Crains New York Business
Post-trauma recovery

By Gale Scott
Published on April 03, 2006

NYU Medical Center is embarking on ambitious plans for its future as a single medical complex now that its divorce from Mount Sinai Medical Center is nearly final.

With its finances in good health as a result of the split, NYU can attend to much-needed upgrades and construction. It will soon start a $1 billion fund-raising campaign to renovate its Tisch Hospital and create an ambulatory care center. At the same time, using a $30 million state grant, it will play a major role in creating the state's first multidisciplinary Child Study Center, a $200 million project.

However, NYU will likely begin the two monumental projects without a leader to see them through. Its respected and popular dean and chief executive, Dr. Robert Glickman, plans to step down in June 2007, six months before his nine-year-contract would have been up.

"I have thought a great deal about the timing of this announcement," Dr. Glickman recently wrote the NYU faculty and staff, saying that NYU would need a "visionary leader." "I am confident that the search process will successfully identify and recruit such an individual," he continued.

Dr. Glickman will be missed, though. Under his guidance, operating surpluses at NYU--which includes a medical school, three hospitals and a newly completed medical research center--have risen steadily. A $20 million surplus is projected for this year on $1 billion in revenues, up from $3 million on revenues of $637 million in 2003, when the center's surplus hit a five-year low.

Those positive results are due partly to a merger with the moneymaking Hospital for Joint Diseases and the end of NYU's relationship with the moneylosing former NYU Downtown Hospital.

Adding to profitability is NYU Medical Center's partnership with Bellevue Hospital Center, the city-owned facility next door. NYU is able to send most uninsured patients to Bellevue. At the same time, NYU Medical Center got $85 million in 2005 for providing doctors to the city facility and supervising care there.

Dr. Glickman rejects charges from advocates for the poor that the system is unfair.

"Our liver transplant program is 40% Medicaid patients," he says. "We are not being hypocrites when we say our relationship with Bellevue is a partnership."

NYU Medical Center also counts among its successes a cancer treatment and research center that treats 500 to 600 patients a day. It is one of only four in the city and 61 in the nation to get a coveted National Cancer Institute designation, making it a major grant magnet.

The cancer center enhances the institution's sterling reputation. "NYU is right up there with New York-Presbyterian when it comes to quality of care," says Francis Serbaroli, a partner and health care lawyer at Cadwalader Wickersham & Taft. "It's a very highly regarded, premier institution."

To help maintain that reputation, Dr. Glickman, a Brooklyn-reared, Harvard-trained gastroenterologist, embarked on building a new research center soon after becoming dean in 1998. Dr. Glickman recognized that having dazzling laboratory facilities would help attract big names to the faculty.

Stunning views

The 15-story Smilow Research Center, due to open this spring, has stunning East River views, striking interior design and an auditorium equipped with satellite antennas that can relay images of operations in one-millionth of a second--as close as possible to real time.

Dr. Glickman has also replaced many department heads with younger talent and let them innovate. That has paid off in staff loyalty, says former NYU Medical School Vice President Martin Begun, now a health care consultant.

"Dr. Glickman has rebuilt morale that suffered when the board imposed the Mount Sinai merger," Mr. Begun says. This is especially important at NYU, which considers physician satisfaction as important as profits. Faculty members often describe themselves as having blood that runs "NYU purple."

But Dr. Glickman admits that the ill-fated hookup with Mount Sinai, which was already in the works when he came to NYU, has kept the medical center from expanding and updating its facilities as much as it should have in this competitive environment. Projects got sidetracked as the merger started to unravel amid bickering, institutional rivalries and dueling faculty egos, and it has taken years to settle financial issues.

To remain at the top of its game, NYU is launching efforts to bring its 50-year-old main hospital up to modern standards. To complete all its projects, Dr. Glickman says, his successor will need to raise about $300 million through philanthropy, retire some joint debt with Mount Sinai, and borrow the rest. It's a big job.

"Initiatives like NYU's are rare in this day," says Robert Prufeta, vice president of Solomon-Page Healthcare Group, a Manhattan headhunter. "It will be difficult to find someone who can embrace these strategic goals and still run the day-to-day business of the hospitals."

Big shoes to fill

Mr. Prufeta predicts that a salary package of around $1.5 million will be needed to attract good candidates.

At least the person replacing Dr. Glickman won't have the unworkable merger to contend with, Mr. Begun observes.

"I would have sooner spent a week in Baghdad than been in his shoes," Mr. Begun says.

©2006 Crain Communications Inc.

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