Mount Sinai to shutter Beth Israel hospital

New York City-based Mount Sinai Health System has unveiled a plan to shutter 856-bed Mount Sinai Beth Israel and replace it with a much smaller 70-bed facility.

Mount Sinai said less than 60 percent of the hospital's beds are occupied, on average, and patient volume at the financially troubled hospital has decreased by double digits since 2012. Beth Israel and its affiliates have lost hundreds of millions of dollars over the past few years. In the first nine months of 2015, the teaching hospital posted an $85.6 million loss, which exceeded a budgeted loss of $75.6 million.

To address these issues, the system will invest $500 million to replace Mount Sinai Beth Israel with a smaller facility, located two blocks from the current campus. Funds will also be used to expand primary, specialty, behavioral and outpatient surgery services.

The plan to transform Beth Israel will take place over four years. The current hospital will remain open during that time.

Mount Sinai will retrain and place as many of the Beth Israel employees within the system as possible. However, between 600 and 700 nonunion employees are expected to lose their jobs, according to The Wall Street Journal. Mount Sinai said all union employees will either keep their jobs or be retrained for new ones at equal pay.

Mount Sinai will sell the property where Beth Israel sits, which has a current value of about $600 million, according to WSJ.

The system also put an apartment building housing medical residents up for sale. The 24-story Gilman Hall, which Mount Sinai acquired in 2013, is among a cluster of buildings the teaching hospital uses for academic space, medical offices, hospital facilities and for housing resident physicians. One source familiar with the property told Crain's New York Business that the building could sell for up to $80 million.

Tenants at Gilman Hall have been told they must move out by June 30. Some resident physicians are pleased they will be able to move out of the dated building, which was built in 1969, according to Crain's.

More articles on healthcare finance:

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Mount Sinai Beth Israel plans downsizing as losses mount

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