By Hector Flores
The Legislature¹s Health and Human Services Committee sponsored the hearing, and Howard Weitzman, the county comptroller, was one of the first to testify. He explained that if NUMC were to fail, other hospitals would not be able to pick up the slack. In addition, the hospital¹s failure could have a drastic effect on Nassau County¹s finances.
³NUMC remains Nassau¹s only public hospital,² Weitzman said. ³Its failure is one of the biggest risks to the county¹s fiscal recovery, because Nassau County is the guarantor of a $3 million bond in the event of default by NUMC. The critical mission for NUMC is to stabilize its finances, because it must continue to exist and serve the community, and it must not imperil the county¹s finances.²
Weitzman added that NUMC¹s financial woes are not unique, and explained that many hospitals are facing financial challenges. He said that health care costs will continue to rise faster than inflation, and that factors such as improved technologies and older patients will keep costs high. In addition, the public hospital¹s services are reimbursed more slowly than hospitals with a majority of privately insured patients.
³This is a difficult health care environment,² Weitzman said. ³There are big problems in the voluntary community ‹ even the North Shore Long Island Jewish system has layoffs.²
It is estimated that NUMC will have a $8.5 million to $11 million deficit for 2005. According to Weitzman, the hospital administration failed to implement planned expense-reduction initiatives on a timely basis, such as cutting down on overtime and reducing the use of agency nurses.
Weitzman said that in 2006, the administration predicts a deficit of $32 million before gap-closing measures. ³NUMC proposes to close that gap by multiple initiatives to generate revenue and cut costs,² he said. ³The problem is that by our estimate, over half of their gap-closing measures [representing nearly $20 million are] at risk.²
On the expense side, the administration has proposed $20 million in initiatives. But of that amount, only $9.5 million are in place or likely to happen. Weitzman said that the balance ‹ $11.5 million ‹ is in the form of initiatives that the administration failed to implement.
On the revenue side, hospital administrators propose $15 million in initiatives, but Weitzman estimates that $8 million of that amount is not within administrators¹ control.
³In addition, there are multiple uncertainties regarding state payments,² Weitzman explained. ³These include the timing of Medicaid payments and possible future cutbacks in the Medicaid program.²
According to Weitzman, NUMC could lose between $8 million and $20 million in 2006. If the figure were $8 million, the facility would be able to operate without additional assistance, but if the losses are much greater, the hospital would require assistance. Despite Weitzman¹s sobering projections, he acknowledged that hospital administrators have done well considering the hospital¹s mission of serving the uninsured.
Daniel Kane, president and CEO of the Nassau Health Care Corporation, which runs NUMC, said that in order to meet its budget, the hospital has enacted a hiring freeze and accelerated in-patient discharges. ³We have made no increases in salaries and fringe benefits,² Kane said. ³But there has been a lack in reducing overtime. So far we have been able to reduce 100 employees through overtime cutbacks and 50 through attrition.²
Kane explained that the overtime costs are run up not by full-time employees, but by agency nurses, who fill vacancies in the nursing staff.
Kane said that in an effort to bring in more revenue, the hospital has opened three new behavioral units, one in substance abuse rehabilitation, and the other in adult and adolescent psychiatry. He said he hopes these initiatives will finally stabilize the hospital¹s finances. He has submitted a $492 million budget for 2006, and with the initiatives in place, he expects a $331,000 surplus.
³We are committed to meeting our goal in 2006,² Kane said. ³Our focus is on our finances, and our plan is very aggressive so we can continue to serve the medically underserviced and the uninsured.²
Comments about this story? HFlores@liherald.com or (516) 569-4000 ext. 283.
