After Pulse first broke the news Wednesday morning, Ms. Brier told hospital executives in a memo that Maimonides "is in the early stages of an in-depth review of Brookdale's plans to be self-sufficient. After that, we will see what the next steps are. While we may consider an affiliation of some sort, we are not in merger talks, nor do we plan to use Maimonides assets to stabilize Brookdale."
She said Maimonides would be holding town hall meetings in the near future to provide more details.
Maimonides is profitable. Brookdale, however, is in poor financial shape and targeted by the state for intervention. Brookdale, which has millions of dollars in debt on its books, is likely to declare bankruptcy in the coming months to wipe its balance sheet clean, prepping itself for a suitor just as Interfaith did.
A Brooklyn task force convened by the state's Medicaid Redesign Team recommended in November 2011 a course of action for Brookdale. It said Kingsbrook Jewish Medical Center and Brookdale should join forces, with Kingsbrook in charge of creating an integrated health system with Brookdale through a common active parent or other governance structure.
But first Brookdale had to sever operational and financial ties with the MediSys Health Network, a company that had provided management and other services to Brookdale since 2000. MediSys also had run Peninsula Hospital in Queens, which closed last year.
To execute the state's restructuring recommendations, Brookdale's board last April hired crisis management and restructuring firm Grant Thornton. It named Mark Toney as Brookdale's president and chief executive officer. (Mr. Toney subsequently left Grant Thornton to co-found ToneyKorf Partners, but remains Brookdale's president and CEO.) In September, Mr. Toney announced Brookdale had disentangled itself from MediSys.
"We are very interested in Maimonides and exploring all options available to us," said Mr. Toney.
Whether the due diligence will lead to a deal with Maimonides remains to be seen. Maimonides could reject the plan, or, yet another hospital could engage in talks with Brookdale. NYU Langone Medical Center and Continuum Health Partners were in merger talks last year, until another suitor, Mount Sinai Hospital, replaced NYU Langone at the negotiating table.
Mr. Toney projects that Brookdale will break even in 2014, but bankruptcy "is something Brookdale must completely and fully evaluate to financially restructure the balance sheet."
New York state regulators have frowned on passive parent arrangements between hospitals. According to Mr. Toney, if a deal is struck with another hospital it would be a full-asset merger or strong affiliation.
Mr. Toney said Brookdale's goals are to improve clinical services and financial operations, and forge ties with "an institution that is financially stable on its own."
He believes a turnaround, merger or affiliation will need state aid to execute. "Without state support, it would be very difficult," he said. "There are multiple ways for funding to come through."
Maimonides Medical Center and Brookdale University Hospital and Medical Center are in the early stages of exploring a possible merger or formal affiliation, according to Crain's Health Pulse.
The potential for talks between the two Brooklyn-based institutions are the latest evidence of increasing consolidation among hospitals across the city. Last week, Montefiore Medical Center won a bid to acquire bankrupt New York Westchester Square Medical Center in the Bronx. New York-Presbyterian, meanwhile, is seeking to rescue New York Downtown Hospital in Manhattan. In Brooklyn, Interfaith Medical Center filed for bankruptcy in December as a prelude to merging with the Brooklyn Hospital Center.
On Monday, executives from Maimonides visited 530-bed Brookdale to perform due diligence on its finances and operations. "Yes, we are taking a hard look at it," said Pamela Brier, Maimonides' president and chief executive officer.
After Pulse first broke the news Wednesday morning, Ms. Brier told hospital executives in a memo that Maimonides "is in the early stages of an in-depth review of Brookdale's plans to be self-sufficient. After that, we will see what the next steps are. While we may consider an affiliation of some sort, we are not in merger talks, nor do we plan to use Maimonides assets to stabilize Brookdale."
She said Maimonides would be holding town hall meetings in the near future to provide more details.
Maimonides is profitable. Brookdale, however, is in poor financial shape and targeted by the state for intervention. Brookdale, which has millions of dollars in debt on its books, is likely to declare bankruptcy in the coming months to wipe its balance sheet clean, prepping itself for a suitor just as Interfaith did.
A Brooklyn task force convened by the state's Medicaid Redesign Team recommended in November 2011 a course of action for Brookdale. It said Kingsbrook Jewish Medical Center and Brookdale should join forces, with Kingsbrook in charge of creating an integrated health system with Brookdale through a common active parent or other governance structure.
But first Brookdale had to sever operational and financial ties with the MediSys Health Network, a company that had provided management and other services to Brookdale since 2000. MediSys also had run Peninsula Hospital in Queens, which closed last year.
To execute the state's restructuring recommendations, Brookdale's board last April hired crisis management and restructuring firm Grant Thornton. It named Mark Toney as Brookdale's president and chief executive officer. (Mr. Toney subsequently left Grant Thornton to co-found ToneyKorf Partners, but remains Brookdale's president and CEO.) In September, Mr. Toney announced Brookdale had disentangled itself from MediSys.
"We are very interested in Maimonides and exploring all options available to us," said Mr. Toney.
Whether the due diligence will lead to a deal with Maimonides remains to be seen. Maimonides could reject the plan, or, yet another hospital could engage in talks with Brookdale. NYU Langone Medical Center and Continuum Health Partners were in merger talks last year, until another suitor, Mount Sinai Hospital, replaced NYU Langone at the negotiating table.
Mr. Toney projects that Brookdale will break even in 2014, but bankruptcy "is something Brookdale must completely and fully evaluate to financially restructure the balance sheet."
New York state regulators have frowned on passive parent arrangements between hospitals. According to Mr. Toney, if a deal is struck with another hospital it would be a full-asset merger or strong affiliation.
Mr. Toney said Brookdale's goals are to improve clinical services and financial operations, and forge ties with "an institution that is financially stable on its own."
He believes a turnaround, merger or affiliation will need state aid to execute. "Without state support, it would be very difficult," he said. "There are multiple ways for funding to come through."
