MASSENA - Even if pension costs go down as predicted by the state comptrollers office, Massena Memorial Hospital officials say it still wont be enough to stave off their gloomy financial future.
Massena Memorial Hospital and the financial consultants agree that the office of the New York state comptroller expects a slight decline in employer pension contribution rates over the next few years. But those decreases will not be large enough or fast enough to reverse Massena Memorial Hospitals course if we maintain the status quo, MMH Senior Director of Public Relations and Strategic Planning Tina R. Corcoran said.
Matthew Sweeney, press secretary for the comptrollers office, said last week that the 2015 pension rates are expected to be less than those paid in 2014, and they anticipate the 2016 rates will also go down. But, he said, the 2016 rates will not be announced until August.
Ms. Corcoran said Massena Memorial Hospital will pay $4.2 million in New York state pension contributions this year. They had paid approximately $125,000 in 2002.
She said that, even with a decrease of 0.8 percent in their pension contributions in 2015, Massena Memorial will still run out of money in 2017 if they maintain the status quo as representatives from Freed Maxick Healthcare have suggested. Freed Maxick Healthcare had been hired by the board of managers in 2013 to examine the financial implications of maintaining the status quo or converting to another type of facility, including a nonprofit. It has predicted the hospital would be in the red by 2017 at its current pace.
Lloyd Arakelian, a certified public accountant with Freed Maxick Healthcare recently said that the hospital would have an expected loss in net income of $1.4 million in 2014. It would be $1.2 million in 2015 and $2.5 million in 2016, and it just gets worse, he said, as patients volumes continue to decline.
In 2017 our money will be very scarce, Ms. Corcoran said. We dont believe we can stake the outcome on the hopes that the pension contribution will drop to a level not seen in a decade in just a few years.
She said that, while they expect to see larger drops in pension contributions in about 10 years, they need to see those savings now to stay fiscally afloat.
The hospital is not generating and based on projections, will not generate enough revenue to cover its costs, including the pension costs. To remain open, the hospital must be remain solvent. Revenues must match or exceed its costs. For the most part, the hospital does not control its revenues, so it must control its expenses, she said.
MMH Chief Executive Officer Charles F. Fahd II laid out the hospitals predicament during an April 10 public information session at the Massena Town Hall, and Ms. Corcoran said there will be more of those meetings in the weeks ahead.
Were reaching out to different community groups. We do have some dates set up in the next week to four weeks, she said.
Any group that would like to arrange for a presentation can contact Ms. Corcoran at 769-4305.
Were happy to come out and talk to them. Its just an informational thing, to share the information thats been involved in the discussion, she said.
Ms. Corcoran said they want to make the community aware of what theyre facing if they maintain the status quo.
We are asking Massena and the surrounding communities to participate in a collaborative process to determine a solution that keeps Massena Memorial Hospital open and financially viable and continuing to provide a wide range of high-quality medical services, she said.