The board of ViaHealth, Rochester, N.Y., last week unanimously voted to close one of the system's three hospitals, 269-bed Genesee Hospital in Rochester, citing the hospital's $60 million in long-term debt, more than $2 million per month in operating losses and the departure of a significant number of primary-care physicians.
Clinical services should be closed within 60 days and all operations within 90 days.
ViaHealth President and Chief Executive Officer Thomas Litz called the closure of the 112-year-old facility "a very sad day for the Rochester community."
Genesee lost $18.5 million on operations in fiscal 2000, and it wrote off $26 million for restructuring and prior-year adjustments. The system overall lost $21.7 million on operations in fiscal 2000 and wrote off $50.2 million for restructuring and prior-year adjustments.
ViaHealth had cut spending by
$50 million to date under a three-year plan to reduce expenses by $83 million by year-end 2002. That sum was not enough to overcome Genesee's problems, Litz said.
The system began in 1994 as a partnership between Genesee and 476-bed Rochester General Hospital and became more centralized as ViaHealth in 1997.
ViaHealth submitted a letter to the state health department on March 28 announcing Genesee's closure. The health department must approve a closure plan and the outplacement of patients under state regulations.
Citing not-for-profit hospitals' value as charitable assets, state attorneys general have become involved in decisions to sell or close such facilities. Two years ago, a New York court blocked the sale of 30-bed Manhattan Eye, Ear and Throat Hospital, a sale opposed by New York Attorney General Eliot Spitzer. Last month, Intracoastal Health Systems, West Palm Beach, Fla., agreed to sell two of its hospitals, rather than close them, after Florida Attorney General Robert Butterworth intervened.
At press time, Spitzer was unavailable for comment. Litz said ViaHealth's directors will speak with Spitzer before the weekend. "I don't know, quite frankly, what (the attorney general's) position will be, because, technically, Genesee Hospital is insolvent," Litz said. "Unless someone is willing to provide additional supplemental funding on a cash-flow basis, we do not have the financial resources to keep the hospital open any longer than the 60- to 90-day period that we've already planned."