The pressures facing Interfaith—hefty debt, empty beds and patients who are healthier than acutely ill hospital patients elsewhere—have put hospitals out of business across the country. An analysis of hospital finances reported to Medicare, published in 2012 in the Journal of Healthcare Finance, singled out hospitals with high debt, low occupancy and less acutely ill patients as more likely to close.
The financial strain will likely intensify as pressures to reduce unnecessary hospital care mount and insurers squeeze reimbursement for hospitals that inefficiently deliver care.
The loss of a safety net hospital often leads to some patients finding nearby facilities overcrowded. “If there's going to be a closure, you still have patients that were being treated by that facility,” said Gloria Bazzoli, a professor of health administration at Virginia Commonwealth University who has studied hospital closures. “The question becomes: What are you going to do with that volume?”
Interfaith declared bankruptcy in December 2012 after years of running in the red. Its struggle to survive has led to numerous plans for restructuring, a failed merger proposal and a recent unsuccessful attempt at mediation among creditors, employees and management.
It's not the only hospital in New York City threatened with closure. Andrew Cuomo, the state's governor, cautioned federal officials last May that as many as four Brooklyn hospitals may have to close. The state is seeking $10 billion from the federal government to invest in primary care, public health and to stabilize its other safety net hospitals in exchange for adopting reforms.
The hospital, which listed about $200 million more in debt than assets in its December 2012 bankruptcy filing, primarily treats Medicaid and uninsured patients in its central Brooklyn market, where 31% of residents are poor by federal standards. Its losses since entering court have totaled $34.3 million through November last year.
Its precarious finances were singled out even before its Chapter 11 filings by Berger's task force, which was assigned to review Brooklyn's health system under a sweeping statewide Medicaid reform effort. The group found an estimated 15% of admissions for medical care and surgery were avoidable and the borough has a higher rate of hospital admissions that could be avoided with preventive care and disease management.
The report concluded that the borough needed as many as 1,235 fewer hospital beds. It called for a merger of Brooklyn Hospital Center, Interfaith Medical Center and Wycoff Heights Hospital, another borough provider.
Interfaith was scheduled to close Jan. 7, with a gradual shutdown scheduled to start in late December. The New York State Department of Health extended a last-minute pledge of $3.5 million to keep its doors open until February, said spokeswoman Melissa Krantz. The hospital is expected to receive a second installment that will hold off closure until March, she said.
Krantz said the hospital's financial fortunes have worsened under the state's Medicaid reform efforts, which have capped the state's spending on safety net insurance.
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