Despite this year's potential losses, the hospital has suffered larger deficits before--last year's operating losses were $73 million. These operating losses do not include non-operating income that decreases the losses from both years. The likely final losses for this year will be $40 million, while last year's final losses were $63 million.

"We are in the middle of an aggressive turn-around plan," said hospital spokesperson Bill Schaller.

Beth Israel is currently implementing a three-pronged plan to cut costs, increase patient volume and decrease overhead and real estate costs of the hospital.

Schaller cited Beth Israel's "world-class patient care and cutting-edge research." With this turn-around plan, Schaller is confident that Beth Israel will be in a "position to continue to do this for many years."

The financial problems that have struck Beth Israel are also affecting hospitals nationwide. Teaching hospitals are being "hit with a triple threat," Gibbins said.

Increasingly, hospitals must deal with reduced fees from managed care organizations, an increased number of uninsured patients and decreased funding from Medicare cuts in 1997, he said.

The Medicare cuts especially affect teaching hospitals, many of which have struggled with financial problems.