MASSENA - Massena Memorial Hospital officials say, while theres nothing yet in writing, theyve been advised there is nothing that would legally prevent them from transitioning from a municipal hospital into a not-for-profit facility. But right now they want to see what the financial picture would look like if they make the move.
My understanding based on a meeting with the legal consultants is right now there are no legal impediments to a change in corporate structure, MMH Board of Managers members Darrell P. Paquin said Monday night.
But, he noted, (The legal opinion) is only part of it.
The second part, Mr. Paquin told board members, was does it make sense financially?
Board members agreed in July to retain the law firm of Hancock Estabrook, LLP, Syracuse, at a cost not to exceed $100,000, to explore transitioning from a municipal hospital to a private, not-for-profit facility.
In November they agreed to enter into a contract with FreedMaxick Healthcare, financial analysis consultants, at a cost of up to $32,000 to do a financial study for the hospital. CEO Charles F. Fahd II said last month that board members had determined they needed not only legal advice about becoming a 501(c)(3) organization, but also a financial analysis to see how such a move would impact the hospital.
The consultants are looking at the hospitals audited financial statements as well as the employee benefit plans currently in place.
So far, board President Andrew T. Spanburgh said, they had not received any information they could share with board members.
We have no information on our investigation, Mr. Spanburgh said, noting the financial analysts had gotten their information, but we dont have anything back. Theres nothing really to report.
Mr. Fahd said he has been told the financial study by FreedMaxick Healthcare will take six to eight weeks.
Mr. Spanburgh said that, when they receive information back from the legal study, it would be shared with entitles such as the hospital board, the town board and state officials, who he said hold the keys to the building.
We have several pieces put together. We would like to see a financial picture of the hospital first, he said.
Information would also be shared with the public, according to Mr. Fahd.
I think both our attorneys and our financial consultants are of the mindset there needs to be, for lack of a better term, some public meeting, whether its a town board meeting or a special meeting, he said.
Even though theres no change to our patients, Mr. Spanburgh added.
Responding to a question from board member Paul B. Morrow about the possible sale of the hospital, Mr. Fahd and board members said there had been no discussion along those lines.
I think we need to be very careful about making any kind of statements like this because that hasnt even been discussed about us being purchased by anybody else, Mr. Paquin said.
Its never been brought up to me. Never, Mr. Fahd said.
Mr. Spanburgh said the sale of the hospital was not within the scope of the studies by the legal and financial experts.
So far their charge has been one thing and one thing only - is it possible for us to change our corporate structure from a municipal hospital to a private, not-for-profit corporation? Thats been made clear. They fully understand that, Mr. Paquin said. Any decisions as far as partnerships, affiliations, so forth, thats something thats down the line.
Massena Memorial Hospital began studying possible privatization this year because of cost concerns, as well as their inability to share services with other hospitals because of their municipal status.
Facing projected financial hurdles in the future, they have said they need to investigate the transition from a town-owned hospital to a private, not-for-profit facility.
Mr. Fahd had said that what was a $124,200 contribution to the states pension program in 2002 has jumped to $4.4 million in December 2013, with a projected $4.8 million contribution in December 2014.
He has also said that among the losses theyre projecting is a reduction of $10.5 million in Medicare reimbursement over the next 10 years because of the federal Affordable Care Act; a $1.9 million reduction in Medicaid reimbursement over the next 10 years because of sequestration; and a $2.7 million reduction in Medicaid reimbursement over the next 10 years because of inpatient coding adjustments.
In addition to the loss of Medicaid and Medicare reimbursements and the increased pension costs, Mr. Fahd has also noted that the state Department of Health also wants north country hospitals to seek formal affiliations, collaboration, merger or other sharing agreements to reduce duplicated services such as capital equipment acquisition and overall health care expenses in the region. But, as a municipal hospital, Massena Memorial is unable to do that because of the taxpayer money involved.