New York heard it for the final time last week: Privatization of the city's public hospitals is not an option.
The New York State Court of Appeals in Albany ruled unanimously March 30 that the 1969 statute that created the public hospital system prohibited New York City Health and Hospital Corp. from leasing 442-bed Coney Island Hospital, Brooklyn, to for-profit Primary Health Systems.
The ruling upheld two lower-court decisions and marked a victory for the New York City Council and the Campaign to Save Our Public Hospitals, a group of union leaders and community activists that had sued to block the lease when it was first proposed in 1996.
Health and Hospital Corp. does not have the authority to lease any of the 11 city hospitals to private organizations, the court ruled. The statute that created HHC "clearly indicates that the municipal hospitals would remain a governmental responsibility and would be operated by HHC as long as HHC remained in existence," the ruling said.
Commenting on the ruling, Mayor Rudolph Giuliani said the "artificial distinction" between not-for-profit and for-profit status was antiquated and impeded efforts to improve the healthcare system. But he added that "now that the Court of Appeals has interpreted (the law) that way, that's the law in New York."
Giuliani proposed privatization of three of the city's hospitals in 1996. In November of that year, the HHC board approved a 99-year lease of Coney Island to Primary, with a 99-year renewal option.
Before the deal could be completed, the City Council and the Campaign to Save Our Public Hospitals filed separate suits to block the lease.
A representative of the National Association of Public Hospitals said the decision probably wouldn't affect similar attempts in other cities because the case hinged on New York law.
Wayne, Pa.-based Primary filed for Chapter 11 bankruptcy protection last month after losing money on its four Cleveland hospitals (March 29, p. 17).
"If we hadn't brought this case, Coney might have been operated by a bankrupt corporation," said Ira Finkelstein, a law-yer representing the City Council.