Queens Hospital's Finances Boost Case Against Closure

A Queens hospital fighting to stay open despite a state health care commission's recommendation that it close is set to emerge from bankruptcy, a turning point that hospital officials said is reinvigorating their cause.

Parkway Hospital, a 251-bed proprietary, or privately owned, facility in Forest Hills, is set to emerge from Chapter 11 protection later this month after the hospital's reorganization plan was confirmed last week.

Now, board members and attorneys for the for-profit hospital indicated that the hospital's positive financial outlook is strengthening their bid to stay open.

"We have funding, we're moving ahead, we have new programs and new doctors, so it's very strange that we're still going through this," a member of Parkway's board of directors, Arlene Pedone, said.

Earlier this year, the Commission on Health Care in the 21st Century, also known as the Berger Commission after its chairman, Stephen Berger, recommended closure for nine hospitals statewide, including five in New York City.

From the outset, Parkway Hospital has fought the recommendation on the basis that it is a proprietary institution, a class of institution, it argues, the Berger Commission lacks the authority to shut down.

"We are being closed for the benefit of not-for-profit hospitals. That is, in our mind, completely unconstitutional," an attorney representing Parkway, Mark Zafrin, said.

Mr. Zafrin said the hospital should have been granted an automatic stay from being closed because it was engaged in bankruptcy proceedings while the commission was impaneled. Parkway's emergence from bankruptcy, he said, is an indication that the hospital should not be shut down.

"The hospital emerging from bankruptcy creates a balance sheet that is much stronger than it was prior to Berger," he said.

A spokeswoman for the state Department of Health, Claudia Hutton, said the hospital's emergence from bankruptcy would have little bearing on the directive to close.

"Berger is law. It doesn't change the fact that this was the commission's recommendation," she said.

Community members and elected officials in Queens said they support Parkway's bid to stay open given a shortage of hospital beds in the borough.

"Queens cannot afford to lose one more hospital bed," the president of Queens, Helen Marshall, said.

In an effort to dig the hospital out of financial straits, Parkway officials estimated that they have spent more than $5 million in legal fees, more than $200,000 a month since the hospital filed for bankruptcy in July 2005. As of April, the hospital has paid its attorneys at least $1.5 million, according to records filed with the U.S. Bankruptcy Court in the Southern District of New York.

By comparison, Saint Vincent's Catholic Medical Center has spent more than $15 million on its bankruptcy proceedings.

Still, as it emerges from bankruptcy, Parkway is moving away from its role as a community hospital and is reinventing itself as an institution offering specialized care.

The hospital is negotiating with New York-Presbyterian Hospital to establish a liver center and a neurosurgery center in Queens. The two facilities would retain Parkway's name, but would be sponsored "in conjunction" with New York-Presbyterian , a spokesman for Parkway, Fred Stewart said.

"We're moving towards the specific needs that are not being addressed in Queens," Mr. Stewart said.