Whether an operator is found depends on market forces and political muscle.
SUNY has never formally tried to find a buyer for LICH through a request for proposals or an auction run by an investment bank. Those procedures have been used by other financially troubled hospitals, often in bankruptcy proceedings. The most recent case is New York Westchester Square hospital, which auctioned itself to Montefiore Medical Center.
A SUNY spokesman said the hospital was preparing a request for interest that will be issued to potential players within the next week or so. It has not hired an investment banker or financial adviser for any formal bidding process at this time.
Previously, Downstate's president Dr. John Williams personally reached out to all the major hospital operators in the area "with no takers," said the spokesman. "The request for information is a more formal outreach."
The spokesman said in an email that SUNY saw no need to hire an investment banker at this point, "and there may never be a need for an investment banker because we don't know what we'll hear from outside parties."
Politics may play a role. State health officials often ask hospitals to step in to at least take a look at the financials of a struggling provider.
"The governor's office and the state health department are vital in providing the leadership to bring stakeholders to the table," said Jeffrey Ruggiero, an Arnold & Porter partner representing LICH doctors in a lawsuit filed on March 29, along with the New York State Nurses Association and 1199 SEIU Healthcare Workers East, in an effort to prevent LICH's closure.
"Suitors have waited on the sidelines to see if the view from Albany was to keep LICH open," he added.
In a statement, Dr. Williams said LICH remains a financial drain on Downstate's medical school. "We are withdrawing the closure plan so we can work with the state and other stakeholders on a sustainability plan for Brooklyn's only medical school and to ensure quality medical care throughout the borough. The current legal proceedings prohibit this dialogue," he said.
There is a temporary restraining order in place that prevents LICH's closure. A court hearing is set for May 29 in the lawsuit brought by LICH doctors and unions.
"This is an incredible victory for Brooklyn patients," said Jill Furillo, executive director of the New York State Nurses Association, which is fighting the closure. "We want to thank Gov. Cuomo for helping us find solutions to Brooklyn's healthcare crisis."
"State withdraws plan to close Brooklyn hospital" was originally posted in Crain's New York Business