The Decline of St. Vincent’s Hospital

The Decline of St. Vincent’s Hospital
By ANEMONA HARTOCOLLIS
Copyright by The New York Times
Published: February 2, 2010
http://www.nytimes.com/2010/02/03/nyregion/03vincents.html?th&emc=th


For more than 150 years, St. Vincent’s Hospital Manhattan has been a beacon in Greenwich Village, serving poets, writers, artists, winos, the poor and the working-class, and gay people.

It has treated victims of calamities: the cholera epidemic of 1849, the sinking of the Titanic in 1912, the 9/11 attack and, just last year, the Hudson River landing of US Airways Flight 1549. The poet Edna St. Vincent Millay got her middle name from the hospital, where her uncle’s life was saved in 1892 after he was accidentally locked in the hold of a ship for several days without food or water.

But today the hospital is struggling, and last week, in what could mean the death knell of the last Roman Catholic general hospital in New York City, a chain of hospitals proposed to take over St. Vincent’s, shut down its inpatient beds and most of its emergency room services, and convert it into an outpatient center tied to hospitals uptown and on the East Side.

Gov. David A. Paterson’s office said on Tuesday the state was extending a $6 million emergency loan to help St. Vincent’s meet its payroll, an indication of how dire its finances had become.

How St. Vincent’s went from a cherished neighborhood institution to one threatened with extinction is a chronicle of increasingly troubled management whose problems were made worse by the economics of the health care industry, changes in the fabric of a historic neighborhood and the low profit potential in religious work.

It was once part of the Roman Catholic Church’s social and political network in New York City, a cradle-to-grave embrace of parishioners who were born in Catholic hospitals, educated in parochial schools, married in the church and given last rites by a priest.

Last week, a day after the announcement of the proposed takeover, members of the Sisters of Charity, the Catholic order of nuns that founded the hospital in 1849, gathered for a noon Mass at St. Vincent’s second-floor chapel and vowed to fight. “We are not going away,” said Sister Jane Iannucelli, vice chairwoman of the hospital board, standing in the light of stained glass windows.

“One of the things that’s so crucial to the Sisters of Charity is serving the poor,” she said.

It was that very calling, some industry executives suggested, that may have helped make the hospital obsolete.

“Helping the poor is indeed the mission and the cause célèbre,” said Kenneth E. Raske, president of the Greater New York Hospitals Association, a trade group. “Therein lies the dilemma.”

Other hospitals emphasize high-tech care and rush to invest in the fancy equipment and celebrity doctors that attract patients with the means to pay for them; St. Vincent’s sticks to its motto of “compassionate care,” rooted in its origins as a place that trained nurses and that was under the auspices of nuns.

As the Village changed, becoming home to more middle-class families, by many accounts St. Vincent’s failed to change with it. In 2007, several years after an ill-fated merger with other Catholic hospitals, St. Vincent’s management proposed selling off its maze of outdated buildings around Seventh Avenue and 12th Street to build a state-of-the-art high-rise building across the street, to be designed by Pei Cobb Freed & Partners Architects, famous for cutting-edge projects like the glass pyramid expansion of the Louvre museum in Paris and the John Hancock Tower in Boston.

But some said it was too late. In an indication of how St. Vincent’s reputation had fallen in the neighborhood, during a fierce debate over whether to demolish a low-rise Modernist building to make way for the new hospital, the actors Susan Sarandon and Tim Robbins suggested that St. Vincent’s no longer served the neighborhood well.

“I would not want to bring my children there,” Ms. Sarandon declared at a landmarks preservation hearing.

At the height of the AIDS epidemic in the 1980s, St. Vincent’s ministered to those affected, and was bursting at the seams. But by the 1990s, drugs and public awareness helped bring AIDS under control, and the Village’s wealthy newcomers were choosing other hospitals.

From 1996 to 2007, the most recent year for which figures are available, the number of patients the hospital admitted went down by 10 percent, while the rate for hospitals citywide was flat, state records show.

And its emergency room volume has been growing faster than the citywide rate, suggesting that it has the worst of both worlds — more emergency room patients and fewer inpatient admissions, which are where the money is.

St. Vincent’s is a major city contractor for homeless services, and hospital administrators said that homeless people from all over the city find their way there for treatment.

In short, many of the patients who frequent St. Vincent’s are part of the old Village rather than the new Village, as was clear from a tour of the emergency room last week. It was electric with activity, every bed filled. Many of the patients were elderly, from Chinatown, or grizzled remnants of the Village’s old working class. Nuns from Mother Theresa’s order hovered about.

The room, like other parts of the hospital, had a homey feeling, more like a place television’s kindly Dr. Marcus Welby would have taken his patients rather than the overly caffeinated environment of “House.”

“There’s a sense we’re here for the mission, and it truly permeates,” said Dr. Eric Legome, the chairman of emergency medicine.

Despite 62,000 emergency visits, nearly 1,800 births, almost 22,000 hospital admissions and 263,000 outpatient visits a year, according to St. Vincent’s officials, the hospital is bleeding red ink, and has been for years.

