NYC’s Maimonides lost $145 million in 2021, pushing the hospital to the brink of collapse
One of Brooklyn’s largest hospitals, Maimonides Medical Center, is at risk of collapse after posting a $145 million loss last year and defaulting on some of its debts, according to annual financial filings obtained by The Post.
Documents show the sprawling hospital — so large its complex spans two neighborhoods — ended 2021 with just $148 million in cash, enough to last another year if the current rate of casualties continues.
The hospital’s financial situation is so precarious that its independent annual financial report, prepared by independent auditors and obtained by The Post, warned that « these conditions raise substantial doubt about the ability of the medical center to continue its activities in the year following the date of these consolidations ». the financial statements are published.
« Medical Center’s operating results were negatively impacted by continued pressure from healthcare payment reforms enacted in recent years as well as changing healthcare utilization patterns and the COVID-19 pandemic. 19, » the report said.
« This challenging operating environment has had a detrimental effect on both the inpatient and outpatient segments and its providers, resulting in operating losses, operating cash outflows and violations of financial covenants. »
Auditors found the hospital successfully negotiated new deals for the loans to avoid officially defaulting on its debts, but the 52-page report dated Aug. 26 from accounting firm Price Waterhouse Cooper highlights just how Maimonides’ current position is precarious.
The torrent of red ink comes as hospital management and south Brooklyn power brokers are engaged in a bitter row over the future of the complex amid growing complaints about poor care, dilapidated conditions and excessive executive compensation.
The hospital’s chief executive, CEO Kenneth Gibbs, has seen his compensation nearly double in just one year, from $1.8m to $3.2m in 2020 – even as the financial report obtained by The Post shows the hospital had an overall loss of $16 million for the year.
Complaints about care at the facility then exploded in July when five state lawmakers signed a letter calling for hearings into hospital operations, citing long wait times for care and a staff overwhelmed.
The battle took another turn in August when one of those lawmakers, Sen. Simcha Felder (D-Brooklyn), called one of the groups campaigning to overhaul hospital management — Save Maimonides — » not kosher ».
“The movement is not kosher. This is absolutely a smear campaign,” said Felder, whose district is strongly Orthodox and in which Maimonides is a major employer.
Allies of the current hospital management have also accused its critics of trying to take over the hospital.
Leading critics group Save Maimonides in turn accused Felder of caving in to pressure from hospital administrators and management, who donated to his campaigns.
« This revelation by one of America’s largest accounting firms that Maimonides is on the verge of bankruptcy is shocking but not surprising given the more than 2,000 complaints we have received, » said Coalition Co-Chair Mendy Reiner.
“New York State must step in to save this crucial hospital,” he continued.
Reiner said state officials should let Northwell Health, one of the largest hospital networks in the state, based on Long Island, manage 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 a « safety net » hospital, meaning most of its patients are either uninsured or dependent on Medicaid, which pays far less than private insurance for procedures, meaning the hospital operates with narrow margins at best.
This is compounded by its status as one of the last major New York hospitals not owned or tightly integrated into a major system, like NYU-Langone or Columbia-Presbyterian.
This means that it alone bears the costs of major back-office operations such as billing and the operation of its IT and registration systems.
A spokesperson for Maimonides said the casualty rate has slowed this year and hospital leaders hoped the funds Albany lawmakers have set aside to help struggling hospitals would help fill the gap.
« Thankfully, state leadership has recognized this issue and made Maimonides eligible to receive enhanced Medicaid reimbursements that will help alleviate the historic Medicaid funding shortfall, » a spokesperson said.
Maimonides is not alone in his struggles.
Financially-troubled Richmond University Medical Center on Staten Island recently rejected a plan to tie it into the Big Apple’s public hospital system to save it about $50 million a year.
Another Brooklyn hospital, Interfaith Medical Center in BedStuy, was recently consolidated into two other struggling hospitals from outside the borough — collectively now known as One Brooklyn Health — as part of a state plan to try to strengthen the borough’s health care system by cutting costs and cutting some beds.
This is at least the third time in the past five decades that Interfaith has been rescued by state officials.
The hospital navigated and emerged from bankruptcy in 2014 with a state-mandated management team and an injection of funding.
Interfaith was originally a system of two hospitals – St. John’s Episcopal Hospital, the survivor; and Brooklyn Jewish Hospital – which merged in 1982 in an effort to repair the failing finances of both institutions.
By 1989, Interfaith was broke again, and the block-sized Brooklyn Jewish Hospital was finally closed and converted into a massive affordable housing complex.