Interfaith Hospital Files for Chapter 11

The Interfaith Medical Center in Brooklyn, which serves over 125,000 patients a year, has filed for Chapter 11 bankruptcy protection, reported David Kene for the Amsterdam News. The hospital, which serves Crown Heights and Bedford-Stuyvesant, faced a $9.5 million operating loss last year, and the year before, a $55 million loss. Kene elaborates on the circumstances faced by the hospital.

Interfaith is one of four remaining hospitals in Central Brooklyn. With just 287 beds, it’s one of the smallest, but Interfaith employs over 1,600 people, making it one of the largest employers in Bedford-Stuyvesant and Crown Heights. What’s more, no other hospital in New York City takes in as many poor patients.

Its focus on the poor has been a core of Interfaith’s mission since it began in 1983 as a privately held joint collaboration between Brooklyn Jewish Hospital and St. John’s Episcopal Hospital (the building Interfaith now occupies).

Though Interfaith hospital will not close anytime soon, due to the fact that Chapter 11 processes may take well over a year to conclude, the threat of closure still looms over it.

Officials at Interfaith say they need between $10 million to $30 million to keep threats of closure at bay. However, the threat of closure originated in Albany, and when the very state attacks you, which state agency can you run to for help?

Interfaith president and CEO Luis A. Hernandez said the hospital, “was a victim of New York state’s drastic Medicaid reductions in 2010.” (Photo by David Kene/Amsterdam News)

The threat can be traced to the state’s capital, said Luis A. Hernandez, president and CEO of Interfaith, because state cuts on Medicaid hit the hospital hard.

“Unfortunately, our hospital was a victim of New York state’s drastic Medicaid reductions in 2010,” Hernandez said. “Because the people we serve are predominantly poor and fully 65 percent are dependent on Medicaid or Medicaid-managed care, we have had a unique deleterious financial challenge of being dependent on the state’s Medicaid reimbursements.”

Despite reaching out to state officials, help appears hard to come by for the funding-strapped hospital. Interfaith also wrote to Gov. Andrew Cuomo, who has his sights set on “on Interfaith merging under the umbrella of the Brooklyn Hospital Center, nearby in Fort Greene.”

The move would force Interfaith to shape up the way Brooklyn Hospital did when it went into bankruptcy. Yet, while the short-term goal may save the state from giving the up to $30 million directly to Interfaith, Brooklyn Hospital is set to receive that exact amount—$30 million—from the state to merge with Interfaith.

The story adds that politicians at state and national levels also played a role in the hospital’s troubles.

Since Interfaith serves a largely Caribbean-American and poor population, one can easily take a panoramic view of the fallout. From the vantage of community-level developments, news of Interfaith’s upheavals are the inevitable collateral damage that resulted from the recent efforts to dismantle and restructure Medicaid by upper-level legislatures in Albany and D.C.

Medicaid is the joint federal-state health insurance program for low-income men, women and children. Because of its purported propensity to bankrupt the nation, the future of this 45-year-old program remains uncertain, as debates over it roar in our nation’s capital and echo throughout the union, state by state.

With a mandate to absolutely balance budgets regardless of consequence, the New York State Legislature in 2010 decided to deal with the threat of the state hemorrhaging cash by decidedly reducing state Medicaid spending for New Yorkers bleeding for real.

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