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Massena Memorial union officials: Don’t privatize the hospital

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MASSENA — Union officials representing the employees at Massena Memorial Hospital have voiced opposition to the municipal hospital’s preliminary dicussions on privatization.

The discussions on the possible transformation of Massena Memorial from a town-owned municipal hospital into a private, nonprofit health care facility also drew criticism from the Civil Service Employees Association, which represents hospital employees who are not employed as nurses.

“We feel it’s the wrong direction. The hospital shouldn’t try to sidestep their responsibility to provide adequate retirement benefits for its employees,” CSEA spokesman Mark M. Kotzin said. “(By) cutting benefits they (would be) negatively impacting the quality of care they provide.”

Mr. Kotzin said CSEA was aware of the hospital’s financial difficulties in recent years and had made suggestions for steps that could be taken to offset rising expenses and lower revenues, but the hospital hasn’t “followed through with what we’ve been recommending.”

Mr. Kotzin charged the hospital was in a difficult financial position because of years of “mismanagement” and said privatization would not remove hospital employees from the CSEA. The notion that privatizing would remove hospital employees from the state’s public employees union “is not the answer to the hospital’s financial problems and not accurate,” Mr. Kotzin said.

Privatizing would, however, remove employees from the state pension system, which is open only to municipal and government employees. Hospital Chief Financial Officer Sean M. Curtin said hospital officials are only exploring the process of privatization, which he said could save the hospital approximately $3 million in pension costs that have skyrocketed over the last decade. In 2002, the hospital paid only $149,000 to its pension plan compared with the more than $3.8 million it paid in 2012, Mr. Curtin said.

According to Eric Sumberg, press secretary for the state comptroller’s office, pension costs are rising because of the poor state of financial markets in 2008 and 2009, which has resulted in lower returns on pension fund investments. Mr. Sumberg said that based on how pension costs are calculated, the improvements on Wall Street may result in lower pension costs starting in 2016.

Mr. Curtin said the discussions on a possible switch to a nonprofit hospital, with a private retirement plan, was shared with hospital employees out of a sense of responsibility by Massena Memorial officials.

“We thought that was a responsible thing to do,” Mr. Curtin said.

Those talks were held last week, said nurse Cathy M. Thomas, who got the impression that hospital officials were “looking to” privatize based on the nature of those talks.

“I know it is a process, but it looks like it’s a process they are leaning toward doing,” Ms. Thomas said.

If the hospital does privatize, employees already vested in the state’s pension funds would remain eligible to receive the benefits of their and Massena Memorial’s contributions, according to Mr. Sumberg. Employees who are not vested would see their contributions refunded to them seven years after they cease to be a municipal employee. Whether an employee is vested in the state’s pension fund depends on the length of time he worked for the state and when he was hired.

Ms. Thomas said there is concern among hospital employees, the majority of whom have not reached the pension milestone of 55 years of age and 30 years of service, which would provide maximum state pension benefits. Leaving the pension system before that time would result in reductions to one’s pension benefits, Mr. Sumberg said.

“We don’t even know what alternative retirement plan will be offered. We’re really in the dark on what we will have for retirement,” Ms. Thomas said. “The morale there is at an all-time low.”

Ms. Thomas said that many employees had relied on the state’s retirement and death benefits, and that the loss of those future benefits has prompted some employees to begin searching for jobs in which they would remain eligible for their full pension benefits.

Pension benefits “were always a focal point for the recruitment and retention of employees,” Ms. Thomas said. “We may be losing some staff who may be looking for another position to fulfill their 30 years.”

Tina R. Corcoran, senior director of public relations and planning at Massena Memorial, said the future of its employees’ retirement plans was a topic of ongoing discussions on the possibility of privatization. According to Mr. Sumberg, it is possible for a person to accumulate retirement benefits in both the state’s pension fund and a private retirement plan.

Mrs. Corcoran also said hospital officials are “evaluating everything” in trying to determine ways to offset the rising pension costs and roughly $2 million in federal cuts to Medicare reimbursements.

“We’re being hit by multiple different ways. There’s a lot of financial pressure on the hospital right now,” Mrs. Corcoran said.

According to Mr. Curtin, the hospital is in a position where it could weather several years of running a deficit through its cash reserves; however, those cash reserves eventually will run out during a time when revenue is shrinking and expenses such as pension payments keep going up.

In order to privatize, hospital officials will have to conduct a number of reviews, including a public review, a legal review and a financial feasibility review, according to the state Department of Health website. They then would have to receive recommendations from Health Department staff and the department’s Public Health and Health Planning Council, which would make the decision on whether to allow the hospital to privatize. The Town Council also would have to approve any plans to privatize because the town owns the hospital.

Town Supervisor Joseph D. Gray has said he would be open to having talks on the possibility of privatization.

Mr. Curtin estimated that process may take several years.

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