Days after Nassau University Medical Center staff learned that chief executive Arthur Gianelli had been forced out, Catholics attending daily Mass there prayed for him, and for the future of the institution he had turned around. If Nassau's public hospital once again becomes destabilized by a return to political and patronage shenanigans, it will need emergency care, if not divine intervention.
Under Gianelli's tenure from 2006, the hospital and its clinics were modernized, especially for trauma and burn care, and won national recognition for quality improvements. And even as more and more such public safety-net hospitals shut their doors, NUMC balanced its books.
Gianelli's removal risks throwing the center, with its 531 hospital beds and 589 nursing home beds, into turmoil and demoralizing its staff. It couldn't have come at a worse time. The hospital landscape is changing fast, with mergers and consolidations in response to ever-lower reimbursement rates from insurers and government.
NUMC is very vulnerable to these winds. Gianelli was a key figure in a New York consortium of public hospitals and health systems negotiating to get a Medicaid waiver worth $20 billion from Washington. That pot would help stabilize the finances of those institutions in the next five years, and provide Albany with funding to resuscitate failing hospitals in Brooklyn.
News of Gianelli's firing rippled through the industry and governmental regulatory agencies, causing anxiety in Albany and Washington over its impact on the complicated Medicaid negotiations. And it could undermine NUMC's recent alliance with the North Shore-Long Island Jewish Health System, which has envisioned NUMC tapping into the behemoth's medical expertise and muscle to bargain for better rates with insurance carriers and suppliers.
Simply put, Gianelli had finished putting into place plans to keep NUMC financially viable, plans that must be well executed in 2014 because the following year is expected to be difficult. In 2015, the solitary wage increase in NUMC's contract with its union workers kicks in at a cost of $10 million. There is $12 million in debt principal coming due, and an expected loss of $13 million -- the county's reduction in its "mission payment." That's $35 million the Medicaid waiver and North Shore alliance were expected to cover.
Troubled hospitals spiral from triage to death very quickly. If that's what happens here, taxpayers will feel the pain because the county is the guarantor of $260 million of NUMC's debt.
Certainly, Gianelli is not irreplaceable. No one ever is. Considering the challenges facing NUMC, however, his removal for no reason is highly questionable and very worrisome. There has been no challenge to his skills or character, nor any expressed desire of the hospital board for a change in direction.
So what happened? Election Day.
After the Republicans' big win in county elections on Nov. 5, there was confusion and tussling in party circles about what to do with Gianelli's contract, which was coming due. Distracted County Executive Edward Mangano raced off to catch a midafternoon flight the next day for a vacation in Las Vegas. That evening, Gianelli was told his contract wasn't being renewed (his salary of $320,000 is the lowest of any Long Island hospital chief executive). On Nov. 7, NUMC board chair Craig V. Rizzo told fellow directors that Gianelli had resigned, a stunning development to them.
At no point leading up to the resignation did the board have a full discussion on the merits of Gianelli's leadership.
Rizzo might have violated state law that requires trustees of such public facilities to act in the best interests of their institutions, not at the behest of the elected officials pulling their strings.
Another sign of how intertwined the party is with the business of the hospital, at that same meeting the board renewed a lobbying contract with Park Strategies, the firm headed by former Sen. Alfonse D'Amato. While the $250,000 cost was a substantial increase from the GOP powerbroker's earlier contract, D'Amato had nothing to do with the ouster of Gianelli.
Even though it's the hospital board, not Mangano, who has legal authority to remove Gianelli, the county executive takes full responsibility. Mangano argues he didn't want Gianelli's contract to automatically renew, but in reality it could have been rescinded at any time; the same severance would have to be paid the month before renewal or the month after. His reason for pushing Gianelli out: "We wanted to explore the brain trust to see what other ideas there are for making the hospital solvent." This is all gibberish.
Meanwhile, Nassau Republican party chair Joseph Mondello denies any input in the decision, according to his spokesman. That's just hard to believe.
There's ample precedent for interference from GOP headquarters. Soon after the party returned to power in 2010, by regaining the county executive post and the legislature, it removed Martin Payson, a highly regarded NUMC board chair and hospital turnaround specialist, and replaced him with Rizzo, a malpractice lawyer in a GOP firm with close connections to Mondello. In 2011, after John Ciotti lost his county legislative seat in a stunning upset, Rizzo asked the board to hire the out-of-work lawmaker with no background in the field as the hospital's attorney, even increasing the job's compensation to $300,000.
Mondello has long seen Gianelli, who came into government as deputy county executive to Thomas Suozzi, as a political figure. And the GOP long considered the hospital a source of jobs and contracts. But Gianelli brought an unusual mix of policy and financial expertise, too. He quickly made his reputation in the field. He teaches hospital management at Columbia University and was elected a member of the governing board of the national organization of public hospitals. Even the late Peter Schmitt, as GOP presiding officer in the legislature, fought to protect Gianelli from party mischief.
There's no evidence yet that a national search for Gianelli's successor is underway. Our suspicion is that it will extend from Valley Stream to Hicksville, passing right through Republican Party headquarters in Westbury. In the end, the upside for the GOP is that it gets a few jobs, and the ability to steer some contracts to cronies. The potential downside is that under bad management, the hospital bleeds to death on the GOP's watch. If it comes to that, no amount of prayers will help.