Episcopal Health Services, the Uniondale, N.Y.-based operator of a hospital that faced possible removal from the Medicare program last summer, is undergoing a massive makeover.
Last week, it began closing its Smithtown, N.Y.-based psychiatric and rehabilitation hospital, a facility unceremoniously referred to as "Site B."
Soon, executives will be moving into less-costly digs in North Port, N.Y.
Shuttering Site B will save $3 million annually; relocating is expected to save another $10 million to $12 million. These are among a bevy of expense reductions that system leaders will be rolling out in the coming weeks. Episcopal has identified $43 million in cost cuts and revenue enhancements as part of systemwide changes.
Episcopal was jolted into action last summer by HCFA's scathing report of quality-of-care problems at its main hospital, St. John's Episcopal Hospital, Smithtown (July 13, 1998, p. 17). Episcopal's board of managers tapped Lorna McBarnette, a former acting commissioner of the New York State Department of Health, to rescue the ailing system.
As chief executive officer, McBarnette took immediate steps to rectify patient-care deficiencies. Now she's working to restore the system's fiscal health.
At deadline, Episcopal could not provide exact financial results for 1998. Spokesman Steve Villano said the turnaround plan is to plug losses in the past year "of approximately $30 million and to put us back on sound financial footing."
Episcopal acquired Site B in 1993, then an acute-care hospital called Community Hospital of Western Suffolk. It houses a variety of ambulatory-care services and patients undergoing psychiatric and detoxification treatment. Over the next several months, Episcopal will move roughly 42 beds to its main Smithtown facility-366-bed St. John's Episcopal Hospital. It also will seek to decertify about 60 beds.
The financial improvement plan also calls for extracting $16 million in savings at St. John's-Smithtown and $17 million at St. John's Episcopal Hospital-South Shore, in the Far Rockaway section of New York City.