North General was
$200 million in debt

North General in NYC announces bankruptcy, set to close next week

June 30, 2010
by Brendon Nafziger and Heather Mayer, DOTmed News reporters

Although the answering service for North General Hospital in Harlem poignantly insists, "We are growing with our community," the hospital will close its doors next week as it transitions into an outpatient center and long-term care facility.

The financially troubled Harlem institution said it was filing for bankruptcy Monday, after it became clear the hospital would be unable to repay its staggering $200 million debt, a hospital spokesman told DOTmed News.

The 30-year-old North General will wind down operations Friday and stop inpatient admissions by July 6, becoming the second major New York hospital to close in as many months, after the storied St. Vincent's Hospital turned out the lights in April.

Thanks to a deal worked out by Gov. David Paterson, Mayor Michael Bloomberg and local representatives, the 190-bed North General is to be replaced by an outpatient center managed by the Institute of Family Health, according to a statement on Paterson's website.

The Institute of Family Health offers services in Manhattan, the Bronx and Mid-Hudson Valley and is a federally qualified health care (FQHC) provider. The institute also offers two free clinics to the uninsured.

The institute-run outpatient center, which will operate out of North General's former diagnostic and treatment center, is "going to be even bigger than a standard FQHC in terms of its scope," a North General spokesman said.

It's expected to treat approximately 80,000 people a year, delivering urgent care - treatment of minor scrapes and minor illnesses - primary care, mental health, dental health and school-based services.

Patients suffering emergencies will be directed to nearby hospitals, such as Mount Sinai, St. Luke's, New York-Presbyterian, Harlem and Metropolitan, according to the state government.

In addition, the city and the New York City Health and Hospitals Corporation (HHC) have worked with the governor, the Department of Health and North General to relocate more than 200 long-term acute-care beds and related services from the Coler/Goldwater Specialty Hospital on Roosevelt Island to Harlem.

HHC, with capital funding from the city, will also build a state-of-the-art skilled nursing facility to replace Goldwater's outdated facilities, according to Paterson's office.

FINANCIAL, EMPLOYEE WOES

North General, which has been in debt since its founding nearly three decades ago, blames its downfall on a weakened economy, lowered reimbursements, decline in state and federal funding, and, over the last two years, a drop in inpatient admissions.

"Given all that, it was decided this was the best possible outcome, given it was clear the hospital couldn't continue in its current form," the spokesman said.

Nonetheless, the fate of the hospital's 900-odd employees is uncertain, as the outpatient center is not expected to hire them all.

"Technically, as employees of North General Hospital, they will be laid off," the spokesman said. "A decent proportion - obviously things are still in flux - will be able to find employment with the new health care providers, and the hospital will be taking steps to provide every sort of support they can in terms of placement programs and reaching out to other New York health care providers within the area."

In an effort to fight for its members, the hospital's union, Local 1199 S.E.I.U., has filed unfair labor practice charges with the National Labor Relations Board against the institute on the grounds that refusal to hire all of the union's employees is a violation of federal labor law. According to the union's general counsel, federal labor law prohibits a successor employer from refusing to hire union members because it does not want to recognize the union, which is what the union claims the institute is doing.

In a statement e-mailed to DOTmed News, the institute said that the new health center's staff will include former North General employees who "meet requirements of the new positions." Interviews began Monday for "existing" North General staff who chose to apply for positions at the new center.

The institute did not return calls regarding employment specifics, including the charges filed by the union.

The union will try to find employment for its members, but spokeswoman Leah Gonzalez says it's going to be very difficult, as fewer and fewer hospitals are hiring.

With its closing, North General, founded in 1979 by Eugene McCabe and Randolph Guggenheimer, expects much of its medical equipment to be re-purposed for new services.