New York Flushing Hospital Medical Center in Queens, N.Y., filed for approval last week to reorganize under Chapter 11 of federal bankruptcy laws.
The bankruptcy filing is a preliminary step toward merging with New York Hospital Medical Center of Queens, a member of the New York and Presbyterian Healthcare Network. New York Hospital of Queens has managed Flushing Hospital for the past two years.
As Modern Healthcare reported earlier this year, filing Chapter 11 as a precursor to merging with a stronger partner is a technique being used more often by distressed hospitals (Jan. 12, p. 22). Last year Bronx, N.Y.-based Union Hospital sought protection from creditors under Chapter 11 as a preliminary step toward being acquired by St. Barnabas Hospital in the Bronx.
Flushing Hospital said it lost $33 million in 1996 and managed to reduce 1997 losses to $13 million through a number of management controls and efficiencies. The hospital has debts totaling $84 million, plus $41 million in unfunded medical malpractice exposure.
Creditors include New York Hospital of Queens and other members of New York and Presbyterian Healthcare Network.
Under the reorganization, Flushing Hospital would merge with New York Hospital of Queens, creating a single medical center, board of trustees and physician staff.