Crain's New York - November 5, 2012 - (Page 4)

IN THE Storm shows hospital excess MARKETS BY GALE SCOTT AND BARBARA BENSON The closing of St. Vincent’s Hospital two years ago meant the city would have only one medical facility south of 26th Street with the specialized staff and equipment needed to treat severe injuries that disasters bring. Greenwich Village residents predicted that lives would be lost. Sandy put that theory to the test. The storm caused three downtown hospitals to evacuate (as well as Coney Island Hospital in Brooklyn).The closures included Bellevue Hospital Center, the last remaining trauma center for New Yorkers south of the Empire State Building who were plunged into darkness. Despite the turmoil, however, no lives were lost and no patients were harmed. The worst-case scenario unfolded, and even with the evacuations, the health system absorbed hundreds of evacuated patients. Beth Israel Medical Center launched a temporary trauma center to handle seriously injured and critically ill patients in the area. The scenario made clear that hospitals must revise their systems to avoid flooding and generator failures. But as health care in New York shifts toward outpatient care, the storm suggested that even in the worst of times, the densest parts of the city have enough hospital beds. “Hospitals can handle the surge” in patient volume, said Michael Dowling, president and chief executive of the North Shore-LIJ newscom BELLEVUE EVACUATION: Despite shutdowns, the city had enough beds for patients. Health System. North Shore-LIJ is building a freestanding emergency facility to serve those who lost St. Vincent’s. It could have housed temporary patients, but construction is not yet complete. For now, he added, all hospitals “will have to be taking on extra patients for some time to come” because of the closures. “Sandy is not a justification to build a hospital” in Greenwich Village, Mr. Dowling said. Preparedness was the key to the health system’s storm survival. Beth Israel, at First Avenue and East 16th Street, lost power, too, but nine emergency generators kept the place running.The hospital’s officials corralled employees—neurosurgeons, orthopedic,vascular and cardiac specialists, and general surgeons, said Continuum Health Partners’ chief operating officer, Gail Donovan. All were working or on standby. A trauma designation is mostly a matter of having both sophisticated imaging equipment and a range of specialists available 24/7. The hos- pital would have both as long as was necessary, Ms. Donovan said. “We’re not a designated trauma center, but we have all the specialists we need on staff,” she said. During the worst of the storm surge, the hospital’s lights were dimmed, heat was shut off, and patients were banned from watching TV. Otherwise, backup power enabled the hospital to operate close to normal. The Greater New York Hospital Association and the Office of Emergency Management helped Beth Israel secure truck-size emergency generators to replace the ones that were running. The new machines eased the burden on Beth Israel’s existing generators. “Everyone knows the critical role Beth Israel is playing right now, and everyone knows that anything and everything has to be done to keep it functional,” said a hospital spokesman last Friday. With the evacuations of New York Downtown, NYU Langone and Bellevue, Beth Israel had about 750 inpatients, compared with a normal census of about 650. Continuum hospitals were operating at 97% capacity. The storm “has been a lesson to us that Mother Nature has all the power, and we have to continually improve our preparation,” said Mr. Dowling. “We think we are in control, but we are not.” Still, NYU Langone, which will be shuttered for weeks, will try. It plans to erect metal walls to protect it from future floods. Sandy’s waters rose 15 feet in the basement. by Aaron Elstein The coming surge in muni bond biz C ome rain or shine, Wall Street always gets its cut. And now that New York has just had a catastrophic flood, there are two clear ways the financial industry will benefit from Hurricane Sandy. nism was adopted after both 9/11 and Hurricane Katrina. “There’s no murmur of it happening yet,” said Matt Fabian, managing director at Municipal Market Advisors, “but I bet it’s coming.” A second way the financial industry will profit from Sandy is by raising insurance premiums. For now, insurers are in the process of settling claims and writing big checks for property damage. Early estimates from brokerage Keefe Bruyette & Woods predict that Travelers Group will pay more than $800 million in claims. Large as that number is, it amounts to only 3% of the insurer’s capital. But it’s a sure bet that insurers will seek to recover that capital by raising premiums, arguing that after two major storms in two years, the New York region is a riskier place to insure than they’d thought. Also look for more insurers to refuse providing coverage in places like the Jersey Shore, the Hamptons and other oceanfront enclaves. Rob Haines, an insurance analyst at independent research firm CreditSights, believes insurance rates here will rise by 5%. The final say on the matter belongs to Benjamin Lawsky, who, as superintendent of the New York Department of Financial Services, regulates insurers in this state. Asked last week if rates will rise, Mr. Lawsky replied: “It all depends on how things shake out. It’s a little too early to tell.” Rest assured, readers: Rates are going up. First, look for a surge in municipal bond issuance.The Metropolitan Transportation Authority has clearly suffered huge damage to tunnels, tracks and switches—a study last year by a Columbia University researcher predicted a storm surge would cause up to $84 billion in damage to the public transit system. That’s not all. Some 200 city school buildings are now unusable. One-quarter of New Jersey Transit’s train fleet was damaged. Certainly, the government will help pick up the tab to fix these and other vital parts of the region’s infrastructure, but Sen. Charles Schumer said last week that the Federal Emergency Management Agency’s disasterrelief fund has only $7.2 billion. To fill the gap, city and state agencies will need to borrow money, probably a lot of it, by issuing municipal bonds. You can be sure public finance bankers are mobilizing right now to line up borrowers and buyers and, by the way, collect their commission, which is typically around 2% of a muni bond offering’s proceeds. Congress can help spur recovery by allowing public agencies to expand their borrowing authority. One way lawmakers can do that is by allowing muni issuers to do more of something called “advanced refunding.” That would allow issuers to invest new borrowings in repair and renovation projects, rather than use them to pay off old muni bonds, as is typically done. By the way, that sort of financing mecha- 215K 4 | Crain’s New York Business | November 5, 2012 THE NUMBER of metric tons of gasoline waiting on tanker ships located in or near New York Harbor last Friday, according to Bloomberg News. Deliveries were delayed because Hurricane Sandy forced oil refineries, ports and gas stations to shut down. newscom http://www.bowlmor.com http://www.bowlmor.com

Table of Contents for the Digital Edition of Crain's New York - November 5, 2012

IN THE BOROUGHS
IN THE MARKETS
THE INSIDER
BUSINESS PEOPLE
EDITORIAL
GREG DAVID
REAL ESTATE DEALS
REPORT: EDUCATION
CLASSIFIEDS
FOR THE RECORD
DIGITAL NEW YORK
SMALL BUSINESS
NEW YORK, NEW YORK
SOURCE LUNCH
OUT AND ABOUT
SNAPS

Crain's New York - November 5, 2012