By ANDY GARDNER

MASSENA -- Even if Massena Memorial Hospital becomes a private, non-profit it still may not be able to stave off eventual bankruptcy, according to a presentation given by MMH CEO Charles Fahd.

“It’s not a cure-all, but it does buy you a lot of time,” he said.

He spoke to a room of about 100 at the Massena Town Hall on Thursday evening. The crowd included the Town Council, hospital administration and consultants, MMH employees, their union leadership and members of the public.

If they become a non-profit, the presentation says the hospital will end 2015 $2,332,000 in the black. That will shrink to $1,100,000 in 2016 and $693,000 in 2017. They will be operating $27,000 in the red in 2018. That is as far as the projections go, which were calculated by FreedMaxick CPAs based on previous years’ totals.

The presentation says MMH, as a non-profit, is estimated to maintain a minimum of $6,601,000 cash on-hand until at least 2018. As a municipal entity, FreedMaxick believes they would be broke by 2017.

Fahd said a lot of the cash reserves would come from not having to pay into the state retirement system. His presentation showed that MMH’s state pension contributions have risen from about $125,000 in 2002 to $4.2 million for 2014.

With the cash on-hand, and operating as a non-municipal entity, it will allow the hospital to look at merging with other health care institutes. They currently affiliate with other entities, but state law prohibits them from a merger because it is town-owned.

“The New York state constitution prohibits public money from being used for private purposes … mergers of public [with private] hospitals are not possible,” Ray D’Agostino said. He is with the Hancock Eastabrook law firm, which the MMH Board of Managers hired to study the legal aspects of becoming a non-profit entity.

A big part of the hospital’s losses is due to slashed reimbursements from Medicare and Medicaid.

They now classify many in-patient visits as “observations” instead of a actual stays, which cuts the pay-back rate by 80 percent. Ten years ago, MMH received a $6,000 reimbursement for an in-patient stay, today they get $1,200.

A decade ago, MMH handled between 18 and 25 observations per month. They are estimating 85 for April 2014.

“It’s the same bed, same nurse, same care, same lab tests … and we’re reimbursed $1,200,” Fahd said.

The state pension has been a flashpoint, as many MMH employees are close to retiring with full benefits. If the hospital goes private, they will keep what they have paid in, but won’t be able to work up to their maximum benefits.

“You get paid less, but you’re always going to have New York state retirement,” Deb Dumont of Massena said, talking about her mindset throughout her years working at Massena Memorial. “I’ve always taken a lot of pride in that.”

Wayne Lincoln, president of MMH’s CSEA chapter, said in a recent press release that employees may be willing to take a wage freeze as a cost-saving measure, if the hospital stays public. The presentations showed salaries went up $801,000 between 2013 and 2014.

“If we freeze everyone’s pay for three years and saved on healthcare, we could avoid bankruptcy in three years,” Lincoln said.

Councilman John Macaulay pointed out that there’s been talk, but the proposition hasn’t actually been negotiated.

“It cannot impact anything” if it isn’t part of collective bargaining, Macaulay said.

In the long run, the freeze could hurt the employees more than help.

MMH employee Bobbi Lauber of Norfolk said since the wage freeze would mean less money going into retirement accounts, it would be less money retirees would draw in their benefit checks.

“I stand to lose over $20,000 per year in the first ten years of my retirement, that’s over $200,000,” she said.

"I would caution you to have CSEA look at the impact of it if you take a three-year freeze," Joe Macaulay of Massena commented. "Taking a zero raise is unbelieveably against you."

Tammy Kirkey, also an MMH employee, asked if there was a way to work with the state to get maximum benefits for those close to 30 years in the system, the point at which they get to their highest level. State law says that would require the state Assembly and Senate to approve such action.

“It won’t happen without special legislation,” Town Supervisor Joseph Gray said.

The MMH Board of Managers have already voted to recommend privatization, a move that drew surprise from Gray and criticism from CSEA officials. But the final decision rests with the town board.

They may hire their own independent firm to make estimates on where the hospital is headed based on previous years’ financials, according to Gray.

“We haven’t set a time frame,” Gray said. “I don’t anticipate [voting] anytime soon … as in not the next couple days or couple weeks. The Town Council is currently gathering facts and asking their own questions.”