Since 2000, 19 New York City hospitals have closed. Dr. Kenneth Davis, Mount Sinai Health System's president and chief executive, doesn't want to be responsible for the loss of No. 20, he said in an interview with Crain's on Wednesday.
Davis and Mount Sinai said Wednesday they will restructure Mount Sinai Beth Israel and invest at least $550 million to increase the hospital's outpatient services while cutting 89% of its inpatient beds. The restructuring will last through July 2020. The plans will be financed with cash, not debt, Davis said.
Early press reports suggested the hospital would close.
“Nobody here is closing the doors, taking away the keys, and telling everyone who is employed there, they're no longer employed there, and telling patients to find another place,” Davis said in the telephone interview, exasperated at the confusion about his plan. “That's been the model of the 19 other hospitals that have closed before us [since 2000]. This is not a closure. That's why we call it a transformation. That's why it's taking four years.”
He said efforts are underway to preserve about 4,000 union jobs by retraining and redeploying workers to better meet the needs of the system. There won't be any administrative job cuts, either. Because the work will take place over four years, resident physicians will be accommodated as well.
“There will be no layoffs,” he said. “Mount Sinai has turnover of some 2,000 workers a year. With the turnover we have, plus the programs that we're building, we are confident that we will be able to find jobs for all the employees, particularly because this is such a gradual transition.”
Beth Israel, founded in 1889 and located in the Gramercy section of Manhattan, just east of Union Square, was acquired by Mount Sinai in the 2013 combination of Sinai and Continuum Health Partners. Beth Israel and its affiliates lost $115 million in 2015, an enormous sum even when compared with New York City's most troubled hospitals. Davis said those losses were related to an abundance of empty beds at the facility and a money-losing strategy for treating Manhattan's mentally ill.
“It's an old facility with old infrastructure that needs to be rebuilt to meet the needs of the community,” Davis told Crain's.
The aging hospital with its 672 non-behavioral care beds will be replaced with a brand-new 70-bed hospital and emergency room. Beth Israel's separate 153-bed Bernstein Pavilion behavioral care facility will remain open. Those changes are consistent with current trends in the industry that are shifting more care to lower-cost outpatient settings, away from expensive hospitals. Davis believes, if successful, Mount Sinai can be a model for its peers as they pursue transformations of their own.
Only 353 of Mount Sinai Beth Israel's 672 non-behavioral beds are currently available for use, said a hospital spokeswoman. Davis, a psychiatrist, said building a robust ambulatory care network of doctors' offices, surgery centers and mental-health services is key to Mount Sinai providing better care to city residents.
He said Manhattan currently has more than enough beds, with six per 1,000 people. The comparable rates are 2.3 for the U.S. and 3.0 in the rest of the boroughs plus Westchester combined.
Mount Sinai will spend $85 million to expand outpatient mental-health care, an urgent need for the city, said Davis.
“We have more people with mental illness incarcerated than in hospital beds, more on the street than in hospital beds,” said Davis. “The mental-health system is failing.”
The new Beth Israel hospital will preserve 35 operating and procedure rooms and a network of 16 physician practices with more than 600 doctors as part of an entity it will call Mount Sinai Downtown.
Judy Wessler, a community health advocate and the former director of the Commission on the Public's Health System, said she's not convinced Mount Sinai Beth Israel will be able to offer the local community the same level of care once the hospital moves.
“In a perfect world, I might like this plan,” said Wessler. “It's not a perfect world.”
Absent from Mount Sinai's announcement was any support from the New York State Nurses Association.
The closures of St. Vincent's Hospital in Greenwich Village in 2010 and Brooklyn's Long Island College Hospital in 2014 were chaotic, with community leaders, politicians and unions fiercely opposing the plans, which led to substantial job losses and reduced medical services in those neighborhoods. Davis said the closure of St. Vincent's, less than a mile away, hasn't resulted in a rush of patients needing care at Beth Israel.
“After St. Vincent's closed, the occupancy rate in our hospitals in the last couple of years has actually decreased,” he said. “We haven't had this demand of people going to the hospital. We're starting to manage care as we should. We're decreasing utilization of hospitals.”
Rising real estate prices in the Gramercy areawill give the Mount Sinai system a hefty return on Beth Israel's well-placed real estate. Gilman Hall, a 24-story residence for medical residents at East 17th Street and First Avenue, could fetch as much as $80 million, according to a source familiar with the property. Resident physicians were pleased to be moving out of the aging building. Mount Sinai will market its main hospital property, which Davis values at about $600 million.
"Mount Sinai CEO says 'no layoffs' in the rebirth of Beth Israel" originally appeared in Crain's New York Business.