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By Steve Weinstein
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By Eric Tsetsi
The centerpiece of the network is the 615-bed, 19-story East Meadow medical center, Long Island's largest hospital-and tallest building. Founded in 1935, its mission was to provide care for all residents, including the neediest.
But County Executive Tom Gulotta had another mission for the hospital-to help pull Nassau out of the budget deficit that was swelling to $300 million. As far back as 1994, when the deficit was much smaller, Gulotta proposed the sale of the medical center, clinics and nursing home. In the next few years, the Nassau GOP installed its pals in the top spots at the hospital-board Chairman Jerald Newman was a banker with no health-care experience. There were no takers for the hospital, but the process had begun. Three years later, the state legislature approved a bill allowing Nassau and Westchester counties to sell their health-care systems to so-called "public benefit corporations," or PBCs, which meant the public no longer had to court a private buyer. The Nassau GOP set up a PBC headed by its Levittown executive leader, lawyer Eric Rosenblum.
In the meantime, Westchester moved quickly to dish off its hospital, completing the deal in 18 months. The county sold its facilities to a PBC for the symbolic price of $1.
Gulotta, by contrast, needed to generate big bucks out of his sale. To get them, he saddled both the county and the hospital's new owner with millions in long-term debt, an arrangement that has financial experts shaking their heads.
Though the county got to drop some $340 million in health-care expenses, it agreed to back $82 million in bonds so the PBC could buy the facilities and to spend $22.5 million on capital improvements at the hospital. Gulotta also signed Nassau taxpayers up to back $252 million in bonds to kick-start the new corporation and keep it running until it can run itself.
Never mind that Nassau's reputation on Wall Street is so bad that its bonds are barely rated above junk. Rather than getting rid of financial uncertainty, Nassau took on yet more debt in exchange for short-term gain. "That's surprising," says Howard Berliner, an expert in the field of PBCs at the New School of Social Research. "The whole point is to get out of that risk situation."
And it's not just county coffers that are at risk. Because of its tremendous debt, the PBC will be obligated to use its revenues to pay principal and interest on the loans before plowing any money into patient care. "They have to keep their eyes on the bottom line now," Kass says. "Now, they're no different from the North Shores or the Winthrops, who have always been looking for ways to get rid of uninsured patients by shipping them to the County Medical Center. You don't have to be a brain surgeon to figure out what's going to happen."
According to Gulotta's plans, the county will subsidize indigent care by $18 million in each of the next five years, by $18.5 million in the sixth year and $16 million in the seventh. After that, it's negotiable.
Will that be enough? No one knows.
O'Connell says he worries about the consequences for Nassau if the hospital's new owner fails. "If this medical center is not financially stable, a whole house of cards will come tumbling down of all health care in this region," O'Connell says. "The thinking will be, if we need some money, we'll sell off the nursing home, the clinics, we'll let Long Island Jewish take care of people, or North Shore. Once you start breaking apart the integrated model, it doesn't work."
Don't put too much stock in other hospitals' ability to care for those who'd be cast off if Nassau's medical facility pares treatments. "If safety-net hospitals were to succumb to financial pressures by discontinuing essential services or by closing entirely," wrote the Commonwealth Fund in a February report, Safety Net Hospitals, "other community hospitals may not be able to absorb them."
JUST WHAT THE NON-DOCTORS ORDERED
Eric Rosenblum, the hospital's new chief operating officer, tells people not to sweat their concerns.
The Levittown boss didn't return calls from the Long Island Voice for this article. To hear activists tell it, a date with Rosenblum and other PBC execs is less than reassuring, anyway.
"They've raised arrogance to an art form," O'Connell says. "They didn't bring in anybody but their own people to discuss this. We would send a letter to Eric Rosenblum and he would send the letter back saying it's none of your business, keep out of this. Who is Mr. Rosenblum? I forget what he was doing before this. But he wasn't running hospitals."
Advocates like O'Connell say they have specific questions that they can't get answered. For example, the hospital's transfer agreement states that "the historic mission will be preserved." What does that mean?
"In the 400-page document," Kass notes, "there was no room to define 'historic mission.'"
The lack of clarity also worries Dr. Richard Koubek of Catholic Charities. "There were a lot of vague terms in the transfer documents like, 'the care will be the same as,' 'we will make our best efforts,' 'the care will be adequate.' These are not defined. In the final hours, at the public meeting, we raised questions. Same as what? Adequate to whom? What does adequate mean? When you say adequate, does it include prescriptions, emergency care, ongoing preventative care? What? So many unanswered questions come down to the good faith of the county."