Indian Time - A Voice from the Eastern Door

Massena Memorial Hospital, one of only two municipal-owned hospitals in New York state, may soon become a privately-owned non-profit entity, similar to other regional healthcare institutes like Alice Hyde Medical Center, Malone and Champlain Valley Physician’s Hospital, Plattsburgh.

The hospital’s Board of Managers voted to recommend privatization at their February meeting, but the final decision rests in the hands of the Massena Town Council.

If the hospital goes private and gains non-profit status, MMH officials have said the only thing that will change is the corporate structure; patient services should remain the same.

But they have warned that if they remain a town entity, they may have to slash services, and a massive amount of jobs, to stay viable.

The MMH board, which is now appointed by the town board, is looking into the transition because a recent financial study shows they could be bankrupt by 2017, if their financial trends over the last three years continue.

The hospital hired FreedMaxick CPAs to project their losses over the next five years; they estimate MMH will be $3.2 million in the red by 2017. Hancock Eastabrook, a law firm hired by the MMH board to conduct a study, reported in December that there are no legal roadblocks to going private.

According to MMH officials, the hospital is looking at a $15 million loss in reimbursements and is under a directive from the state health commissioner to look at the potential of merging or collaborating with other facilities.

Since it is a municipal hospital, its options are limited.

Retirement contributions have risen exponentially over the last decade and they are expected to keep going up, MMH officials have stated. The hospital owes $4.4 million to the state retirement system by December 1, compared to a $124,200 contribution in 2002. That is expected to go up to $4.8 million in December. Officials say the projected losses also include $10.5 million reduction in Medicare reimbursements stemming from the Affordable Care Act.

MMH CEO Charles Fahd said in February that the hospital would have to either make an annual cut of $4 million from here on out, or the taxpayers would have to cough up the deficit. Massena Councilman John Macaulay said at the board’s February meeting that would mean tripling the town tax rate.

In February of this year, the hospital reported a $425,000 loss, they had budgeted finishing the month $60,000 in the black. They have lost $388,181 so far this year, and budgeted to lose $188,261. The difference is due to an approximate $37,000 net gain for the month of January.

MMH is projected to end 2014 with a $1,312,000 net loss from operations and $4,538,000 cash on-hand.

Town board members, including Town Supervisor Joseph Gray, have said they will not make a decision anytime soon – they want more detailed information what the hospital has gathered. They have not set a date for their vote.

Members and leaders of CSEA, which represents the hospital employees, have claimed during public comment portions of Town Council meetings that they may have ways to make cuts and save enough money to stay public, but hospital administration won’t listen.

Town officials have said the ideas may sound good on paper, but may not actually play out as hoped, but they still need to be examined. One proposal is switching to a cheaper health insurance plan.

Wayne Lincoln, a CSEA vice president, has said the union has been completely shut out of the decision process.

Many MMH employees, especially those with 20 years or more in the system, are worried because they could lose part of their state retirement if the hospital privatizes.

Some claim they would leave the area if they were to lose their state benefits in search of new state jobs, which they say would create a hole in the local economy and take money out of Massena’s tax coffers.

On April 10, the MMH board will hold a public meeting where they will present FreedMaxick’s full findings; they have only released parts of their report thus far.