Hospital chief resigns as Presbyterian takeover looks imminent


BY KAITLYN MEADE  |  March 1 was the last day for New York Downtown Hospital’s chief executive officer. Jeffrey Menkes, 63, had announced his resignation in a letter to staff four days before — not long after a proposal for New York-Presbyterian Hospital to take over the cash-strapped facility.

The former C.E.O. of New York Downtown Hospital was positive about the upcoming merger, but wrote Feb. 25, “The new leadership needs to be focused on the final alignments needed to get us ready for merger with New York Presbyterian once the certificate of need application is approved by the New York State Health Department. That leadership needs to come from within New York Presbyterian to guarantee the best transition.”

The certificate of need was filed in January by New York-Presbyterian, stating that the takeover was the only way to save New York Downtown Hospital, which became the only functioning hospital below 14th St. with the closure of St. Vincent’s in 2010.

The center had been struggling for years, downsizing from 254 beds to 180 in 2006, according to the certificate.
When Menkes was promoted to C.E.O. in May 2007, Robert Hunter, chairperson of the Downtown Hospital said in a Downtown Express article, “His impressive talents will lead Downtown Hospital to an even more financially secure and successful future.”

But it was not to be. St. Vincent’s finally shut down in 2010, leaving Downtown Hospital to cover all of Lower Manhattan, part of which includes a Medicaid-heavy population. In 2011, the hospital closed its seven-station dialysis unit due to cash-flow problems.

In September of last year, the hospital was embroiled in scandal and ordered to pay $13.4 million to settle a lawsuit alleging that they conspired to operate an inappropriately licensed detox program and filed false reimbursement claims to Medicare and Medicaid. That was shortly followed by Hurricane Sandy in October, which forced the hospital to temporarily shut down and move all 125 patients to other area hospitals.

The storm also brought the two hospitals, which have been affiliated since 2005, closer together, according to Menkes.

“The way NYDH and NYPH worked together during ‘Hurricane Sandy’ further cemented the relationship and demonstrated to all of the constituencies in Lower Manhattan that the relationship with New York Presbyterian was needed to keep the mission of our hospital alive,” Menkes wrote.

Steve Corwin, New York-Presbyterian’s C.E.O., estimated in an interview with WNYC that the group would invest about $125 million in NY Downtown over the next few years, including taking on $40 million in debt.
Officials with both hospitals declined to comment for this article.

While the takeover has yet to be approved by the health department, the final transition may come as early as July of this year. Already, the certificate of need states that New York Downtown has employed outside vendors “to prepare for the anticipated transition of its systems to that of NYP Hospital.”

The transition would likely include an expansion of beds and services, and extending to the eighth floor of the Gehry building at Spruce St.

“I leave the Hospital in good hands, and I wish all of you the best in your efforts to serve all the members of the downtown community with quality medical care,” he wrote.

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