Dr. Dennis Greenbaum spent 40 years working at St. Vincent’s, starting as an intern and moving up through the ranks to resident (interrupted by two years as an army doctor in Vietnam), critical care specialist, chief of critical care medicine and finally chair of St. Vincent’s department of medicine. He has lived in the Village for close to 30 of those years, and all three of his children were born at St. Vincent’s.
In an interview with WestView, Dr. Greenbaum offered a post-mortem on his longtime professional residence. He discussed what went wrong and spoke of the need for a thorough investigation of the hospital’s demise — and the possible role played by vested interests — in order to bring closure to this traumatic chapter in people’s lives.
Dr. Greenbaum describes the 10 years between the creation of the St. Vincent’s Catholic Medical Center (SVCMC) system in 2000, its 2005 bankruptcy, and its final closure in April 2010 as “a perfect example of a roller coaster.”
Before it joined SVCMC, St. Vincent’s had cash reserves of $200 million. The merger that created SVCMC united St. Vincent’s, six other Catholic hospitals, a number of nursing homes, home-health care agencies and federal health care contracts under one umbrella. The move was seen as a way to consolidate resources and create money-saving synergies. Instead, it was a colossal failure.
Saddled with too many beds and too many uninsured patients (in 2004 SVCMC provided $104 million in charity care), the medical center’s debts rose and its revenues fell. It was forced to close three hospitals and sell three others in Brooklyn, Queens and Staten Island. The catch, though, says Dr. Greenbaum, was that “the buyers made it clear that the only way they would take over these hospitals is if we assumed all their debt.” At least four of the closed or sold hospitals were also self-insured for malpractice, which meant that SVCMC “had to put a lot of money aside to cover those hospitals’ malpractice suits, even after they closed,” says Dr. Greenbaum. These failures overshadowed the profitable components of SVCMC, including its nursing homes, home-health care agencies and federal contracts.
By the time it filed for bankruptcy in 2005, not only was St. Vincent’s $200 million treasure chest gone, but SVCMC’s debts totaled close to $400 million. Although the state had bailed out other hospitals, it remained on the sidelines, in part due to its own financial woes. This left SVCMC in the hands of private creditors GE Capital and TD Bank, with an agreement to pay a steep approximately 90 cents on every dollar of debt. When the medical center emerged from bankruptcy in 2007, it was $700 million in debt, and when SVCMC filed for bankruptcy again in April, its debt topped $1 billion. Dr. Greenbaum believes that a very substantial portion of that debt was accrued by covering the liability of the closed and sold hospitals.
Mistakes were made, but Dr. Greenbaum does not see the debacle as a case of St. Vincent’s Hospital’s board, top management and the SVCMC bankruptcy team “trying to steal from a failed institution,” noting, “a lot more has to be known about this before we can attribute that to them. There’s a difference between incompetence and being faced with such an astronomically difficult situation that you don’t succeed.”
Referring to a freedom of information lawsuit filed in New York State Supreme Court by attorney Yetta Kurland on behalf of The Coalition for a New Village Hospital, and its uncovering of expenditures such as a nearly $300,000 golf outing and executive salaries totaling in excess of $10 million a year, Dr. Greenbaum cautions against rushing to judgment. “What was the revenue of the golf charity event?” he asks. “If it made more than it cost, then it was successful.” As for individual executive compensations of over $1 million annually, he says, St. Vincent’s former CEO Henry Amoroso and his executive team contributed 15 percent of their salaries to SVCMC, and noted that Amoroso’s salary, compared to other hospital CEOs, “was among the lowest in New York City.”
Putting aside the mistakes of the past, Dr. Greenbaum says the need for a new hospital on the West Side is urgent. He hopes that factional bickering over whether a needs assessment is necessary or not is put aside, and the city and state focus on where the new hospital should be built. “The city should have a plan,” he says. “This is not the 1800s. We know what our population looks like, and you don’t just take a hospital out.” With three hospitals on the East Side and none on the West, he asks, “Wouldn’t it have made more sense to figure out a more comprehensive plan, a way to have one of the profitable East Side hospitals provide their services to the West Side?”
Moving on is important, but Dr. Greenbaum would also like to see some serious questions about St. Vincent’s demise answered. Most pressing, to his mind, are (1) Why did the state sign off on a bankruptcy that left SVCMC in debt for much higher than what it started with, agreeing to the unfavorable terms of approximately 90 cents on the dollar? (2) What was the debt contribution of the other member hospitals and agencies of SVCMC versus St. Vincent’s? and (3) What external pressures were at play in the closure? Who stood to gain by it?
A number of companies could benefit, including Beth Israel’s parent organization, Continuum Health Partners. Earlier this year, Beth Israel was poised to take over St. Vincent’s and create an urgent care center. New York State Health Commissioner Richard Daines, regarded as the invisible puppet master behind this drama, is another figure many have deemed worth scrutinizing. Daines is the former CEO of St. Luke’s-Roosevelt Hospital Center, which, like Beth Israel, is part of Continuum Health Partners.
Answering these questions, says Dr. Greenbaum, will help provide “closure” to the shell-shocked St. Vincent’s employees who found themselves without jobs less than a month after hearing the hospital was shutting down forever. Without this kind of closure, says Dr. Greenbaum, “They’re going to suffer from post-traumatic stress syndrome.”
Next month: Dr. Greenbaum discusses the experiences of former St. Vincent’s doctors who have moved on to other jobs and the difficulty of replicating the various services that St. Vincent’s provided.