New York hospital system files for bankruptcy

Some say the problems at the state's largest Catholic health system are reflective of struggles affecting all hospitals.

By Katherine Vogt, AMNews staff. July 25, 2005.

In what is being called New York's largest-ever hospital bankruptcy, Saint Vincent Catholic Medical Centers has filed for Chapter 11 protection, citing mounting debts and falling revenues.

The seven-hospital system, which runs dozens of other health care facilities in the New York area, announced the filing July 5. It said the goal of the bankruptcy was to give the system the time and means it needs to restructure its debt, operations and finances.

While the bankruptcy progresses, Saint Vincent has pledged to keep facilities open and operating. It also assured its nearly 2,500 physicians that it would "continue to invest in its physicians," maintain nursing levels, make capital investments, pay critical vendors and pay employed doctors.

In a written statement, Saint Vincent's president and chief executive, David Speltz, said the system voluntarily chose to file for bankruptcy because of several factors, including operating losses, debt levels, cash flow and accounts payable issues.

Others said the bankruptcy likely was fueled by broader problems in the hospital industry, including an increasing number of uninsured patients and declining reimbursements.

"Demand for services is increasing, facilities are aging, there are new technologies they need to purchase, and there is a lot of competitive pressure on the hospitals," said Richard Gundling, vice president of the Healthcare Financial Management Assn.