North Shore-LIJ, Maimonides Bid for LICH

Crain’s Health Pulse
March 21, 2014
North Shore-LIJ, Maimonides Bid for LICH

Two new players—a vast health care system and a Brooklyn hospital—bid this week for Long Island College Hospital. SUNY Downstate set a deadline Wednesday for proposals in a second round of bidding for the Brooklyn hospital's Cobble Hill campus. The North Shore-LIJ Health System, Maimonides Medical Center, real estate developer Don Peebles and ProHealth Care Associates partnered to submit a bid, Crain's has learned.

The group's proposal would provide comprehensive care at LICH, but not a full-service hospital.
After a lawsuit from community groups and unions, SUNY Downstate reopened the bidding process under a settlement that gave supporters of LICH a voice in the selection of the winning proposal. Under the settlement, bids were due Wednesday and would be public within five days.

North Shore-LIJ and Maimonides are newcomers to the bidding process, as neither submitted a proposal during the controversial first round of bids by SUNY. But in one of the oddest twists to the lengthy LICH saga, last month North Shore-LIJ executives were shocked to read media accounts that the hospital system was listed as a partner of Brisa Builders. North Shore-LIJ did not partner with Brisa, but it did participate in onsite meetings, tour LICH, and review materials during the initial bidding process that began in September. The Brisa bid was a "miscommunication," a hospital spokesman said at the time.

Developer Don Peebles was an initial bidder, in partnership with the Institute for Family Health. The developer, in the first bidding round, had proposed a "mixed-use, sustainable development," while the IFH would have provided "primary and specialty care with a focus on preventative care targeting the medically underserved in the community" with a community health center.

ProHealth seems to have replaced the IFH in the role of provider of primary care and physician services. The Lake Success, L.I., company is a multi-specialty physician group practice. It also was among the original bidders in the first round, paired with developer Fortis Property Group. The developer revised its deal to partner instead with NYU Langone Medical Center.

A year ago, Maimonides and ProHealth announced an agreement to develop physician practices, with the aim of building a network of doctor's offices in Brooklyn in such areas as Bay Ridge, Park Slope and downtown Brooklyn on Court Street. But the proposed Park Slope and Court Street sites aren't listed on ProHealth's website, though a company spokesman said the company planned to open two locations next week. A separate website for its urgent care practice says the company has eight urgent care clinic locations in Brooklyn.

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Brooklyn Eagle
March 21, 2014
LICH Bidder Peebles Adds Maimonides, North Shore-LIJ to Proposal

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Capital New York
March 24, 2014
A Guide to the Long Island College Hospital Bids
By Dan Goldberg

SUNY officials on Friday night released nine proposals from developers and health care groups bidding to take over the state-run, money-losing Long Island College Hospital.

The latest request for proposals, which was written after SUNY settled a lawsuit with community groups and labor unions, drew interest from all around the world.

There is a broad range of ideas for SUNY trustees and community representatives to think about--some organizations are offering to return the Cobble Hill institution to a full-service hospital with even more beds than it has now, while others envision a small free-standing emergency room.
Some envision real estate development on the site with a mix of affordable housing, while others do not.

SUNY officials and community representatives will score the bids by Wednesday. The SUNY Board of Trustees will then meet in early April to select a proposal.

These bids are just starting points. Once a “winner” is selected, there will be further negotiations.
Below is a brief summary of the nine bids:

Brooklyn Health Partners – Price $250 million: BHP, a new company created to bid on LICH, is spearheaded by Merrell Schexnydre, the president of the California Community Collaborative Inc. BHP envisions expanding LICH, offering 300 to 400 beds. Construction would begin 2 to 3 years after closing the deal. In the meantime, they would operate a "bridge facility" with 150 beds. Their proposal also calls for 1,000 units of housing, 30 percent of which will be affordable units. BHP would own the property and lease it back to an autonomous hospital operator for 20 years. That would allow the hospital to remain not-for-profit, while BHP can stay a for-profit entity. BHP also proposes to pay its employees a “living wage” as they build the new housing units.

