South Nassau Communities Hospital is proposing to spend $40 million of $170 million in potential federal and state reimbursements on a medical arts pavilion in Long Beach and the remainder on an expansion at its Oceanside campus.

The proposals come as a health care consultant hired by South Nassau has completed a report on the health care needs of the barrier island. He concluded that a newly rebuilt hospital on Long Beach, destroyed by superstorm Sandy in October 2012, would lose about $11 million a year. Instead, he has recommended expanding emergency services and primary care.

But some residents who have been briefed on a draft of the report and the hospital proposals — which South Nassau has shared with community leaders and officials — said that the money should be spent only on Long Beach to rebuild a hospital and they are weighing whether to sue to ensure the money goes there.

South Nassau took over the former 162-bed Long Beach Medical Center in October 2014, after the barrier island’s hospital declared bankruptcy following damage from Sandy.

Last January, it was announced that South Nassau would get federal and state funds — $154 million from the Federal Emergency Management Agency and the rest from the state — to restore medical services in Long Beach.

A preliminary conceptional rendering of the proposed southwest addition to South Nassau Communities Hospital is shown alongside the existing F wing in Oceanside. Photo Credit: South Nassau Communities Hospital

South Nassau opened a free-standing emergency department in August. That same month, it hired Bruce Vladeck, former head of the federal Health Care Financing Administration and a senior adviser to Nexera Consulting, a Manhattan-based health care consulting firm, to conduct a study to determine the health care needs of the approximately 37,000 residents on the barrier island.

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Vladeck’s report found that Long Beach lacks enough primary care doctors, psychiatrists, gynecologists, urologists and orthopedists. And, the report found, it has no physicians practicing there in endocrinology, kidney care, neurology or physical medicine and rehabilitation. With a population that is somewhat older and poorer than the rest of Nassau County, the report also called for expanding geriatric care as well as behavioral health care.

But the report concluded that a new 50-bed hospital — a figure calculated based on the number of residents’ hospital stays in 2013 — would lose an average $10.8 million a year in the first five years. And the report questioned whether such a hospital would have sufficient volume in treating certain conditions, such as surgeries or maternity services, to ensure high quality. Studies have found that the more a doctor or hospital treats certain conditions, the better the outcomes.

Instead, the report calls for expanding the emergency services that the 455-bed South Nassau facility in Oceanside now provides and establishing a family practice site. Once that practice is established, the hospital should expand to include geriatric services, dialysis and other specialties “as demand justifies,” the report recommended.

South Nassau is proposing to spend $40 million in potential FEMA reimbursements on a two-story medical arts pavilion on the site of two wings of the former Long Beach hospital. The pavilion, which would be 23 feet above sea level and about 25,000-30,000 square feet, would include a 9,500 square foot emergency department, six dialysis stations, a lab, X-ray and other imaging equipment, pharmacy and administrative offices.

Photo Credit: South Nassau Communities Hospita

If all goes well, building would start in June 2018 and be completed by August 2019, William Ulrich, South Nassau’s vice president of administration, said. Ulrich said the pavilion would be an “economic engine” for Long Beach, generating 245 health-related jobs and an additional 125 jobs during construction.

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South Nassau’s chief executive, Richard Murphy, said the goal is to lay a foundation “for organic health care development that allows for growth over time.” He said the building plans are expandable and could double in size at some point. “There is a lot of opportunity for growth but initially we want to make sure it is clinically and financially sustainable,” he said.

The Oceanside hospital is proposing to spend the remaining $130 million on expanding South Nassau’s emergency department, upgrading its power and electrical plant and building a four-story tower that would include seven state-of-the-art operating rooms and 24 critical care beds. This would come under FEMA’s so-called alternative use provision that allows rebuilding damaged facilities in other areas where they will be most effective.

Vladeck’s report said Long Beach residents are “the most numerous customers” of South Nassau’s inpatient services and even before the Long Beach hospital was closed, South Nassau was “by far the largest provider of inpatient services to barrier island residents.”

But some residents strongly disagree with the proposals, instead calling for all of the FEMA money to be spent solely on Long Beach to rebuild a hospital and expand services there.

“This money was promised to rebuild the health care delivery system for the barrier island,” said Dr. Martin Gruber, a retired orthopedic surgeon who is active in the Beach to Bay Central Council of Civic Associations, which has been vocal throughout in its support for rebuilding the hospital. Gruber said a new hospital would be “at the core” of what he envisioned as state of the art medicine that would include electronic medical records and telemedicine.

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Sam Pinto, president of Long Beach Eastholme Civic Association, agreed. While he praised South Nassau’s placing of the medical arts pavilion on the same site as the original hospital, he said all the money should come to Long Beach. “Not even a quarter is coming back to Long Beach? That doesn’t make any sense,” he said.

Both Gruber and Barbara Bernardino, co-founder of the Beach to Bay group, said the association is weighing whether to sue over South Nassau’s proposed alternative use of the FEMA dollars.

“It’s being debated,” Gruber said.

Murphy said that from the outset and throughout many discussions with the state Department of Health and FEMA, the plan has been to use some of the money not just on Long Beach but “for purposes of the broader community.” And he said the hospital “has been in continuous discussions with FEMA.”

“They were here the other day. They were very pleased with this project,” he said.

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South Nassau said it will file the plan with the New York State Division of Homeland Security and Emergency Services in March. After that, the project is sent to FEMA.

Asked whether the agency supported the project as currently proposed, FEMA spokesman Raymundo Perez said in an email: “We cannot confirm how supportive FEMA would be of any public assistance project proposal that South Nassau or any other applicant submits until it is submitted and thoroughly reviewed. However, FEMA will approve projects that meet all of the requirements for eligibility.”

Perez said that an applicant may request approval of an alternate project from FEMA “when an applicant determines that the public welfare would not be best served by either restoring a damaged facility or by restoring the function of a damaged facility.”

The project must benefit the general public and serve the same general area, Perez said, and the money may be used to repair or expand other selected facilities or to construct new facilities.

Officials remained noncommittal about the proposals.

“I understand the financial issues and how much it would cost but it’s a hard pill to swallow,” Legis. Denise Ford (R-Long Beach) said of the plan not to rebuild a hospital.

State Assemb. Todd Kaminsky (D-Long Beach) said he plans to sponsor a community forum in the next few weeks.

“Dialogue with the community is a critical part of this process and needs to occur on a meaningful scale before any final decisions are made, and frankly, before any needs-assessment is finalized,” he said in an email.

Long Beach City Manager Jack Schnirman said he was looking forward to the forum “so the public can digest these issues.”