Ask the right questions about hospital before voting

12/03/2006 HR

Dear Editor:

This coming Wednesday, December 6th, the City Council will vote on whether to approve the takeover of Saint Mary’s Hospital.  Many of us want to save the Hospital.  With other area facilities filled nearly to capacity and a large segment of our community unable to afford to go elsewhere for medical care, Saint Mary’s has a vital role to play in providing quality health care to Hoboken residents.  Also, Saint Mary’s employs nearly 1,000 people, many of whom live here in town.  The loss of those jobs would be a blow to many hard-working people and to our local economy as a whole.  So we all can agree that saving Saint Mary’s Hospital is an important community goal.

But this does not mean that the Mayor’s plan will achieve that goal, or that if one supports the Hospital, one must support that plan. 

In fact, as I have read through the materials that were put before City Council and the Hospital Board, attended the City Council and Board meetings, and talked to other Hoboken residents and experts in the field, I have come to nearly the opposite conclusion – that the plan entails severe risks and puts healthcare and jobs in danger.  No one on the Council or the Board is asking the questions, openly and publicly, to ensure that the plan is successful or that there are no better alternatives.  For example:

The plan projects 10% growth in patient revenues each and every year (starting almost immediately) for the next 5 years, and an almost lock-step growth in expenses. 

Where is the study that proves that revenues will grow that dramatically? 

Is the expense growth really necessary, or is there a lot of waste with unnecessary “consulting contracts” and the like?  When was the last time you heard of a troubled business that cut not a penny in expenses?  Is anyone minding the store?  These are not idle questions. 

If either the revenue or expense projections are a mere 1% off, the Hospital loses money, something which it cannot afford to do and stay afloat.  If Bon Secours left cash in the Hospital (actually, they are leaving none), we would have a cushion, but that’s not the deal that the Mayor negotiated.

The plan requires over $40 million in federal and state subsidies over the next 5 years in order to work. 

1/2 of this money is supposed to come from the state.  Has the state promised in writing to fund its full share?  This is not an idle question, either.  For 2007, the state could not come up with the money, leaving Bon Secours to plug the hole with a one-time, $13 million payment.  If the state repeats this performance in 2008 or any of the remaining years, the Hospital shuts down. 

What happens if the Hospital shuts down? 

Well, a variety of bad things. 

First, the $52 million in bonds guaranteed by the City will be due and payable.  The Mayor says not to worry – we’ll just sell off all of the Hospital assets to pay off the bonds.  But even assuming we can raise $52 million in a Hospital “fire sale”, what are we going to do about the other liabilities, like the severance, pensions and healthcare for the 1,000 people who will have now lost their jobs?  Are they going to be sent away with nothing?

And what about severance for Mr. Holzberg and his team, who will have a five-year contract the financial terms of which have not been publicly disclosed?  Does he have a back-door guarantee from the City?  Lastly, if there’s enough money in the Hospital to pay the bondholders and everyone else, why do the bondholders need a City guarantee?

Most of the Hospital’s patients come from other cities in Hudson County, not from Hoboken.  Given the Hospital’s importance to medical care county-wide, why isn’t the Hudson County Improvement Authority pitching in with financial help?  Is a parking garage project (supported by the HCIA) more important than healthcare?

Are there other sensible alternatives to the Mayor’s plan? I can think of a few.  For example, can we partner with other area hospitals to save costs?  Can the Hospital be converted to a facility that concentrates on indigent care and senior citizen assisted living - two vital Hoboken needs - instead of the single-room, “luxury” facility that the Mayor’s plan will require the Hospital to become? Why the rush to a decision?  Bon Secours has imposed a dropdead date of January 1st, but will they really shut down the Hospital, throw 1,000 people out of work and cut off care to the indigent.  Would the State even allow it?  (if the Council refuses to say “How high?” when Bon Secours and the Mayor shout “Jump!”)

These are just a few of my questions.  I wish someone on the Council would ask them and insist on getting straight and complete answers.