Fortis Property Group – Price $240 million: They are proposing to partner with NYU Langone Medical Center and Lutheran Medical Center. Their proposal would create a 24/7 freestanding emergency department, urgent care center and use a portion of the campus for real estate development. The ED would only accept basic life support ambulances and would have four observational beds. The plan also offers a range of health specialties on site. Inpatient care will be provided through transfer agreements with Lutheran Medical Center. Dialysis services will be provided through the contract NYU already has with Atlantic Dialysis. Fortis would also make a $5 million contribution to establish a foundation that would focus on community health care needs. Their proposal promises to set aside 25 percent of new units for affordable housing.

The Peebles Group - Price - Redacted: Developer Don Peebles made a splash when it became known that he was partnering with North Shore-LIJ and Maimonides Medical Center. Together with ProHEALTH, they offer a free-standing emergency room, ambulatory surgery center and several subspecialty offices. They are also offering $7.5 million to develop new jobs outside the hospital. The proposal says that “given the $210 million price floor, heavy weight given to pricing above the floor and lack of weight for affordable housing in the scoring mechanism, we were unable to support a meaningful affordable housing component in the proposal. If selected, we look forward to the opportunity to discuss the potential for affordable housing in our development with the city and the state.”

Prime Healthcare Services – Price $220 million: Prime, a for-profit California company that is expanding across the country, is proposing a full-service hospital. They would use their nonprofit arm to run LICH. Prime A Investments, another wing of the multi-billion dollar company would own the real-estate portion of LICH. Core properties will be leased back to Prime Healthcare and non-core properties “will be managed or sold to companies that respect and care for the community.” Prime will offer a minimum of 100 beds and are open to expanding to as many as 300 beds.

The Brooklyn Hospital Center –Price: $212 million + $75 million to strengthen community health care. TBHC, working with real estate developer Related Companies and Mount Sinai Medical Center, is proposing a freestanding Emergency Department, two new urgent care centers and two new federally qualified health centers in Gowanus and Red Hook. Mount Sinai is offering up to $10 million for investing in the improvement of health care. Related, which is looking to create a mix of market-rate and affordable housing, would own the property and lease it back to TBHC, which is also offering to create an app that will enable individuals to identify the complete array of available services by location and gain instant access to physicians, nurses, patient navigators, and other services, as well as their health records, through a patient portal.

Lana Acquisition Partners –Price $230 million: They are proposing a freestanding emergency department and a range of specialty care. This proposal is a bit vague but it’s being submitted by George Weinberger, chairman of the board for New York Community Hospital, and Alan Gross, chairman and CEO of GFI development. Their proposal states that they are in discussions with a licensed Federally Qualified Health Center to provide needed health care services. This bid proposes to use the upper floors of the FQHC as a nursing home, another building as an assisted living facility, a building on Hicks Street for a public school and the rest of the campus will be used for real estate development. They envision no in-patient beds or in-patient services.

The Chertit Group – Price $251 million: This proposal offers to set aside 149,000 square feet of space for a health care player to be named later. That health care operator would be charged $20 per square foot to lease the space. Alternatively the state could have that space and choose its own health care provider but then the price drops down to $226 million. The rest of the campus would be used for residential development. They are working with FX Fowle, a developer, and would seek a zoning change. They are promising 30 percent of units would be designated affordable housing. The Chertit Group recently made headlines when they won the rights to redevelop property across from Madison Square Garden.

Chinese Community Accountable Care Organization – Price $210 million: CCACO is offering a full-service hospital. They would partner with Saint George’s University School of Medicine in Grenada to provide a medical education component. They propose a hospital with 150 in-patient beds. They also propose to add as many as 100 more beds over the next two years. The proposal is not clear on how CCACO would raise the $210 million.

Trindade Value Partners – Price $210 million. Trindade is proposing a full-service teaching hospital with 506 beds. Trindade is run by Derek Oubre, whose website says Trindade is a “U.S. private equity and consulting concern focused on the production of highly valued pharmaceuticals. The Company provides financial and strategic consulting for pharmaceutical concerns.” IDEEN pharmaceuticals, a Brazilian company, will capitalize the project. They are looking for the city to create a special zoning district called “The LICH district,” which would allow for the kind of real estate they have in mind. They are offering to keep 25 percent “affordable.”