Hospital officials, who asked not to be named because of the sensitivity of negotiations with Continuum Health Partners, the chain that has offered to take over the hospital, said the hospital was close to having to declare bankruptcy for the second time since 2005. It is about $700 million in debt.

Officials blamed a high rate of poor and uninsured patients as well as cuts in Medicare and Medicaid and the hospital’s inability to negotiate favorable contracts with health insurance companies, claiming their fees were 30 percent below the market rate.

Catholic hospitals in some parts of the country continue to thrive, but the New York City hospital field is much different from what it was 100 years ago; New Yorkers with health insurance now can choose from a number of prestigious hospitals.

Student nurses being capped at St. Vincent’s in 1951. It is the last Roman Catholic general hospital in New York City.

To remain competitive, in 2000 St. Vincent’s merged with several other Catholic hospitals to form St. Vincent Catholic Medical Centers.

Along with the flagship hospital in the Village, it ran seven other hospitals: Bayley Seton and St. Vincent’s on Staten Island; Mary Immaculate, St. John’s and St. Joseph’s in Queens; St. Mary’s in Brooklyn; and St. Vincent’s Westchester, in Harrison, N.Y. It was also affiliated with St. Vincent’s Midtown, formerly St. Clare’s, in Midtown Manhattan.

The merger was conceived as a way to streamline management and give the hospitals pricing leverage, but it was troubled from the beginning. After closings and sales, the network was left with just one New York City hospital, the flagship; a psychiatric and substance abuse treatment hospital in Westchester; and several nursing homes and other outpatient facilities. Some of St. Vincent’s debt was inherited from the closed hospitals.

Over the last few years, St. Vincent’s has tried to polish its image, recruiting the Giants quarterback Eli Manning and former Mayor Rudolph W. Giuliani to raise money and attract customers.

It has traditionally been one of the beneficiaries of the Alfred E. Smith Foundation Dinner, an annual charity roast at the Waldorf-Astoria, where John McCain and Barack Obama traded jabs just before the 2008 election. The hospital’s chairman is Alfred E. Smith IV, a prominent Wall Street investment banker and the great-grandson of the New York governor who ran for president in 1928. Mr. Smith did not respond to a request for an interview.

In 2004, St. Vincent’s turned over management to Speltz & Weis, the first in a series of turnaround consultants. It paid the firms millions of dollars a year to run the hospital and hired their officials as hospital executives. The system filed for Chapter 11 bankruptcy protection in early July 2005, when it appeared, according to court papers filed by hospital creditors, that it would be unable to make its payroll.

In a lawsuit filed in 2007, some of the hospital’s creditors painted a picture of a hospital system trapped between unscrupulous consultants and a passive or gullible board. The lawsuit accused David E. Speltz and Timothy C. Weis, the hospital system’s former chief executive and chief financial officer, of delaying the bankruptcy organization while they and their consulting firm collected millions of dollars in fees.

The lawsuit accused them of hiring high-priced contractors and padding their fees, instead of using hospital employees to do work. And it says they leveraged their positions with the hospital to negotiate the sale of their consulting company to Huron Consulting Group, in Chicago, also a defendant in the case.

From 2004 until the lawsuit was filed, St. Vincent’s paid Speltz & Weis, which was based in New Hampshire, $30.8 million and Huron $1.2 million in fees and expenses, according to court papers.

The expenses included a personal membership in a private university club; trips to New York for spouses; hundreds of dinners in Manhattan restaurants’ opera tickets; groceries, dry cleaning and laundry bills; and travel and housing fees for consultants from outside New York, according to court papers.

Lawyers for Mr. Speltz and Mr. Weis did not return calls for comment. But they said in court papers that the creditors had written a “revisionist” history of events that unfairly blamed their clients for a bankruptcy that was actually caused by a $60 million shortfall in accounts receivable that had not been detected by auditors. Their firm had to bring in contractors for important jobs because previous St. Vincent’s managers had unwisely eliminated key positions, the lawyers said. The lawsuit is headed for mediation.

The current chief executive, Henry J. Amoroso, is its fourth since 2004. He did not respond to requests for comment. St. Vincent’s board announced last weekend that it had retained another crisis management firm, Grant Thornton.

Sister Jane, the vice chairwoman, acknowledged that the hospital was on the precipice. “We have had enough money to pay our salaries,” she said, but added, “The cash flow has gotten tighter and tighter, and yes, we are in a very vulnerable position.”

Last Thursday night, more than 500 people crowded into a basement meeting room at Our Lady of Pompeii Church on Carmine Street to protest the proposed takeover. One man, Mark Leonard, spoke of how a nurse offered to come to his house and baby-sit after he took home his very fragile twins from the St. Vincent’s intensive care unit.

“You guys must be exhausted,” he remembered the nurse calling to say. “You need a night out with your wife.”

Nancy Spannbauer, a program director for the Penn South senior citizens’ program in Chelsea, told of how she had been in the home of a 91-year-old woman a few days earlier while a doctor tried to get the woman to go to the hospital.

“Eventually she gave in,” Ms. Spannbauer said. “And she said, ‘Well, I suppose if I have to, I’ll only go to St. Vincent’s.’ ”



Colin Moynihan contributed reporting.