By Anna Gustafson and Stephen Stirling
Queens has lost three major hospitals in the last nine months, but while some contend a fiscal collapse and poor management were to blame, others say a tangled web of corruption and favoritism led to the deeply weakened state of the borough health care system.
Nine months ago Parkway Hospital in Forest Hills halted the majority of its operations after filing for bankruptcy and losing its state operating license. Three months later at the end of February, Caritas Healthcare Network, which owned St. John’s Queens Hospital in Elmhurst and Mary Immaculate Hospital in Jamaica, also filed for bankruptcy protection and began the process of liquidating its assets within weeks.
By April Queens had lost more than 600 hospital beds as swine flu swept across the borough, inundating emergency rooms with panicky parents flocking to medical facilities with their sick children.
But opinions on why the three hospitals were allowed to fail by the state differ dramatically.
Parkway Hospital closed in November after a protracted battle between the medical center’s leadership and the state Department of Health, but it is battling in court to reopen.
Borough President Helen Marshall’s office led a concerted effort to save St. John’s and Mary Immaculate from closure, and said ultimately funding was not available because Caritas Healthcare was deeply mired in more than $40 million in debt. Caritas is a nonprofit formed by Wyckoff Heights Medical Center, which purchased the two hospitals from the Saint Vincent Catholic Medical Centers of New York in 2006. But according to bankruptcy court filings, Caritas’ financial woes began “from the date of formation” and the group quickly spiraled into debt.
Marshall said although the Caritas board had taken steps to reduce its debt substantially since 2007, the state had been giving the facilities approximately $6 million every two weeks to keep them open. Interest from at least two potential bidders seeking to purchase the beleaguered facilities petered out and the hospitals shut down at the end of February.
“It was just too little too late,” Marshall said. “If the economic times weren’t so bad, I think they would have been saved.”
Neither Caritas’ officers nor its attorneys could be reached for comment.
The chief executive officer of Parkway Hospital, Dr. Robert Aquino, said though fiscal hardship played a role in the demise of all three hospitals the corruption scandal involving former state Assemblyman Anthony Seminerio should not be understated.
Seminerio pleaded guilty in June to illegally lobbying state health officials on behalf of a hospital TimesLedger Newspapers had identified as Jamaica Hospital of the Medisys Network.
Aquino said in an interview with TimesLedger that when he turned down Seminerio’s consulting services, the former legislator told him, “I will bury you.”
A federal indictment contended Seminerio subsequently told a state health official, whom TimesLedger identified as State Director of Operations for the Health Department Dennis Whaler, that he had a hatred for Parkway Hospital and Aquino. The indictment said he urged Whaler in a telephone conversation to intervene and stop a deal for Parkway to purchase at least one of the hospitals for $50 million from Caritas and that he would much rather see Jamaica Hospital “get it.”
“It’s mind-boggling,” Aquino said. “I couldn’t believe it when I read it. What’s even scarier is that people could have this kind of influence on public health officials. The only thing they’re watching is their own pockets.”
Aquino several weeks ago filed a civil lawsuit in federal court in Manhattan against Seminerio and Jamaica Hospital President David Rosen seeking $100 million in damages. The suit accuses Rosen of paying Seminerio for favorable treatment. It is Aquino’s second suit in less than a month, and he has also filed a lawsuit in Queens Supreme Court calling for the state Health Department to review reinstating the hospital’s operating license.
“It appears Rosen wanted Parkway to be put out of business,” Aquino said.
Jamaica Hospital would benefit from Parkway going out of business since it is located about 1 1/2 miles from Parkway and could take in the clients who would have gone to the Forest Hills hospital, Aquino charged.
A Jamaica Hospital spokeswoman said they would not comment on the lawsuit.
In 2004 and 2005 Seminerio tried to coerce the Parkway CEO into bribing him by paying for services from Seminerio’s firm, Marc Consultants, Aquino said.
“As I pushed off his advances, he got more and more belligerent and nasty,” Aquino said. “I knew this was not going to be a good outcome. It was obvious he’d be vindictive.”
While Aquino said Seminerio was pushing for Parkway’s closure, the CEO said he attempted with little success to enlist help from Queens elected officials to prevent his hospital from being shuttered.
“Nobody became a champion for us,” Aquino said.
Former Deputy Borough President Karen Koslowitz, now the current Queens president of community boards, took issue with Aquino’s assessment last week, saying Marshall “spoke to the governor many, many times protesting the closing of the hospital.”
A survey of several city and state politicians in Queens in the months following the hospital closures found few wanted to dwell on the topic.
Assemblyman Rory Lancman (D-Fresh Meadows) rejected the notion Jamaica Hospital had any interest in the hospitals and said it was time to move on.
“Arguing about that is like arguing over water under a bridge,” said Lancman, whose district includes Mary Immaculate. “As long as I’ve been involved, Mary Immaculate always had one foot in the grave. It wouldn’t make sense for Jamaica Hospital to buy either of them.”
Assemblywoman Nettie Mayersohn (D-Flushing), who serves on the Assembly Health Care Committee, said the state could have done little more to save St. John’s and Mary Immaculate.
“I don’t know what they could have done, frankly,” she said. “We put a lot of money into them and none of it seemed to prevent the closure.”
U.S. Rep. Anthony Weiner (D-Forest Hills) has said he tried to rally support in Albany for Parkway, which several candidates running for Councilwoman Melinda Katz’s (D-Forest Hills) seat have advocated reopening, including former state Assemblyman Michael Cohen, Albert Cohen and Mel Gagarin.
Aquino said Parkway could be up and running within a matter of weeks as the hospital’s equipment remains intact. Parkway is currently paying $400,000 a month to keep the hospital ready to reopen. The hospital continues to offer several of its centers, including the sleep disorders, wound care hyperbaric and diagnostic cardiology centers.
Meanwhile, both the St. John’s and Mary Immaculate hospital sites are expected to be sold at auction during the next few weeks.
But at least one private development firm, Hays Ventures, had been in negotiations to buy St. John’s and Mary Immaculate for three years but was rebuffed when Tom Singleton was named restructuring officer at the end of 2007 and negotiations broke down.
“When [Wyckoff Hospital President] Dominick Gio took over the hospitals, a number of times we thought we had a deal,” Hays Ventures Project Director Dan Panitz said.
North Shore Long Island Jewish Health Care System was also interested in purchasing at least one of the buildings, the borough president’s office confirmed, but negotiations fell through last winter.
Hays Ventures now has a bid in to purchase St. John’s, while Panitz said its plan will not reopen the hospital. The firm has a letter of intent from a “prominent, cash-strong medical facility” to rent a portion of the space, he said.
Aquino said he believes it was easier for Caritas to continue to ask state officials for funding than to sell the property or try to rehabilitate its finances while in Chapter 11 bankruptcy rather then ultimately deciding to seek liquidation.
“In retrospect I think what it meant was no one wanted to stop the gravy train,” he said. “It was just easier to keep asking for money. I mean, every two weeks they would go up to Albany and said we need $2 million for wages or what have you this week. They never once did not come back with that check.”
Reach reporter Stephen Stirling by e-mail at firstname.lastname@example.org or by phone at 718-229-0300, Ext. 138.