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Public information meeting scheduled to discuss MMH privatization

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MASSENA - A report prepared by consultants who suggested that Massena Memorial Hospital should privatize will be discussed during an informational meeting at 5 p.m. Thursday in the Massena Town Hall.

MMH Chief Executive Officer Charles F. Fahd II will be doing a presentation on the report during the meeting between the Massena Town Council and Massena Memorial Hospital Board of Managers, and there will be time for questions and answers.

Other community information sessions will also be set up over the next four weeks for those who are unable to attend Thursday’s session, according to Tina R. Corcoran, senior director of public relations and strategic planning for the hospital.

Representatives from Civil Service Employees Association Local 887 plan to be at the meeting to share their concerns about plans to privatize the hospital.

“Hopefully people will understand it’s not the best way to go,” CSEA spokesman Mark M. Kotzin said.

The recommendation was made by Freed Maxick Healthcare, consultants hired by the hospital’s Board of Mangers to study the possible conversion to a private, not-for-profit facility.

Freed Maxick representatives, in reviewing a draft of the report, had suggested during a February meeting of the Board of Managers that the hospital would be bankrupt by 2017 if they maintained the status quo.

They said that, under the status quo scenario, MMH would continue to experience significant losses over the next five years and would run out of cash in 2017. In order to keep the hospital operational, it would require the town of Massena to fund the deficit by raising $3.2 million per year through the tax rolls or face bankruptcy or receivership.

Under the not-for-profit scenario, the current state retirement pension expense would be replaced with a 403(b) defined contribution plan based on a percentage of salary. The hospital’s cash position would improve to approximately $14.4 million by 2018, they said.

While the net income would still deteriorate throughout projected five-year period, the hospital would remain operational and be able explore other affiliations, according to the consultants, who said the not-for-profit scenario contemplates staffing at current levels and bargaining representation for employees.

A copy of the final report was provided to CSEA Local 887 President Wayne Lincoln last week for his review. But, CSEA representatives said, the public should also have an opportunity to review the document before the Massena Town Council makes a final decision on the hospital’s status. The report is available on the hospital’s website, www.massenahospital.org, under “Latest News.”

They said the public should have an opportunity to look at the financial projects and examine possible alternatives before any decision is made.

“The public has a right to filter this with a fine-toothed comb. There’s a heavy decision to be made here and it shouldn’t be made lightly,” Mr. Kotzin said.

“It would be putting the cart before the horse for the town board to vote on switching the hospital’s ownership before the public has a chance to fully review and digest the consultant’s study findings and confirm the accuracy of the numbers that they’ve been throwing around,” Mr. Lincoln added.

CSEA officials said they believe cost projections from Freed Maxick may not be accurate, with assumptions of rising pension costs when pension costs are in fact declining and potential decreases in health insurance costs due to the implementation of the Affordable Care Act.

Mr. Fahd had previously said that what was a $124,200 contribution to the state’s pension program in 2002 jumped to $4.4 million in December 2013, with a projected $4.8 million contribution in December 2014.

“We already know the pension plan has recovered and is going down,” Mr. Kotzin said.

Mr. Lincoln and Mr. Kotzin said that, before town board members make any kind of decisions about the hospital’s fate, MMH officials should be listening to their suggestions on how the hospital could save money without converting to a not-for-profit facility.

Mr. Lincoln said hospital workers and Local 887, which represents the hospital’s employees, feel MMH officials have ignored multiple cost-saving suggestions they’ve provided, and have failed to look into alternatives other than privatization.

Among the cost-cutting alternatives the union has offered is the switch to a different health plan, which they project would save $860,000. Employees have also said they would accept a wage freeze and higher benefits costs, CSEA officials said. Additional alternatives could include switching the hospital to a Critical Access designation.

“There are other options. We’ve offered suggestions. We want to work cooperatively, but the hospital leader has turned a deaf ear. The way he’s presenting it, his way or the highway, is not exactly true. The public really deserves to hear that message, that it’s not the only option,” Mr. Kotzin said.

“Unfortunately, our hospital CEO has been single-mindedly focused on giving up on our community ownership, without fully examining alternatives. Our workers have offered millions of dollars in savings initiatives that have been simply ignored or rejected by Mr. Fahd. This is the public’s hospital and they deserve to have a full accounting of their options,” Mr. Lincoln said.

CSEA officials said they are concerned that giving up community ownership will mean a loss of local control over hospital services and the possibility of eventual closure if financial goals are not met.

Mr. Kotzin said that, if the town board elects to go the privatization route, it should involve a public referendum.

“As their public hospital, they (community members) should have a right to be involved in the process, even in the decision-making. It took a public referendum to create the hospital in 1942 and it should take another public referendum. This is too important a decision to the community to be just left to a hand full of politicians who may have their own agenda and may not have all the information,” he said.

“This is the public’s hospital. We know we can work together to find enough savings to keep this hospital publicly owned, but if the town board believes otherwise, our residents deserve to have the final say in this. After all, they created it,” Mr. Lincoln said.

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