NEW YORK (AP) -- A New York City medical center is hemorrhaging money and could be insolvent within months, the state comptroller's office warned in a report released Thursday.
The State University of New York Downstate Medical Center, which provides medical services at three Brooklyn hospitals, was criticized for "poor financial decisions" in the report by State Comptroller Thomas DiNapoli. The medical center could be unable to pay its debts if "immediate actions" are not taken, the comptroller said.
"SUNY Downstate's fiscal condition is dire and it needs all hands on deck if it is going to survive," DiNapoli said. "Management has made poor financial decisions that often times weren't justified by economic conditions."
Downstate serves more than 2 million New Yorkers and employs about 8,000 faculty and staff. It provides services at three Brooklyn hospitals: University Hospital, Long Island College Hospital and SUNY Downstate at Bay Ridge.
Downstate said in a statement that the "tremendous financial hardships" reflect challenges facing health care facilities across the U.S. The hospital said it is developing a comprehensive plan to remedy the financial issues addressed in the report.
From 2007 to 2001, Downstate slid from a surplus of about $116 million to a net deficit of $165 million, DiNapoli said. And from May to September 2012, the hospital lost nearly $3 million each week.
The comptroller said the financial losses were due in large part to Downstate's acquisition of two hospitals — Victory Memorial Hospital in 2008 and University Hospital at Long Island College Hospital in 2011 — that were based on unrealistic business assumptions.
Auditors also found that Downstate employed 15 administrators with annual salaries in excess of $200,000, which did not change even as the medical center laid off 469 employees with an average salary of $63,000.
In March 2012, the SUNY chancellor ordered an action plan to stabilize Downstate's finances, but the report said no timetable has been set for achieving that goal.