The Nassau Interim Finance Authority is searching for a “turnaround” consultant to address fiscal problems at Nassau University Medical Center, which has struggled with operating deficits and leadership turnover.
NIFA, the state board that controls Nassau County’s finances, is seeking proposals from a “hospital/health care turnaround consultant” to help with improvement of NUMC’s “finances and avoidance of a possible fiscal crisis,” according to a request for proposals the agency issued on Jan. 8.
The request comes several weeks after NIFA’s chairman, Adam Barsky, said NIFA was exploring whether to put NUMC under its financial control.
If NIFA were to take over hospital finances, it possibly could institute an employee wage freeze and require NUMC to submit contracts, budgets and union agreements to the control board for approval, Barsky said.
NUMC is Nassau’s only public hospital and treats many uninsured and low-income patients. NuHealth, the public benefit corporation that runs the hospital, posted a $46.6 million operating deficit in 2018, compared with a deficit of $25.7 million in 2017.
A June audit of NuHealth’s 2018 financial statements has also caused concern about the health system's finances.
The "going concern" note from consulting firm Grant Thornton said federal, local and state aid were scheduled to end or be cut back, prompting “substantial doubt about [NuHealth's] ability to continue as a going concern.”
With “going concerns,” accountants prepare financial statements with the assumption that the organization has enough funds to continue operating in the near future.
NIFA's request for proposals for a turnaround consultant is aimed at providing "us with some health care expertise,” Barsky said.
"Their problems are very significant, and there are going to have to be changes in the way they do their business,” Barsky said of NuHealth.
Changes could involve “doing something more in a certain area, or less in another. It just means how do they change what they’re doing to better serve the community and not create an overarching drain on the county,” he said.
Nassau backs $188 million in hospital debt.
Nassau County Executive Laura Curran said in a statement, “We need an evaluation of strategic options for patient care services in the future. With the uncertainty in Medicaid reimbursements and federal funding for safety net hospitals, NIFA’s RFP will give us the health care expertise we need.”
According to the RFP, the consultant could review the possibility and legality of major changes to NuHealth’s operations, such as acquiring or getting rid of fixed assets and facilities.
The consultant also could institute personnel changes, identify cost savings in clinical and operational areas and analyze data on patient admissions, discharges and length of visits.
In 2018, NuHealth announced a partnership in which Northwell would help NuHealth develop a five-year strategic plan. NuHealth chairman George Tsunis said then that Northwell was "assisting NUMC in a transformative rebirth — a turnaround."
Of Northwell's role, Barsky said, “there’s been a lot of studies at the hospital, and as part of the exercise what we’d have our consultant do [is] look at the studies and advise us of the feasibility of those plans."
Winnie Mack, Northwell senior vice president of health system operations, began in April as NuHealth's chief executive and president, but left after six months on the job. Tsunis is set to step down from the institution Friday after nearly two years as chairman.
Northwell Health spokesman Terry Lynam said, “We recognize the important role that NIFA plays in overseeing county finances, so we certainly understand its desire to pursue strategies for stabilizing NUMC’s finances. As we have for the past 15 years, Northwell will continue to support NUMC in whatever ways the county, state and NIFA believe would be helpful, specifically as it relates to clinical and operational services. Since Northwell began its affiliation with NUMC in 2005, we have worked with three separate administrations in offering recommendations to strengthen patient care, improve the efficiency of operations and achieve cost savings.”
Lynam said the largest “challenge facing NUMC is that the overwhelming majority of its patients are insured by either Medicaid or Medicare, which generate insufficient revenue to cover the cost of caring for those individuals.”
Jerry Laricchiuta, CSEA Nassau County Local 830 president, said “if it’s going to be a real health care expert that wants to look at this, I don’t think I have a problem with it — as long as we’re getting real live health care advice, and not a political tap dance so that we can be sold for parts.”