By: Daniella Doria
The biggest hospital in Brooklyn is in danger of closing, according to an exclusive report by The New York Post. Nolan Hicks reports that Maimonides Hospital lost $145 million dollars in the past year. The hospital has also defaulted on a large portion of its debt.
The amount of cash on hand at the end of 2021, $148 million, means that Maimonides only has enough funds available to last another year. Independent auditors of the hospitals finances is quoted as saying, “these conditions raise substantial doubt regarding the Medical Center’s ability to continue as a going concern within one year after the date these consolidated financial statements are issued.”
The report continues, “the Medical Center’s results of operations have been negatively impacted by the persistent pressure of healthcare payment reforms enacted in recent years as well as changing patterns of healthcare utilization and the COVID-19 pandemic. “This challenging operating environment has had a detrimental effect on both the inpatient and outpatient segments and its providers, resulting in losses from operations, cash outflows from operations, and violations of financial debt covenants.”
The New York Post exclusive report states that, “the auditors found that the hospital managed to negotiate new arrangements for those loans to avoid formally defaulting on its debts, but the 52-page report dated Aug. 26 from accounting firm Price Waterhouse Cooper highlights just how precarious Maimonides’s position is currently.”
Nolan Hicks writes the torrent of red ink comes as the hospital’s management and southern Brooklyn power brokers are engaged in a bitter feud over the complex’s future amid mounting complaints about poor care, dilapidated conditions and excessive executive compensation.
The hospital’s top boss, CEO Kenneth Gibbs, saw his compensation nearly double in just one year, from $1.8 million to $3.2 million in 2020 — even as the financial report obtained by The Post shows the hospital posted a overall $16 million loss for the year.
A member of the coalition to Save Maimonides issued a statement saying “Reiner said state officials should put Northwell Health — one of the state’s largest hospital networks, which is based on Long Island — in charge of managing Maimonides. “
The two entities already have a partnership, but the relationship is limited in scope and the two remain independent of each other.
Maimonides is ‘safety net’ hospital — meaning most of its patients are either uninsured or rely on Medicaid, which pays far less than private insurance for procedures, meaning the hospital runs on narrow margins in the best of times.
That is compounded by its status as one of New York City’s last remaining major hospitals not owned or tightly integrated into a major system, like NYU-Langone or Columbia-Presbyterian.
That means it alone carries the costs of major back-office operations like billing and running its computer and records systems.