EHR Implementation Drives NY Hospital Into Bankruptcy

Ernie Garcia | | May 30, 2013

Montefiore Medical Center is offering to buy Sound Shore Health System for $54 million plus furniture and equipment, according to the latter’s bankruptcy filing — which also reveals just how far the troubled Westchester health network had fallen into the red.

Sound Shore Medical Center in New Rochelle, Mount Vernon Hospital and five related entities have about $200 million in debts owed to more than 3,000 creditors, while possessing only $159.6 million in assets, the U.S. Bankruptcy Court documents show. Sound Shore filed for Chapter 11 bankruptcy protection Wednesday as the first step in discharging its debts and selling itself to the Montefiore system...

Beginning in 2006, the hospitals saw falling patient volume and a change in their case mix. That led to “significant” losses in recent years, negative cash book balances and bills paid more than 225 days late. A 2011 electronic medical record and billing system conversion caused major delays in billing and cash collection that still haven’t been fully solved...

Open Health News' Take: 

Yet another US hospital bites the dust after a proprietary EHR implementation. As we have warned multiple times in Open Health News, more than 1/3 of all US hospitals are going to be driven into bankruptcy as a result of proprietary EHR implementations. Edmund Billings has a really good discussion of the mind-boggling costs of proprietary EHR implementaitons in this article MaineHealth Facing Financial Debacle due to Proprietary EHR Install.

The solution? Open source EHRs Take a look at Oroville Hospital in California. The 153-bed rural hospital implemented the open source VistA EHR and achieved 80% CPOE for less than $14 million, of which just $6.7 million was for the EHR and the rest for hardware and lab equipment. Here is a recent press release Oroville Hospital Creates EHR Development Office to Continue Improving Its VistA Implementation.

Interestingly enough, one of the reasons given for Sound Shore's bankruptcy is that the hospital serves "a 'disproportionate share' of Medicaid patients and uninsured people, with 60,000 indigent care visits annually." That same description applies to Oroville Hospital. Yet the one that chose the open source path prospers, and loss no revenues during the migration to the EHR, while the other goes bankrupt. Roger A. Maduro, Publsiher and Editor-in-Chief, Open Health News.