NEW YORK – U.S. Housing and Urban Development Secretary Andrew Cuomo today joined a celebration of Flushing Hospital’s "clean bill of fiscal health" just two weeks after HUD helped the Queens hospital emerge from Chapter 11 bankruptcy proceedings.

The celebration marks the end of a two-year effort by a partnership of the health care workers union, hospital management, community leaders, elected officials and HUD to prevent the closure of Flushing Hospital and the loss of 1,400 jobs.

Flushing Hospital is one of 70 hospitals across the country that have mortgages currently insured by HUD. Its doctors sounded the first warnings about the outbreak of West Nile encephalitis in New York City in the summer of 1999. It also is the hospital in which the Secretary’s brother, Christopher, was born.

"Healthy hospitals help keep both the families and the neighborhoods around them healthy," Cuomo said. "I’m pleased that HUD, unions and management succeeded in rescuing Flushing Hospital from bankruptcy and in restoring it to financial health."

"The emergence from bankruptcy, especially in such a short time frame, is a powerful signal to the health care industry and to the local community that Flushing Hospital Medical Center’s turnaround is real," said David P. Rosen, President and CEO of the hospital. "We relied on the sacrifices of so many employees and the loyalty of the many members of the medical staff who were also convinced that a properly energized Flushing Hospital Medical Center could prosper. We’ve had extraordinary support and cooperation from the various unions that represent our employees and tremendous support from community leaders, former patients and, last but certainly not least, HUD who have fought to preserve this community hospital as a vibrant part of the Flushing community."

"1199/SEIU is proud to have helped coordinate this extraordinarily unique and successful effort to save a much-beloved community hospital," said Dennis Rivera, President of 1199/SEIU. "Along with our friend Secretary Cuomo, we applaud the tireless efforts of Flushing’s employees and medical staff who would not let the hospital die, the leadership of David Rosen and Jamaica who stepped up and carried the ball when no one else would, the Bankruptcy Court and creditors who kept the process going until a solution could be found, and the Flushing community who never lost faith."

HUD has insured Flushing Hospital’s $28 million mortgage under its Section 242 program since 1980. The program currently insures 70 loans with a total value of $4.4 billion in 11 states and Puerto Rico. Since the program began in 1969, HUD has written more than $9 billion of insurance for more than 300 hospitals in 41 states and Puerto Rico. .

Flushing Hospital is very busy, with occupancy rates ranging from 85 to 90 percent. The 250-bed, 115-year old hospital filed for Chapter 11 protection in June 1998. A year later, with Flushing Hospital’s unpaid claims of some $80 million and operating losses of $15 million, its manager New York Hospital of Queens had decided to close Flushing Hospital and sell its assets. Some 1,400 workers would have lost their jobs and the more than 100,000 patients who come to the hospital each year would have had to seek medical care elsewhere.

At the urging of Local 1199 of the Health Care Workers Union and other creditors, the Flushing Hospital Board of Trustees agreed to allow Jamaica Hospital Medical Center, a division of MediSys Health Network, to assume management of the hospital.

Jamaica Hospital accepted the invitation and the hospital’s unions agreed to renegotiate their contracts to achieve savings and operational efficiencies. An interim management plan was submitted to and approved by the U.S. Bankruptcy Court, effective in March 1999, just days before the hospital’s scheduled closing. Finding a depleted staff at the hospital, Jamaica Hospital sent a team of 120 managers to assist in stabilizing its operations and implementing the plan.

In addition to being a party to the bankruptcy proceedings, under its Section 242 program HUD approved the release of $2.75 million from a reserve fund to enable the hospital to upgrade its delivery rooms, operating rooms, post-partum areas, to repair roofs, to replace air-conditioning systems and to modernize medical equipment. Flushing Hospital expects to apply for FHA insurance for additional funds to continue its rebuilding and modernization efforts.

Having lost $13 million in 1997 and $15 million in 1998, by 1999 Flushing Hospital was showing a small surplus of $45,000. So far this year it has generated a surplus of $1.7 million.

The quantity and quality of services at Flushing Hospital also are being turned around. The hospital has reopened an 18-bed psychiatry service as well as a 25-bed medical/surgical unit, both of which had been closed. Its Chemical Dependency Unit has grown from just 7 patients in March 1999 to 21 now. Ambulatory care services have been expanded and hours extended.

In 1999, Flushing Hospital admitted some 15,400 patients and received 33,000 emergency room and 61,000 ambulatory care patients. A total of 2,184 babies were born at Flushing Hospital in 1999.