Massena hospital board discusses privatization study in executive session; town supervisor says process far from finished
Thursday, October 24, 2013 - 5:34 pm

By ANDY GARDNER

MASSENA -- The Massena Memorial Hospital Board of Managers discussed law firm Hancock and Eastabrook’s study into the possible transition of the hospital to a private, non-profit entity in an executive session on Monday night.

But board members are not releasing any details from the discussion.

Town Supervisor Joseph Gray was present at the meeting and on Wednesday, he updated the Town Council during an executive session.

When asked Thursday if studying the privatization process is finished, he replied “far from it.”

“The attorneys are working their part; the hospital’s not finished with the financial part as far as getting someone in place to study the financial aspect,” Gray said.

“The board has reviewed two proposals for the financial feasibility study, but is going to look at an additional two,” MMH director of public relations and planning Tina Corcoran wrote in an email. “There is no timeline set.”

The town board will decide the hospital’s fate, however the studies unfold.

“The Town Council has the final say,” Gray said. “We’ll look at the research [the MMH] board has done … and see if we can reach a consensus.”

The hospital is looking at the conversion in light of rising costs and dwindling reimbursements. According to a financial and statistical summary provided at Monday’s meeting, MMH suffered a $497,254 net loss last month. Year-to-date they are in the hole $1.917,585. In Sept. 2012, they came out $37,512 in the black; year-to-date had lost $1,544,251.

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. Its options for this are limited as a municipal hospital.

The projected losses include $10.5 million reduction in Medicare reimbursements stemming from the Affordable Care Act, $1.9 million in cuts from Medicaid reimbursements as a result of the federal sequester, and a $2.7 million reduction because of in-patient coding adjustments, which determines how much a facility is reimbursed for treating a patient.

Retirement contributions have risen exponentially over the last decade and they are expected to keep going up. The hospital must pay $4.4 million into 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 2014.

Many longtime hospital employees are worried about losing their pensions they have worked toward. Many are approaching 30 years in the New York state retirement system, meaning they are in tier five. If the hospital goes private before they hit the three-decade mark, they will not be able to get to tier six, the point at which some say is possible to live solely off the retirement package.

Others have said they are afraid the quality of service and number of services available could dwindle if the town gives up control.