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MMH union officials: Don’t privatize the hospital

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MASSENA — Union officials representing the employees at Massena Memorial Hospital have voiced opposition to the municipal hospital’s preliminary dicussions on privatization.

The preliminary discussions on the possible transformation of MMH from a town-owned municipal hospital to a private, nonprofit health care facility also drew criticism from the Civil Service Employees Association, which represents MMH employees who are not employed as nurses.

“We feel it’s the wrong direction. The hospital shouldn’t try to sidestep their responsibility to provide adequate retirement benefits for its employees,” CSEA spokesman Mark M. Kotzin said. “(By) cutting benefits they (would be) negatively impacting the quality of care they provide.”

Mr. Kotzin said CSEA was aware of MMH’s financial difficulties in recent years and had made suggestions for steps that could be taken to offset rising expenses and lower revenues, but MMH hasn’t “followed through with what we’ve been recommending.”

Mr. Kotzin charged the hospital was in a difficult financial position due to years of “mismanagement” and said privatization would not remove MMH employees from the CSEA. The notion that privatizing would remove MMH employees from the state’s public employees union “is not the answer to the hospital’s financial problems and not accurate,” Mr. Kotzin said.

Privatizing would, however, remove employees from the state pension system, which is open only to municipal and government employees. MMH Chief Financial Officer Sean Curtin said hospital officials are currently only exploring the process of privatization, which he said could save the hospital approximately $3 million in pension costs that have skyrocketed over the last decade. In 2002, the hospital paid only $149,000 to its pension plan compared to the more than $3.8 million they paid in 2012, according to Mr. Curtin.

According to Eric Sumberg, press secretary for the state comptroller’s office, pension costs are rising because of the poor state of financial markets in 2008 and 2009, which has resulted in lower returns on pension fund investments. Mr. Sumberg said that based on how pension costs are calculated, the improvements on Wall Street may result in lower pension costs starting in 2016.

Mr. Curtin said the discussions on a possible switch to a nonprofit hospital, with a private retirement plan, was shared with MMH employees out of a sense of responsibility by Massena Memorial officials.

“We thought that was a responsible thing to do,” Mr. Curtin said.

Those talks were held last week, said MMH nurse Cathy M. Thomas, who got the impression that MMH officials were “looking to” privatize based on the nature of those talks.

“I know it is a process, but it looks like it’s a process they are leaning toward doing,” Ms. Thomas said.

That possibility was panned by the New York State Nurses Association, the union representing Massena Memoiral’s registered nurses.

“Every New Yorker needs access to the same quality of care, whether they live in New York City or the north country,” NYSNA President Patricia DiLillo said in a statement.

“No patient is turned away. Privatization is bad for our patients, and we oppose it 100 percent,” she added.

If the hospital does privatize, employees already vested in the state’s pension funds would remain eligible to receive the benefits of their and MMH’s contributions, according to Mr. Sumberg. Employees who are not vested would see their contributions refunded to them seven years after they cease to be a state employee. Whether an employee is vested in the state’s pension fund depends on the length of time they worked for the state and when they were hired.

Ms. Thomas said there is concern among MMH employees, the majority of whom have not reached the pension milestone of 55 years in age and 30 years of service, which would provide maximum state pension benefits. Leaving the pension system prior to that time would result in reductions to one’s pension benefits, Mr. Sumberg said.

“We don’t even know what alternative retirement plan will be offered. We’re really in the dark on what we will have for retirement,” Ms. Thomas said. “The morale there is at an all-time low.”

Ms. Thomas added that many employees had relied on the state’s retirement and death benefits, and that the loss of those future benefits have prompted some employees to begin searching for a job in which they would remain eligible for their full pension benefits.

Pension benefits “were always a focal point for the recruitment and retention of employees,” Ms. Thomas said. “We may be losing some staff who may be looking for another position to fulfill their 30 years.”

Tina Corcoran, senior director of public relations and planning at MMH, said the future of its employees’ retirement plans were a topic of ongoing discussions on the possibility of privatization. According to Mr. Sumberg, it is possible for an individual to accumulate retirement benefits in both the state’s pension fund and a private retirement plan.

Ms. Corcoran also said hospital officials are “evaluating everything” in trying to determine ways to offset the rising pension costs and roughly $2 million federal in cuts to Medicare reimbursements.

“We’re being hit by multiple different ways. There’s a lot of financial pressure on the hospital right now,” Ms. Corcoran said.

According to Mr. Curtin, MMH is in a position where it could weather several years of running a deficit through their cash reserves; however, those cash reserves will eventually run out during a time when revenue is shrinking and expenses such as pension payments keep going up.

In order to privatize, MMH officials will have to conduct a number of reviews, including a public review, a legal review and a financial feasibility review, according to the state Department of Health website. They would then need to receive recommendations from the DOH staff and the department’s Public Health and Health Planning Council, which would make the decision on whether to allow MMH to privatize. The Town Council would also have to approve any plans to privatize because the town owns the hospital.

Supervisor Joseph D. Gray has said he would be open to having talks on the possibility of privatization.

Mr. Curtin estimated that process may take several years.

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