Following millions of dollars in losses, Shands at AGH, Gainesville's first hospital, will close in about a year.
The hospital lost $12.5 million last year because of cuts in state and federal funding, fewer patients and declines in reimbursements from government programs and insurance companies, according to a Wednesday news release.
Tim Goldfarb, Shands HealthCare CEO, said at a news conference Wednesday that the decision was difficult but necessary.
"Make no mistake, Shands HealthCare and Shands at AGH may be able to run but cannot hide from the economic storm that's affecting us all," he said. "We felt it was better to consolidate our programs to weather that storm."
The hospital's about 1,150 employees will not be laid off, Goldfarb said.
"All who want a job will have a job," he said. "It may not be exactly the same job they have today at AGH, but it'll be a job within the Shands system."
In October 2009, Shands at AGH, which is at 801 S.W. Second Ave., will begin relocating patients and services to Shands at UF and the new Shands at UF Cancer Hospital, scheduled to open next fall, according to the release.
He said Shands is unsure what will happen to the hospital after it closes.
One option is to demolish the building and create a life sciences and technology incubator to help commercialize UF's research efforts, he said.
The land could also be used for business offices, he said.
Shands at AGH has 367 beds, according to the hospital's Web site.
Goldfarb said the decision to close Shands at AGH was made Wednesday by Shands' board of directors.
The board did not take the decision lightly, he said.
A few of the board members were born at the hospital and know how important it is to Gainesville, he said.
Discussions about closing the hospital began this summer, according to the release.
Goldfarb said Shands has invested more than $86 million in the hospital over the past 12 years, and it would take another $50 million in upgrades to maintain the facility over the next five to six years.
Goldfarb said Shands spent more than $115 million providing charity health care to patients last year.
However, he said Shands did not consider cutting those services because they are a core part of Shands' mission.
Goldfarb said the closing of the hospital will be difficult for many reasons.
"It's difficult logistically," he said.
"It's just as difficult emotionally to do that for the many people who have dedicated their careers and, in some cases, much too much of their personal lives to the success of Shands AGH," he said.
