Friday, December 7, 2012

CM James Comments on Interfaith Medical Center Hospital Recently Announced Plans to Declare Bankruptcy If Funding Is Not Secured

 DECEMBER 3, 2012

Contact: Aja Worthy-Davis (212) 788-7081

Council Member Letitia James Comments on Interfaith Medical Center Hospital Recently Announced Plans to Declare Bankruptcy If Funding Is Not Secured 

(New York, NY)— On Sunday, December 2, 2012, officials representing Interfaith Medical Center announced plans for the hospital to declare bankruptcy if necessary funding is not secured. Interfaith Hospital, which provides service to the Bedford-Stuyvesant and Crown Heights communities, has experienced significant financial hardship in the past few years, and has depended heavily on New York State aid.

In January 2012, the Medicaid Re-design plan (Berger Commission report) laid-out a number of existing issues in Brooklyn hospitals, and placed the bulk of the blame on hospital boards and management. The report found hospital boards failed to properly evaluate financial and clinical performance, or set strategic goals. In response to the findings, Wyckoff Hospital, Interfaith Medical Center, and Brooklyn Hospital Center (three of the hospital identified as ‘vulnerable’ in the report) seeked to agree to terms that would initiate a merger. Interfaith Hospital has expressed their interest in reconfiguring organizational operations to address current issues. However, Interfaith was not able to establish a reconfiguration plan that allowed them to maintain control over their functioning and leadership, and officials are deeply concerned that a merger that effectively folds one hospital into another will lead to the closure of Interfaith and the loss of those health resources in the Central Brooklyn community.

Interfaith needs New York State to guarantee an estimated $20 million in what is called ‘debtor-in-possession financing’ to underwrite its operating costs during the reorganization. According to media reports, hospital officials have stated that the State Dormitory Authority, which holds $130 million of the hospital's debt, refused to provide the financing unless Interfaith would first sign an agreement to merge with Brooklyn Hospital.

“New York State needs to step up and secure the $20 million needed to guarantee another year of health services for Bed-Stuy and Crown Heights residents,” said Council Member Letitia James. “Under the leadership of Governor Cuomo, I believe a merger that incorporates the vision of Interfaith can be established. It is imperative that we move towards that goal to save this comprehensive hospital, and the 1,600 jobs that would otherwise be eliminated.”

New York State requires vulnerable hospitals seeking to apply for public funding or merge to sign a memorandum of understanding (MOU) outlining the terms of the agreement.


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