Crain's Health Pulse
September 9, 2013
NS-LIJ: No Buyer's Remorse on Lenox Hill
North Shore-LIJ has been losing money on Lenox Hill Hospital ever since the system purchased it in 2010. But those losses have slowed dramatically, according to management and reports from Fitch Ratings. A year ago, the ratings agency said that NS-LIJ's efforts to make the financially troubled Manhattan hospital solvent had gone off track. "Contrary to [management's] expectations, break-even operations are not realistic until fiscal 2013 at the earliest," Fitch wrote in September 2012.
But since then, things have improved dramatically, according to Fitch. Losses dropped to $3.3 million last year, compared with $19.8 million in 2011.The Hospital showed an operating gain $14.3 million during the first six months of this year.
Mike Dowling, NS-LIJ's chief executive, said the system's improved financial picture is due in part to investing "over $100 million" in the hospital. In addition to refurbishing the physical plant, which attracts patients and new staffers, "we have added between 400 and 500 employees," Mr. Dowling said. "We've changed all the management and brought in new clinical staff in surgery, cardiology, cardiac surgery, urology and neurosurgery," he added. "We've brought back pediatrics, which had been eliminated, and we are adding more and more physicians." The strategy is to hire high-caliber doctors who will both "bring in a following" and lead other physicians to consider joining the staff. With Continuum Health Partners forming a new system with Mount Sinai, many physicians are considering job moves. "Not a week goes by that I am not in [employment] discussions with at least a dozen physicians," Mr. Dowling said.
Still, the system's investment in Lenox Hill has yet to turn profitable. "Everyone was pooh-poohing our decision to buy Lenox Hill, but we know what we are doing," Mr. Dowling said. " All the hospitals we've taken over were in big financial trouble."