Flushing (N.Y.) Hospital Medical Center's worsening financial health and ongoing standoff with labor made for fiery drama in a Brooklyn courtroom earlier this month.
The Chapter 11 bankruptcy saga is unusual because the hospital's largest creditor-New York Hospital Medical Center of Queens-is also its manager. Labor leaders say that relationship and other facts add up to a pattern of conflicts of interest that jeopardizes Flushing's chances of surviving as an acute-care hospital (Sept. 7, p. 26).
Management denies such a conflict.
On Sept. 11, U.S. Bankruptcy Judge Conrad Duberstein in Brooklyn repeatedly denied a motion by union leaders seeking to block proposed layoffs of more than 200 hospital workers. He also threatened to throw the case out of court unless labor and management resolve an ongoing contract dispute that continues to interfere with the bankruptcy proceedings.
Last week, Flushing spokesman Brian Salisbury said talks are continuing with 1199 National Health and Human Services Employees Union, whose contract ended July 31.
Despite his refusal to block layoffs, a garrulous Duberstein, who turned 83 last week, seemed sympathetic to the plight of Flushing workers, a number of whom turned out for the hearing. "This is not just a battle of dollars and cents. The human element is here," he said.
But in a sobering report by Martin Bunin, an attorney for the creditors' committee, the focus turned to Flushing's jittery financial house. According to auditors hired by the committee, Flushing is losing $1.7 million every month. "The hospital cannot continue in operation with that kind of operating loss," he said.
Bunin said the ongoing labor-management dispute is "capable of making this Chapter 11 case fail and the hospital close." He said an agreement must be worked out immediately. He also noted the problematic dual role of Flushing's management and called for an independent consultant to advise the hospital's board of trustees on how to proceed.
The board passed a motion earlier this month reaffirming its confidence in management in continuing to run Flushing as an acute-care hospital. Nevertheless, management has agreed to provide information to any third party who might be interested in taking over Flushing's operations, said Lawrence Handelsman, Flushing's bankruptcy attorney, with the New York firm of Strook & Strook & Lavan.
One candidate, Jamaica Hospital Medical Center in Queens, already has entered a confidentiality agreement with management, he said.