Montefiore to Acquire Another Bankrupt Hospital
"Montefiore Medical Center has a large unionized staff, and may have the competencies necessary to manage the many unionized employees at the former Sound Shore Health System. Secondly, Montefiore may have been willing to take this risk it is rumored to have received the hospitals for a fractional of the value of their physical assets," says Powell, president of the Boston-based consulting firm Payer+Provider Syndicate.
"The push towards value-based care may have also played a role. While the hospitals are not exactly overlapping, they are potential substitutes for people with access to a car. In the long-run, the combined health system may be able to push patients towards lower cost facilities within it to reduce costs. Some types of shared overhead may also be reducible in the long-run."
The deal marks the second time in three months that Bronx-based Montefiore has picked up a suburban hospital at bargain basement prices. In March Montefiore finalized its $15.3 million acquisition of Westchester Square Medical Center, a community hospital in the Bronx that had operated under bankruptcy court protection for nearly seven years.
Earlier this year nearby Westchester Medical Center announced that it had ended six months of negotiations to acquire Sound Shore, claiming in a media release at the time that "Sound Shore appears to have a dramatically different view than WMC about how to best balance resources between investment in improving the Sound Shore/Mount Vernon facilities and the obligations that the Sound Shore System has accumulated over the years."
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