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New York Times
March 25, 2014
5 Bidders Face Hurdle to Save Hospital

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Capital New York
March 26, 2014
Optimism and Confusion Over Long Island College Hospital Proposals
By Dan Goldberg

In the end, it might be a technicality that undoes a number of long-sought bids to maintain Long Island College Hospital as a full-service medical facility.

The issue, mentioned during Tuesday night's community forum at St. Francis College in Brooklyn, regards the licensing of the buyer, after the hospital is sold by SUNY and the interpretation of Article 28 of New York's public health law, a technical but crucial point that could determine the fate of the hospital.

Community members, who were briefed last night on proposals from nine separate bidders to purchase and redevelop LICH, favor the ones who plan for a full-service health care facility. (Some of the bids propose to develop some residential units on the site.)

The potential problem is that none of the bidders proposing a full-service facility currently run a hospital in New York. That means they'd need a certificate from the state's Department of Health before they can begin operations.

There has been some concern that it would take months, or even years, to obtain such permission, which would jeopardize even the limited services currently in place at LICH.

Jim Walden, an attorney who represented community groups in the suit against SUNY and the state, said an out-of-state bidder wouldn't have trouble obtaining temporary permission to run LICH provided SUNY and the state's Department of Health are willing to cooperate.

But whether that cooperation would be forthcoming remains a question, given health commissioner Nirav Shah's and Governor Andrew Cuomo's repeated statements that there are already too many in-patient beds in Brooklyn.

Walden pointed to a subsection of the public health law that says SUNY could request the commissioner of health appoint a temporary operator. The commissioner, according to the law, can "enter into an agreement … for the appointment of a temporary operator to assume sole control and sole responsibility for the operations of that facility."

But it isn't clear if that would allow SUNY to walk away from the property as it hopes to do by the end of May. Further complicating the situation is the fact that SUNY has only one operating certificate to run both Downstate Medical Center and LICH. It isn't clear if that would impede a temporary operator running only one of those two hospitals.

Walden's optimism, however, bodes well for Prime Healthcare Services, the California-based company and crowd favorite Tuesday night.

Prime, a multi-billion dollar chain with hospitals on both coasts, is offering a full-service hospital with between 100 and 200 in-patient beds. Walden cheerfully referred to their CEO Prem Reddy as a man coming “to save LICH.”

Prime's offer so wowed some members of the crowd they were willing, if not eager, to overlook some of its potential problems. Prime is currently under investigation by the U.S. Attorney regarding allegations of upcoding. Prime is also enmeshed in a long-running public relations battle with 1199SEIU West in California.

Their east coast counterparts sounded a cautious note when asked about Prime's proposal.
“Throughout the struggle to keep LICH open, healthcare workers have fought to ensure continuity of quality care for the community,” said Kevin Finnegan, director of politics & legislation for 1199SEIU United Healthcare Workers East. “We have grave concerns about the Prime proposal. Prime has been accused of putting profits above care for their patients and driving down standards for caregivers.”

Prime officials counter they have never been charged with a crime or found guilty of any wrongdoing, and they have excellent relationships with their other labor unions.

The Brooklyn Hospital Center, which is partnering with Mount Sinai and the developer Related Companies, fared less well among the packed house at St. Francis.

"This is a not a hospital," Walden said of their proposal. "This is something significantly less. If people are having a heart attack or are having a stroke, this place is not going to help them."
Fortis Property Group, partnering with NYU Langone Medical Center and Lutheran Medical Center, did not fare much better. Their proposal to create a freestanding emergency room with four observational beds was mocked.

"That's not a joke," said Jeff Strabone, a community activist who helped explain the bids to the crowd. "They shouldn't call it freestanding, they should call it standing only."

The Peebles group received plaudits for bringing in North Shore-LIJ and Maimonides Medical Center, but were still criticized because their plan did not envision a full-service hospital.
Brooklyn Health Partners and the Chinese Community Accountable Care Organization earned some criticism for being a bit vague in their proposal. Not enough was known about their vision, their finances or their management expertise.

The other bidders--Lana, Trindade and Chetrit--were mostly dismissed by the panel and crowd.
 

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