rehabilitate its ailing Brooklyn hospitals, including merging with another hospital or abandoning the business of operating hospitals altogether and focusing on its medical school.
Ms. Lefebvre said the network emerged as the best option because it would allow the hospital to become financially sustainable, while also offering help for the broader Brooklyn health system.
SUNY has also hired a consultant to help cut costs at University Hospital of Brooklyn in Prospect Lefferts Gardens, including changing its system for purchasing supplies, improving the accuracy of its patient intake system and reducing staff by 500 to 600 people. That would help the hospital close a roughly $225 million cash gap between 2014 and 2017.
Date: May 28, 2013