By Jared Chausow
By Katie Toth
By Elizabeth Flock
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By Jon Campbell
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Last Aug. 19, DeRienzo went to a public meeting because she was worried about the health of the hospital she depended upon. The meeting concerned an $82-million sale that would turn over the hospital and its clinics to a "public benefit corporation."
"I went to the meeting because I was worried that poor people, and I've been poor all my life, wouldn't get good medical treatment," she said. DeRienzo is a feisty woman who, when she speaks, refuses to be ignored. "My kids and I stayed healthy and, with the ITP, my life was saved because of the care we got. Sometimes I was only making $800 a month. The Medical Center cost us nothing. We struggled, but we had a life."
What she saw at the meeting turned her worries to fear. Eric S. Rosenblum, 50, was announced as the new corporation's chief operating officer. DeRienzo knew him as a lawyer and Levittown Republican boss. "When I saw him," she recalls, "and he's up there smiling, saying, 'Oh, yeah, the hospital's going to be the same, the clinics will still be for the poor,' let me tell you, I didn't buy it for one minute."
She is not alone in her worries of what can happen to the hospital, seven clinics and the A. Holly Patterson Geriatric Center in Uniondale, which are all part of the sale, along with 50 acres of property around the hospital. Health-care advocates across Nassau fear a catastrophe in the making. There are well over 200,000 uninsured people in the county, with some estimates as high as 300,000, who depend on charity care from the publicly owned medical center. If the new corporation runs into financial difficulties, it can close clinics, sell the nursing home or shut the hospital itself-cutting off the lifeline for some of Nassau's neediest residents.
"We are in critically serious danger of losing our public health services," says Donna Kass, from Great Neck, a retired physical therapist and health-care administrator who now leads the Long Island Coalition for a National Health Plan. "There is absolutely no guarantee or assurance that services to the indigent or under-insured will continue to be given. And certainly no assurance that they'll be given at the same level, with appropriate quality."
All hospitals, whether public or private, are required by law to provide emergency care even to people who have no insurance at all. But a county-owned facility like Nassau's is supposed to strive to fill gaps in services, rather than just being willing to take car-crash victims, says Jack O'Connell, executive director of the Health and Welfare Council of Long Island. He says the Nassau County Medical Center has been the only place to get certain treatments other LI hospitals deemed too expensive to offer, even to patients with full coverage.
O'Connell says the danger is that the Nassau facility's new owners are starting out with so many millions in debt they'll decide to jettison some services just to stay afloat. The hospital can't block the uninsured from seeking help there, but management could whittle away the offerings. "The fear would be that they would eliminate a burn unit or a trauma center that would be very important for that population," he says. "With all this debt, the fear is if they're behind the eight ball from day one, what kind of services are they going to present?"
WHOSE LIFE IS IT, ANYWAY?
In the past 25 years, more than 400 public hospitals have either gone out of business or been sold to become private or quasi-private. Of the nation's 1,300 remaining public hospitals, more than a third are on the critical list. A Consumer Union study released in April showed that when medical centers are sold or merged, care for the poor is the first casualty.
Nassau's public health system has never been ideal, but it is at least functional. Now the taxpayer-owned network could be in jeopardy, both because of the way the deal was structured and because the public has been almost completely shut out of the process.
Getting shut out of government is nothing new in Nassau, where for decades Republican administrations have been not democracies but autocracies. Nor is the selling of public hospitals unusual, in an era when politicians tout the benefits of turning community assets into private holdings.
What's out of the ordinary is how Nassau County constructed such a shaky deal. From the beginning, in picking a board, setting a price for the hospital, fumbling to put together a workable financial system and getting community opinion, the newly created Nassau Health Care Corporation seemed to be shipwrecked before it had set sail.
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."
The new setup insulates the PBC from public opinion or heavy questioning, because the county has no Board of Health or independent panel overseeing hospital operations. Koubek, Kass and O'Connell and a host of other community organizations from the League of Women Voters to the Families and Children Association say they have been essentially shut out of the process. They've been trying to get the county to create a community-based advisory board to provide some measure of meaningful oversight, but their fight has led nowhere, they say, except to greater boorishness on the part of Eric Rosenblum.
Dr. Rosemarie Guercia, former deputy commissioner of the Nassau County Department of Health and a leading health-care advocate, says she asked Rosenblum about an advisory board. "He was very candid," Guercia says. "He told me he already had enough people looking over his shoulder."
At the public meeting in August, Rosenblum and his pals were ready for citizens to show up and demand involvement in the new Nassau Medical Center.
"There was a rehearsed question and a rehearsed answer," recalls Richard Koubek. "I didn't pick up on it until after the meeting was over. The Health and Social Services Committee chairman, Vincent Muscarella, asked a question of Mr. Rosenblum. Something like, 'Will the board meetings of the PBC be public?' And I thought, that's an innocuous question. Rosenblum said, 'Oh, absolutely. Absolutely yes.' Someone told me later, 'There goes your advisory or oversight committee. They're on record about public involvement.' You see, the public meetings aren't the real meetings."
THE WORD IS 'OVERSIGHT'
One week after Republicans lost control of the county legislature to Democrats, they at last created something that looks a lot like a public advisory board for Nassau's health-care network.
Activists are delighted at the approaching rise in power of the Democrats, since the party has at least argued that the public should be included in discussions about the medical center. "If you look at the national parties, the Democrats have a greater interest in health-care issues for poor people," Koubek says. "For example, look at the Patient Bill of Rights, which the Democrats are in favor of. I assume there will be some overlay on the county level for the Democrats."
