BETHPAGE, N.Y., July 12 /PRNewswire/ -- Episcopal Health Services, Inc., (EHS) the health care organization of the Episcopal Diocese of Long Island, New York today reported net income of $8,718,000 for the year ending December 31, 2003. This compares with net income of $3,597,000 for the same period of 2002. Although liquidity did not improve due to a delay in the settlement of third party prior year settlements, debt decreased from $ 64.3 million to $73.8 million. Accounts receivable declined by $1.8 million, and bad debt expense declined by $900,000 to $5.6 million.
In announcing the health care system’s financial results, Bishop Orris G. Walker, Jr., the Episcopal Health Services Board Chairman and leader of the Episcopal Diocese of Long Island said, “We are enormously pleased with our financial performance and the quality health care services we deliver. To think that the EHS of just a few years ago, a failing organization with little hope of survival, is today’s thriving health care system, delivering vital high quality health care services, is nothing short of a miracle.”
“We could not have achieved this miraculous turnaround without the leadership of Kurron, the health care management and restructuring company, the cooperation of our staff and community support. We are very thankful,” Bishop Walker continued.
For fiscal 1998, EHS had losses of $74.7 million of which $33.7 million was from operations. Another $20.3 million loss for the first six months of 1999 brought outstanding liabilities to a point that threatened to shut down EHS.
In July 1999, Episcopal Health Services engaged Kurron, which began an in depth analysis of EHS’ holdings and implemented an aggressive turnaround plan that included the sale of all of its inefficient properties. At the same time Kurron increased efficiency while maintaining high quality care at its remaining properties. It did so by managing delicate negotiations with creditors, including the NYS Dormitory Authority; renegotiated Local 1199 Union contracts and implemented productivity improvements.
On November 15, 1999, EHS filed voluntary bankruptcy to reorganize under Chapter 11 to facilitate the restructuring of its short and long term debt. The outstanding debt at the time of the bankruptcy filing was $150 million.
EHS emerged from Chapter 11 bankruptcy after just 13 months effective April 2, 2001; has been operating at a surplus; has funded its bankruptcy distribution pool each year, and is on schedule to repay all of its creditors by 2005. In addition St John’s Episcopal Hospital-South Shore, EHS’ single largest facility, which serves a primarily Medicare and Medicaid -based population and provides the community of Far Rockaway with the only hospital-based dialysis, maternity and inpatient psychiatric services, has consistently earned both the Joint Commission on Accreditation of Health Care Organizations accreditation and the American Osteopathic Association accreditation.
“EHS’ story is an edifying tale of how to implement a successful turnaround while maintaining vital health care services which is particularly poignant and valuable for health care institutions struggling in today’s climate of reduced reimbursement and increased managed care where few who enter Chapter 11 ever emerge. Struggling health care institutions should take a page from our book and consider hiring a professional health care management company, such as Kurron, to get them back on the right road,” Bishop Walker concluded.
Episcopal Health Services, Inc.
CONTACT: Melissa M. Krantz of Krantz & Co., +1-917-653-6716,krantzandco@aol.com, for Episcopal Health Services, Inc.
