To be Acquired by Montefiore Medical Center
Another two New York hospitals have filed for bankruptcy protection. Sound Shore Health System filed for Chapter 11 bankruptcy on May 29, 2013 in the US Bankruptcy Court for the Southern District of New York (White Plains). The bankruptcy is part of a plan for another facility to purchase the troubled health system.
Sound Shore, which operates two hospitals, will be acquired by Montefiore Medical Center. Montefiore’s deal still need to get regulatory approval and is pending the bankruptcy proceedings. Both sides say they expect the purchase to happen by the end of the year.
Sound Shore Health System runs Sound Shore Medical Center and Mount Vernon Hospital. During the bankruptcy and purchase by Montefiore, both hospitals will remain open. In an official statement on the bankruptcy, Sound Shore Health System announced it “will provide uninterrupted healthcare throughout the sale period and patient treatment and care will not be impacted.” It continued by saying that “doctors, nurses and staff will continue serving patients without impact on day-to-day operations, and SSHS will continue to operate as a not-for-profit hospital system, providing treatment to all members of the community regardless of their ability to pay.”
Why Did Sound Shore File for Bankruptcy?
If Montefiore Medical Center, a Bronx based system with four hospitals, was planning on purchasing Sound Shore from the beginning it begs the questions why the need to file bankruptcy. The answer is pretty simple.
The bankruptcy filing is basically a reorganization for Sound Shore Health System. It will allow Montefiore Medical Center to take over assets while not being stuck with all of its debts. “You want to have a plan to emerge from a reorganization with a healthier balance sheet,” says Kevin Dahill. Kevin is the head of the Northern Metropolitan Hospital Association. He explains that the court will deal with the liabilities of Sound Shore, allowing the purchase to go more smoothly.
Records show that Montefiore earned a profit in 2011 of $43 million based on a revenue of $2.6 billion. Both Sound Shore Medical Center and Mount Vernon Hospital have had years of bad finances, but were doing better more recently. Sound Shore had deficits running as high as $16 million in 2007. In 2010 it had a surplus of $12 million. Mount Vernon also had years of deficits but showed a profit of $5.7 million in 2010.
Earlier this year, Montefiore purchased a smaller facility, Westchester Square Medical Center. The acquisition was approved by a bankruptcy judge in January. Montefiore runs four hospitals with almost 1,500 beds, making it the largest facility in Westchester County, New York.
Earlier this month, Sound Shore was looking to merge with the Westchester Medical Center based in Valhalla, NY, an apparent attempt to stave off bankruptcy. However, negotiations failed to reach an agreement.
“This is the right next step to deliver on our commitment to provide high quality, accessible and affordable healthcare,” says John Spicer, President & CEO of Sound Shore Health System. “ Our mission is strong and our dedication to patient care is unchanged. We are fortunate to have Montefiore as a partner because of their clinical excellence, commitment to community and ability to provide the best care at Sound Shore and Mount Vernon hospitals over the long run.”
About Mount Vernon Hospital
As part of the Sound Shore Health System, Mount Vernon Hospital is a community-based teaching hospital founded in 1891. Mount Vernon, a 196-bed facility, provides inpatient, critical care and ambulatory services. The Beale Chronic Wound Treatment and Hyperbaric Center is based at Mount Vernon.
About Sound Shore Medical Center
Also a part of the South Shore Health System, Sound Shore Medical Center is based in southern Westchester, NY. Sound Shore is a 252-bed community-based teaching hospital Founded in 1892, South Shore offers primary, acute, emergency and long-term health care. It is a major teaching affiliate of the New York Medical College.
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