2011-08-12 / Editorial/Opinion

Why Not Bankruptcy Instead Of Closure?

There are several troubling questions arising from the plan to close the Peninsula Hospital Center, a vital link in the wellbeing of Rockaway residents. Several years ago, St. John’s Episcopal Hospital in Far Rockaway went through many of the problems faced today by PHC. Taken over by the Episcopal Health System, the hospital filed for bankruptcy and was reorganized under a court master. The hospital spent more than a few troubling months before sound fiscal management and an infusion of money put it back on track and it came out of bankruptcy as a strong community organization. Why not the same for Peninsula? When we broached the question to a vice president for MediSys, the giant healthcare company that took over PHC two years ago, the answer we got was a glib one. “We didn’t go the bankruptcy route because then all the money would have gone to the lawyers,” the spokesperson said. We have been told by insiders that bankruptcy, which would have kept the hospital open and allowed the great majority of staff members to keep their jobs, was considered and rejected because moving in that direction would have meant the loss of a great deal of money to two of the institutions involved – MediSys and Local 1199, the union representing the workers. One insider who called The Wave to charge that the union cares more for the money owed to it by the hospital than its workers said that the union would lose half of the $30 million owed to it by PHC should the hospital center go into bankruptcy. By closing the hospital and forcing it to sell off all of its assets, the source says, the union will probably recover the full $30 million it is owed. Of course, that comes at the cost of some 1,000 jobs. The same seems to be true of MediSys. The nursing home beds adjacent to the main hospital building are a valuable asset because the number of beds citywide is restricted by the state. Our source said that with the hospital closed, they become a moneymaker for their owner. The state should probe those allegations before allowing the hospital to be closed. As one staffer said this week, however, the state does not seem to care about Rockaway. It seems to be in a rush to close down PHC.

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