2001-06-23 / Front Page

St. John’s Hospital Resuscitated

By Gary G. Toms

Rumors of St. John’s Episcopal Hospital’s death have been greatly exaggerated. Within the last year and a half, the hospital, located in Far Rockaway, has experienced a tremendous turnaround, from the brink of bankruptcy to financial stability.

In April, St. John’s Episcopal Hospital in Far Rockaway received a three-year accreditation from the Joint Commission on Accreditation of Healthcare Organizations, which concluded that the hospital was meeting all standards.

"There was a lot of fear in the air about what was going to happen next. Many people were being let go from their jobs, and no one knew who would be the next to go," states Sandra Bacchus, a registered nurse who has been employed with the hospital for 14 years.

Now, almost two years later, the fears have subsided, and the staff, management and community leaders are breathing a sigh of relief and feeling a sense of optimism.

The transformation is due in large part to Episcopal Health Services, or EHS, which is based in Bethpage, Long Island. Initially, the organization filed for bankruptcy protection under Chapter 11 back in November 1999. At that time, they owed $150 million in unsecured debt and it was losing $3 million a month at St. John’s Episcopal Hospital in the Smithtown area.

According to Claudia Hutton, spokesperson for the state Dormitory Authority, which is a principal creditor of EHS, "This was the largest bankruptcy case for a nonprofit health-care system in New York State."

Things began to turn around in December, and EHS was able to emerge from bankruptcy by acquiring $93 million to pay creditors by selling a number of their properties, including the St. John’s Episcopal Hospital in Smithtown.

Orris G. Walker, the EHS board chairman, and bishop of the Episcopal Church’s Diocese of Long Island states, "EHS was able to reduce its debt to $40 million, which is being repaid over four years as part of a reorganization plan. EHS has also reported a $3 million gain for the first four months of this year at St. John’s in Far Rockaway, along with other EHS properties throughout Queens and Brooklyn."

When explaining the cause for the bankruptcy, Walker said the hospitals had depended on state funds to keep them functional, and they had no experience on how to manage and operate in the current market.

Walker also credits the recovery to the work of Kurron Shares of America Inc., which is a Manhattan based health care management and restructuring firm that was hired by EHS. "They were able to bring together some seasoned professionals who examined the situation and provided strong leadership," said Walker.

"The restructuring plan for the hospital included shortening the lengths of stay, closing some nursing units, improving the billing system, leaving vacancies unfilled, doubling some responsibilities and other cost-efficient changes. "The best part about all of this is the fact that we were able to accomplish these things without sacrificing patient care," says Ronald Weitz, who is a principal of Kurron.

Gerard Nordenberg, vice president of Local 1199 of the Health and Human Services Employees Union, claimed that there was concern with some union members that their contract could have been wiped out from the bankruptcy, but the union was able to keep all of its bargaining terms and conditions.

Lew Simon, the Democratic district leader of the 23rd Assembly District, responded to these developments by saying, "For the first time they seem to care about Rockaway. We have always been a cash cow for them, and they milked it and sent the money to Long Island. St. John’s had a bad reputation because morale was low and people were on the verge of losing jobs. Now that things are on the upswing, it all looks very good, and we are very pleased with the outcome."

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