New York City hospitals take step toward merger

New York City and state officials have been pushing a plan for Maimonides Health to join NYC Health + Hospitals, and the planned merger has taken a key step forward.

The New York State Public Health and Health Planning Council signed off Thursday on the merger of NYC Health + Hospitals and Maimonides Health.

State officials still need to sign off on the merger before it is finalized, but officials in both systems hailed the council’s approval of the transaction. They said they hope to gain final regulatory approval this fall.

Based in Brooklyn, Maimonides operates three hospitals and has been struggling financially for years. Officials say Maimonides would find stability in joining NYC Health + Hospitals, the city-owned healthcare system.

As part of the merger with NYC Health + Hospitals, New York Gov. Kathy Hochul has authorized $2.2 billion over a five-year span to Maimonides for improvements.

Mitchell Katz, MD, president and CEO of NYC Health + Hospitals, said the council’s action is “a critical step forward towards ensuring high-quality, culturally responsive health care remains available to the residents of Brooklyn.”

“We are gratified that the State’s independent panel of health experts recognize that this proposed transaction is appropriate and essential,” Katz said in a statement.

Ken Gibbs, president and CEO of Maimonides Health, said joining NYC Health + Hospitals will provide $500 million for a modern electronic health record system. That’s significant, because Maimonides’ current electronic health record system is slated to sunset in June 2027 and won’t be supported beyond that date.

Gibbs also said the merger would spur other essential improvements in facilities and lead to better labor and delivery services.

“We are grateful that the Public Health and Health Planning Council approved the application to allow Maimonides to join NYC Health + Hospitals, bringing us one step closer to securing the financial support we need to maintain and expand the outstanding care our communities have come to rely on,” Gibbs said in a statement.

Read more: Hospital merger reviews miss key points, report says

Plan has faced backlashFormer New York City Mayor Eric Adams first unveiled the plans for the city-owned hospital system to add Maimonides. Zohran Mamdani, who is now the city’s mayor, has supported the plan. NYC Health + Hospitals operates 11 hospitals and more than 70 other care sites across the city.

But the planned merger of Maimonides has engendered opposition among some in Brooklyn’s Orthodox Jewish community and other Brooklyn community members, who have sued to block the transaction.

Some say they are leery of losing control of Maimonides and don’t want to see the system’s character diminished, The Frontier reports. Plaintiffs in the suits have argued that Maimonides has had options to merge with other partners.

In court documents, Gibbs says NYC Health + Hospitals has been the only viable entity interested in acquiring Maimonides.

Gibbs also spelled out the dire financial picture of Maimonides Medical Center in court documents filed in February. He pointed to “serious financial losses that began during the COVID pandemic.”

“After the COVID pandemic, MMC experienced decreases in patient volume across

most service lines,” Gibbs said in the court papers. “The decrease in patient volume, compounded with historic inflation, contributed to significant operating losses. During this period, there was also no material increase in reimbursement from government payors, who make up over 80% of MMC’s patient volume.”

The city health system plans to preserve Maimonides’ culture, Katz says.

“NYC Health + Hospitals is committed to preserving Maimonides’ historic cultural identity and practices and to keeping these values intact as we move forward together,” Katz said Thursday. “We want Maimonides to remain Maimonides.”

Strong support

Several healthcare organizations in New York are backing the merger of NYC Health + Hospitals and Maimonides.

Members of the New York State Nurses Association traveled to Albany to support the proposed merger. Nancy Hagans, president of the nurses’ association, said that the group supports the merger as the best option to preserve nursing jobs.

“In the face of federal funding cuts to healthcare, the state and city are doing the right thing by investing in protecting and improving the healthcare services our community needs,” Hagans said. “This merger would help ensure that Maimonides is able to provide the care our communities need for years to come.”

NYC Health + Hospitals also touted the support of the Greater New York Hospital Association and the Healthcare Association of New York State for the planned merger.

A group of 10 city council members signed a joint letter in support of Maimonides joining the city hospital system. The council members praised Maimonides Medical Center’s long years of service but also cited “persistent challenges with financial stability, technological obsolescence and strained revenue cycle management.”

“It is essential that the facility receives the necessary support to upgrade its infrastructure, expand capacity, and modernize its health information systems,” the council members said. “The proposed merger creates an opportunity to address these challenges and invest to strengthen Maimonides.”