Eight-hospital St. Vincent Catholic Medical Centers said it would close two hospitals as part of a turnaround plan by new management hired to nurse the New York system's ailing finances through recovery.
The decision to shutter 106-bed St. Joseph's Hospital and continue with the previously announced closing of Bayley Seton Hospital within the next year is part of the turnaround plan to improve the system's cash flow from operations by $150 million. St. Vincent ended 2003 with $1.7 billion in revenue and $68 million in operating losses, largely from its acute-care hospitals, and said it could not afford the $40 million capital investment St. Joseph's required over the next five years to keep the hospital competitive.
"We are confident that the turnaround initiatives will result in increased revenue and help us better manage our resources to ensure that St. Vincent Catholic Medical Centers supports and grows its healthcare mission," said new Chief Executive Officer David Speltz in a news release. St. Vincent hired Speltz and Tim Weis, his partner in the turnaround firm Speltz & Weis, earlier this year (See related coverage, p. 32).
System spokesman Michael Fagan said the turnaround and improved cash flow would be achieved through better business operations and with "very little" job cuts. "Our goal would be to invest $288 million in needed capital expenditures over the next three years," he said. "That would of course be predicated on the other components of the turnaround plan being successful so that the system would have access to capital."
As part of the phased closure of St. Joseph's, outpatient services will be moved to Mary Immaculate Hospital and St. John's Queens Hospital, or possibly to a site in the area currently served by St. Joseph's. Psychiatric inpatient services will move to Mary Immaculate.
St. Vincent plans to strengthen in-hospital services and develop centers of excellence at Mary Immaculate Hospital and St. John's Queens Hospital, and also to continue renovating St. Vincent's Hospital Staten Island. As previously announced, Bayley Seton Hospital will close and its behavioral beds will be transferred to St. Mary's Hospital Brooklyn. The system also said it is evaluating interest from several outside hospital systems in acquiring St. Mary's.
The initiatives have been approved by the system's board of directors and referred to its two sponsors, the Diocese of Brooklyn and the Sisters of Charity of New York, for final review and approval.