Yet by hastily creating an advisory board, the Republicans bound the Dems to an oversight committee that has no teeth. The Community Health Council will have seven members, five of whom will be picked by the county legislature's presiding officer, two by the minority leader. The chairperson will come from one of the five picked by the majority leader. The bill that created the council was a curiously worded document with phrases like "whereas, the County of Nassau is contemplating the transfer of the Nassau County Medical Center."
Since the sale has been a done deal for months, was this thing drafted, forgotten and filed away only to be resurrected in a time of election defeat and after blithely ignoring health-care advocates, with a public meeting looming on Nov. 22?
"It's a sham proposal," says Kass. "This so-called Community Health Council serves at the pleasure of absolutely no one. There are no term limits. There is no mission statement. No rights are assigned to this council, no responsibilities assigned. The composition is completely political. A sham, pure and simple."
The composition of Nassau's PBC board appears to be just as political as that of the advisory council. In the Westchester deal, board slots were filled by people who have experience running huge and complex enterprises, like the executive director of the Port Authority, a vice president of J.P. Morgan and Company, executives of investment firms, a former lieutenant governor. But in Nassau, the seats are held by longtime party contributors and politically wired lawyers, like Chief Rosenblum.
CEO Jerald Newman is pulling down $200,000 to run the hospital, but the closest the ex-chief of the Bowery Savings Bank has come to the health-care field was a stint as an executive at Slim Fast Foods Inc, according to hospital documents.
Activists point out that running a diet company is hardly preparation for the vast complexities of managing a health-care network. "Running a hospital today is an extraordinarily difficult and complex task," says O'Connell. "You're in competition with not only other hospitals, but you have HMOs, third-party payments, there's an enormous amount of problems. You see people like Jack Gallagher at North Shore, David Dantzker at LIJ, you see people at the Catholic health institutions, and what you have are people with an incredible amount of talent, who have been doing this for a long time, who have evolved through a system and who know how to run an operation. This is not a job for novices."
The relative newcomers in charge of Nassau's hospital will face some high hurdles right out of the starting blocks. In addition to keeping up with the debt payments, they'll inherit a labor arrangement that is cumbersome and politically fragile.
In Westchester, the county struck a deal to have the hospital's new management negotiate directly with the unions, giving the PBC crucial flexibility.
But thanks to Gulotta, Nassau's PBC won't have nearly as much room to move. Last year, Gulotta persuaded lawmakers in Albany to pass a law that would keep Nassau's hospital workers in the same union as county employees. Having long enjoyed profitable negotiations with the county, those workers give Gulotta and the GOP a loyal voting bloc, not to mention campaign funds.
In his few interviews with the press, Rosenblum has expressed optimism, telling one reporter, "We're looking to hold our own, pay our debt, pay our bonds, and provide top-quality medical care."
It's not lost on activists that the last item on Rosenblum's list is "top-quality medical care."
"I'm really concerned about this sale," says Sister Evelyn Lamoureux, parish outreach coordinator for St. Boniface in Elmont. "We met with Eric Rosenblum on several occasions. We were made promises. We asked that health-care services for the poor be maintained, and that they would get equal treatment, the same waiting time, the same physicians as people who can pay. Mr. Rosenblum said he didn't have a problem with that. But nothing like that, nothing close to it, is in the agreement. Just some stuff about 'historic mission.'"
The county legislature is about to undergo a massive restructuring, from a 14-5 GOP majority to a 10-9 Democratic majority. The PBC board, however, may be one of the new legislature's biggest stumbling blocks if it wants to make an impact on health care.
Seven positions on the PBC board have expired. Five of those are controlled by Gulotta and one by lame duck Presiding Officer Bruce Blakeman. Calls to Gulotta's office asking for a timetable on making new appointments were not returned. Activists expect these slots to be filled soon, rather than sitting empty until Democrats take control in January. The new appointees will serve five-year terms, so Rosenblum and Newman may have a rubber stamp board until 2005.
Nassau's Democratic boss, state Assemblyman Tom DiNapoli, promises to examine the appointments. "We're going to look closely at the assignments," he says. "Ours will reflect the historic mission of the hospital and health centers. The services to the poor will not only be maintained, but enhanced. We are committed to community input, community advisory boards that mean something. We have to stay close to the everyday people who are served by the PBC."
DiNapoli's stand has been encouraging for activists, but they question how much Democrats can get done with a Republican-selected board and advisory council. "What will have to happen is they're going to have to find their feet in a hurry," says O'Connell. "They've never governed. Some members have never been elected to anything. I would hope and expect them to remain open. I hope they remain open to ideas and suggestions to literally create a new system of delivering health services."
For some advocates, the threat of losing the old system looms large. Sister Lamoureux cites real services, like a mobile mammography van, that could be lost by real people if the PBC falters. "I'd say 50 percent of the women who use it are without insurance," she says. "What happens if that is taken away?"
People like Ramona DeRienzo, who have depended on care through Nassau's network for years, aren't hopeful about the new ownership. DeRienzo sees the end of an era, the end of doctors' offices and emergency rooms that provided treatment for her and her family that they couldn't have gotten elsewhere.
"That is a great hospital, and the clinics are great," she says. "They were good to me and my kids, kind and caring. Now they've got to make money. Who's going to suffer? You tell me. The hospital and the clinics will never be the same, I'm convinced of that."