Can an Identity Transplant Save A Beloved Brooklyn Hospital?
By April 1st, if all goes according to plan, Brooklyn’s venerable but financially troubled Maimonides Medical Center (pictured above) will have formally joined H+H, New York City’s public hospital system.
Maimonides will become Brooklyn’s fourth, and by many measures busiest, public hospital, one with more annual emergency room visits than even the giant Kings County Hospital and more infant deliveries per year than the other three Brooklyn H+H hospitals combined.
The move is a victory for Governor Kathy Hochul. Albany is funder of last resort for Maimonides and the state’s other 28 so-called “safety net” hospitals providing care to all regardless of insurance status. The merger will erase Maimonides’s $100 million annual operating deficit from the State budget, freeing up funds for other hospitals.
H+H will gain too, bringing new patients into a system that has seen annual patient visits shrink from 1.4 million to 1.2 million over the past 15 years, even as the city’s population has continued to grow. Also on the plus side: Maimonides itself will keep its doors open, and have its operating deficit smooched into H+H’s City-subsidized $12.2 billion annual operations.
Nevertheless, the merger will not cure Maimonides’s long-term insolvency. Its financial problems are structural. Like its new public hospital stepsisters, it cares for too many poor people seeking help with too many under-insured illnesses. While Maimonides – a beloved institution in Brooklyn’s Borough Park community – will undergo a wrenching identity transplant in order to stay alive, a more sweeping overhaul of hospital care in New York State is the real cure for what ails it.
While long an Orthodox Jewish neighborhood – and today home to an estimated 100,000 Hasidic residents – Borough Park is far from monolithic. Recent decades have brought growing numbers of immigrants from China and Latin America. Nonwhite newcomers now make up an estimated 30 percent of the neighborhood. Like their Hasidic neighbors, many are working class or poor. Medicaid covers 54 percent of residents, while nine percent rely on Medicare.
Maimonides’s payer mix mirrors its community and explains its losses. Seventy-nine percent of its services are billed to Medicaid or Medicare. Both programs reimburse below cost. The problem is compounded by the hospital’s service mix. Nearly 40 percent of Maimonides’s inpatient discharges, for example, involve labor and delivery, where Medicaid pays the least.
Maimonides in fact delivers some of Brooklyn’s most complex and expensive care. Its Medicare case mix index, a measure of clinical severity, is 2.22, higher than SUNY Downstate University Hospital (1.74) or Kings County (1.84). It trains 500 residents and fellows across 35 specialties. Yet prestige and complexity do not offset structural underpayment. On average, Maimonides loses $1,678 per adjusted discharge, a statistic combining inpatient and outpatient activity.
Long teetering on the brink of insolvency, in 2015 Maimonides entered a “strategic partnership” with LI Jewish Health System (then about to be rebranded as Northwell). Intended to preserve both institutions’ independence and governance structures, the deal was cemented with a $125 million unsecured loan to beef up Maimonides’s physical structure and clinical capacity.
Things did not, however, go well thereafter. The Covid-19 pandemic was catastrophic for Maimonides; it lost $375 million between 2021 and 2024, despite the infusion of $1.2 billion in emergency State funding. In the hospital’s 2024 financial statement, its auditor ominously concluded that “substantial doubt exists about the Company’s ability to continue as a going concern.” The writing was on the wall for the Northwell-Maimonides partnership. It terminated last October, with Maimonides owing Northwell a $31 million break-up fee.
Enter H+H. With a merger approval from H+H’s board last November, all the steps transferring Maimonides’s assets, records, and functions, and establishing an end date for the hospital’s existing board of directors, have gone forward smoothly. It is assumed that H+H is being paid for its efforts. State government is committing $2.2 billion, likely as an add-on to its promised support of a new electronic records system for Maimonides. The State has further pledged to cover all operating deficits for five years through beefed-up Medicaid payments approved by the Trump administration.
The deal spells relief for Maimonides. Perhaps most importantly, its survival will no longer hinge on unpredictable year-to-year State budget negotiations. Its new patron, H+H, benefits from annual City tax levy payments for services plus subsidies that have totaled $2.5-$3 billion in recent years.
The merger nevertheless brings with it a poignant loss. While Maimonides will survive, its deeply Jewish identity likely will not.
The hospital’s roots in Borough Park run back more than a century. For more than 30 years, it operated as the United Zion Hospital. Its renaming in 1947 honored the 12th century rabbinic scholar and physician Maimonides, who wrote that he treated “gentiles and Jews alike” in accordance with Jewish law.
While serving a diverse population, it retains a distinctly Jewish character. It provides kosher meals, operates Sabbath elevators that automatically stop on every floor, observes Jewish holidays, and accommodates modesty practices in clinical settings. Staff are attentive to Halacha (Jewish law), which teaches that every moment of life is sacred; Orthodox patients are not withdrawn from life support.
After April 1st, Maimonides will no longer be a Jewish hospital rooted in the religious ethics and humanistic philosophy of its namesake. Instead, it will be run as another one of New York City’s acute care hospitals. It will serve all, and continue to accommodate ethnic and religious factors, but the core of its new identity will be as part of a public, citywide entity.
In the short term, the merger does appear good for both parties. H&H gets an infusion of patients, capacity, and money. Maimonides keeps its door open and its services running. But longer-term, things are dicey, because of risks inherent to a health system with built-in under-payment for poor people’s hospital care.
That’s a problem that goes back decades. The Social Security Amendments of 1965, which established Medicare and Medicaid, required hospitals to be reimbursed at "reasonable costs." In New York, the administration of Governor Nelson Rockefeller took this to mean State-controlled Medicaid should receive the same cost-based rates as it set for Blue Cross payments. This principle was extended a decade later, when New York State’s regulated all-payer reimbursement system managed public and private insurance on the same platform.
But in 1996, Governor George Pataki upended the system. Commercial rates were deregulated, and most Medicaid payments were privatized. Since 2001, 20 New York City hospitals have closed. Most, like Maimonides, served working-class patients and were located in poor communities. All were victims of underpayment by public payers.
Rather than continuing to jerry-build a unique solution for each hospital, the State and City should restore the Rockefeller principle. Taking care of someone insured by commercial insurance costs just as much as someone covered by Medicaid.
Barbara Caress has worked for many years in non-profit, union, and public agency health care policy and administration. She teaches public health policy at Baruch College.
Photo by: maimo.org
