As Healthcare Finance News went to press, 160-year-old St. Vincent’s Hospital Manhattan was preparing to shut its doors for good.
By mid-April, the venerable 727-bed Greenwich Village facility had racked up more than $1 billion in debt, and was hemorrhaging $5 million to $10 million per month. The axe fell on 1,000 employees early last month, and the rest awaited the inevitable.
The board of directors of Saint Vincent Catholic Medical Centers voted to close the facility after a six-month long effort – and much public outcry – to save it.
St. Vincent’s has been called a “cherished neighborhood institution” in Greenwich Village, treating victims of the 1849 cholera epidemic, survivors of the sinking of the Titanic, and the wounded from the terrorist attacks of September 11, 2001.
The hospital has also been hailed for its commitment to the poor, and as well as to patients suffering in the early days of the AIDS epidemic.
But compassion is not enough to keep a hospital alive, no matter its history, mission or dedication to the community.
St. Vincent’s fell victim to an unfavorable payer mix. The hospital treated many Medicare and Medicaid patients, as well as an overabundance of people with no insurance at all – including homeless people from all over Manhattan.
That was, after all, the nature of the community the hospital served. Or at least it used to be.
Critics of St. Vincent’s say it dedicated too many resources to treating the wrong kind of patients. Emergency department volumes remained high at the hospital, but many of these patients fell onto the charity care rolls or, being under- or un-insured, contributed to the hospital’s bad debt.
As the average Manhattan resident grew wealthier, St. Vincent’s did not change it’s mission and cater to the kind of patient who could bring in revenue under our fee-for-service system: privately insured, willing to pay for expensive procedures.
Perhaps St. Vincent’s was mismanaged, but one might also see our flawed fee-for-service reimbursement system as a direct contributor to the hospital’s decline. An urban hospital serving a poorly insured patient population has little chance of success in these days of Medicare and Medicaid cuts.
The New York State Department of Health hopes to develop a new model of urgent care services in the Village. The state is soliciting grant requests from healthcare organizations to deliver urgent healthcare services on a walk-in basis in Lower Manhattan, including comprehensive ambulatory care, basic medical imaging, laboratory services, and the ability to provide rapid transit to full-service emergency rooms available for life-threatening conditions.
In the meantime, other Manhattan hospitals will absorb the ED patients that used to flock to St. Vincent’s. Early reports from the EDs at Beth Israel Medical Center and Bellevue Hospital Center indicate that the transition has already begun.
Sadly, the healthcare reform legislation passed by Congress will do little to save urban hospitals like St. Vincent’s. It would take a profound change to the way healthcare is paid for, and delivered, to make such institutions viable.
Until that happens, we could see more such hospital “deaths” in coming years.