A plan by NewYork-Presbyterian Hospital to spend $423 million on new facilities highlights what some in the health care industry say is the growing division between smaller community hospitals, which are struggling, and the larger academic powerhouses, which are doing better.

As first disclosed in The New York Sun yesterday, the hospital plans to build a $254 million Cardiovascular Center at its NewYork-Presbyterian Hospital/Columbia University Medical Center campus in Washington Heights. It also will make $169 million in additions and upgrades at the New York Weill Cornell Center on the Upper East Side, including improvements to its neurology facilities. In 2003, NewYork-Presbyterian opened its $120 million Morgan Stanley Children’s Hospital.

Some in the health care industry said the new facilities could shift the citywide competitive balance in specialty areas of medicine such as cardiology and neurology, which are more lucrative. Hospitals increasingly are focusing on highly specialized areas, which tend to make more money than general medicine.

An official at St. Vincent’s Catholic Medical Center said the network plans to add new cardiology facilities as well. A trustee of Mount Sinai Hospital, Richard Ravitch, told the Sun yesterday that the hospital will soon release its strategic plan. A recent Standard & Poor’s report on Mount Sinai Medical Center and New York University Medical Center showed that in the first six months of this year, the facilities generated net income and were on pace to make a profit for the first time in five years.

Still, the financial landscape for many area hospitals is not pretty. Brooklyn Hospital, a 464-bed facility in Kings County, and St. Vincent’s, the city’s largest Catholic hospital system, are both in bankruptcy. Others, including Lenox Hill on the Upper East Side, have suffered severe cash crunches. Lenox Hill’s bonds were recently downgraded by two agencies to junk status, and the hospital plans to create some liquidity by selling off its substantial Upper East Side real estate holdings.

But not everyone is in trouble. The president and CEO of NewYork-Presbyterian Hospital, Dr. Herbert Pardes, said yesterday, “We are doing terrifically.”

He said the hospital is performing better relative to other city institutions because it has “strengthened its programs” and “widely recruited” doctors who are drawn to its large research budget. In addition to the base of New York patients it treats, the hospital also treats patients from around the country and world, he said.

In New York, “where the financial aspect of health care is so tough, even when you are doing well, the amount of the margin is not as much in other areas of the country,” he said.

Mr. Ravitch, of Mount Sinai, said all city hospitals, no matter how bold their capital plans, are struggling because of cutbacks in federal funding, increased costs, and lower reimbursement rates.

“I don’t think there is a widening gap. I think the major medical centers, where there is a hospital and school, will always do better than individual hospitals,” he said during a phone interview. “The larger institutions have a better fund-raising base, a better research base.”

Mr. Ravitch added: “All hospitals are raiding each other now for doctors. You try to strengthen the doctors who perform services in,” the higher profit margin part of the business.

State assemblyman Richard Gottfried, a Democrat who is chairman of the assembly’s health committee, said, “When you treat the health care system like a market place, big players that can attract large numbers of paying customers are going to grow, and small hospitals that serve poor people are more likely to fall behind or to fail.”

Mr. Gottfried said, “If we were talking about the hotel industry that would not be much of a problem. But we are talking about hospitals. The marketplace attitude that the Pataki administration has promoted for a decade produces this kind of inequality.”

The 1998 merger between Columbia Presbyterian Medical Center and New York Weill Cornell Medical was unusually successful. This latest planned capital expenditure is split between the hospital’s uptown and midtown campuses.

A senior fellow for the Manhattan Institute, Robert Goldberg, who specializes in health care, said that the modernization and capital improvements necessary to compete in New York are difficult to pay for.

“The hospitals in New York are very much like General Motors or the airline companies. There are high fixed cost, extremely high overhead, and generous benefits,” he said. “To try to retool around the new technology of the 21st century, you need to layer it on top of what is existing. Rare are the institutions that are able to do that successfully.”

A health care analyst with Moody’s, Pamela Federbusch, suggested that NewYork-Presbyterian’s investment in cardiology may have been linked to the recruitment of a famous cardiology group from Lenox Hill hospital that occurred last year.

“Capital spending helps recruit and retain doctors,” Ms. Federbusch said. “Doctors want to go where the newest and greatest technology is.”

An analyst with the public finance health care group at the Fitch rating agency, John Wells, said that NewYork-Presbyterian’s capital expenditure is a sign of strength in a difficult environment.

“Certainly, if they are in a position to make this capital investment, it is viewed favorably by investors,” he said. “It will help them compete more effectively against other New York hospitals, which are struggling.”

Last spring, Governor Pataki convened the Commission on Health Care Facilities in the 21st Century. In December 2006, the Commission is scheduled to present its recommendations on which of New York’s 73 hospitals should be closed or modified. The chairman of that commission Stephen Berger, would not discuss any of its findings until the recommendations are released.

With about 13,800 employees on the payroll, NewYork-Presbyterian is New York City’s largest private employer and its largest hospital, treating one out of every five New York patients. Last year it had revenues of $2.43 billion and $2.41 billion in expenses.

According to tax filings, Mr. Pardes was compensated $2.3 million in 2003 and received an additional $1.2 million in contributions to an employee benefit plan. Dr. Michael Berman, the hospital’s executive vice president earned $1.7 million with an additional $1.4 million in benefits. The hospital’s volunteer chairman, John Mack, was named the CEO and chairman of the board of Morgan Stanley in June.

In the U.S. News & World Report survey on America’s best hospitals released this year, NewYork-Presbyterian was named the top hospital in the city and the seventh best in the country. The hospital’s neurology department was ranked number three, and its cardiology department is number seven in the nation.

Last year, a member of the hospital’s cardiac surgery team, Dr. Craig Smith, performed surgery on President Clinton. Another member of the department, Dr. Mehmet Oz, is the best-selling author of several health related books, including, “Eat to Live: The Revolutionary Formula for Fast and Sustained Weight Loss.”

In a report released in October by the New York State Department of Heath, entitled “Adult Cardiac Surgery in New York State, 2001-2003,” the combined campuses of NewYork-Presbyterian Hospital performed about 7,500 cardiac surgeries in the three year span, the most in the state and more than 10% of the state total.

Yesterday, Mr. Pardes told the Sun that the hospital was looking to continue expand its services.

He said, “We are hitting a number of areas. The greatest attention to heart disease, brain disease, cancer, and women’s and children’s care.”

Mr. Pardes said the hospital “Keeps an eye on what the competition is doing,” but he said the staff and boards of other city hospitals included “his friends and colleagues.”

He said he hoped for “a bunch of outstanding institutions in New York.

“We compete and collaborate,” he said.