State Health Department Awards Grants to Ensure Access to Health Services in Queens

Extends Contract with 1199 SEIU to Provide Health Worker Job Placements in Response to Financially Troubled Caritas Health System

ALBANY, NY (Feb. 17, 2009) -- State Health Commissioner Richard F. Daines, M.D., today announced $18 million in grants to ensure that residents of Queens continue to have access to essential health care services and provide job placement services to workers displaced as a result of the bankruptcy-related closing of St. John's and Mary Immaculate hospitals, which make up the Caritas Health System.

"These grants will help other health care facilities in the area expand their capacity to absorb the patients previously handled by these two Caritas hospitals and assist workers in finding new employment," said Commissioner Daines.

The grants include $14.5 million to expand capacity at eight different health care facilities serving the Queens community and the extension of a State Department of Health contract with 1199 SIEU for the Displaced Workers Program that will make up to $3 million available for job counseling, placement, and workforce retraining for employees being displaced as a result of the two hospital closings.

Additionally, the State Department of Labor is providing assistance to impacted workers through its Rapid Response program, including information on filing for Unemployment Insurance, labor market information, re-employment services, assessment, job and career counseling, information on skills training and other services offered through the One-Stop system. The State Department of Labor staff from the One-Stop Center can also work with laid off workers who have chosen to pursue a training program to upgrade their skills by ensuring that such programs meet requirements under the unemployment insurance law allowing them to continue to collect their unemployment benefits while participating in training.

The State Department of Health has given contingent approval to a closure plan submitted by Caritas Health System, which filed for bankruptcy on February 6 following financial difficulties that extended over many years. Despite over $55 million in state loans to Caritas, the hospital system was unable to develop a viable plan for continued operation.

In addition to the $3 million contract extension to 1199 SIEU for health care worker job counseling, placement and worker retraining, the following grants have been awarded:

  • $3.6 million to Health and Hospitals Corporation of New York City (HHC) to expand inpatient capacity and emergency room services at its Elmhurst and Queens Hospital Centers.
  • $4.5 million to Medisys to expand inpatient capacity and emergency room services at its Jamaica and Flushing sites.
  • $3.5 million to North Shore LIJ to expand inpatient capacity and emergency room services at its Forest Hills and Franklin sites.
  • $2.7 million to Wyckoff Medical Center to expand inpatient and emergency room services.
  • $650,000 to the Joseph P. Addabbo Family Health Centers to maintain primary and preventative services at the St. Dominic's Health Care Center.

The State Department of Health has staff on site on a daily basis at both St. John's and Mary Immaculate hospitals to monitor the access and availability of services and ensure an orderly closure of the two facilities over the next several weeks. The State Department of Health is also conducting daily conference calls with the surrounding providers to monitor utilization of their services and ensure capacity at those facilities for emergency and acute care services.

Background

Caritas is a single corporation comprised of two Queens' hospitals -- St John's Hospital (SJH) and Mary Immaculate Hospital (MIH). In the Fall of 2006, Caritas came under the control of Wyckoff Hospital, a Brooklyn hospital located close to the Queens border. The Wyckoff and Caritas hospital corporations were controlled by Brooklyn Queens Health Care Inc (BQHC).

By February 2007, it became clear that BQHC had severe financial problems and would not make payroll without State Department of Health assistance. As part of an initial loan, the State required BQHC to hire consultants to review and make recommendations regarding the operations of BQHC.

The result of this review showed that BQHC was unable to process claims because of difficulties with its conversion to a new billing system. The report also noted that the Caritas hospitals needed a serious investment in capital and that even with this investment it was unclear if the hospitals could be viable for the long term.

The Department of Health (DOH) and the Dormitory Authority of the State of New York (DASNY) agreed to provide additional loans if BQHC hired a chief restructuring officer (CRO) with the power to operate the hospitals. The CRO and a team of staff began fixing the BQHC billing operation and solidifying the clinical care at the Caritas hospitals. At one point, both the CRO and the BQHC board thought it possible that the BQHC operation could be turned around.

By February 2008, it became clear to all parties that the Caritas hospitals were operating at chronic deficits that threatened their very existence and lacked the ability to generate the capital necessary for a self-sustaining system.

Discussions with other hospitals to find a financially stable partner for Caritas have been unsuccessful.

The financial situation at Caritas has continually worsened because of poor physical plant, declining patient volume, and lack of capital. The board decided it could not accept additional State loans because it had no viable plan to restructure the hospitals to turn them around. The hospitals declared bankruptcy on February 6 and have filed a plan to close both hospitals by February 27. The DOH is working with surrounding hospitals, nursing homes, and clinics to absorb the patients served by Caritas.

Anticipating bankruptcy, the DOH simultaneously began discussions with surrounding health care providers to assure access to care for the Queens community.

On February 13, 2009, DOH notified NSLIJ, HHC, Medisys, Addabbo Family Health Center, and Wyckoff of grant awards to expand access to emergency and primary care services and inpatient hospital services for the communities affected by the closures. The DOH continues to work with these providers in implementing the projects funded by the grants.

The DOH is also working with Caritas on a daily basis to implement a closure plan for the facilities, with closure set for February 28, 2009. Daily conference calls are conducted to monitor utilization, access and progress of the plan.