Tuesday, April 22, 2008

Solaris CEO: No Money for Muhlenberg

About 150 people chanted, some holding candles, in a rally Monday (April 21, 2008) at Municipal Court to prevent the closing of Muhlenberg Regional Medical Center. But once inside at a City Council meeting, they heard a presentation that basically said 10 years of deficits have dug a hole from which the hospital can’t realistically climb out.

“I wish Muhlenberg had the funds to get through this crisis, but it doesn’t,” said John McGee, chief executive officer of Solaris Health Systems, which acquired Muhlenberg in 2007.

Negative forces include the burden of uncompensated care for illegal immigrants, low reimbursements for Medicare and Medicaid programs and battles with insurance companies for payment, presenters said. Muhlenberg not only has an $18 million deficit, but was bolstered by $22 million in loans from Solaris partner JFK Medical Center.

The decision to close the hospital still rests with Heather Howard, commissioner of the state Department of Health and Senior Services. A hearing set for May 6 will allow residents of Plainfield and neighboring towns to give testimony on why the hospital should not close. Howard could not take part Monday, but Deputy Commissioner William Conroy was present to answer council questions.

The litany of why the hospital could not remain viable was compelling, but council members’ questions still probed the possibilities of a sale to an outside entity. However, a buyer would have to prove not only having the wherewithal for a sale, but also the ability to operate the hospital and deal with the financial obligations.

If it lost acute care functions, Muhlenberg would still retain numerous services, including a satellite emergency room, imaging and lab services, the school of nursing, its mobile intensive care ambulance, and non-clinical functions such as retention of medical records. A new transportation service would be added, McGee said.

“Our first priority is getting through the process,” he said.

The hospital’s closing costs have been tabbed at $70 million. Of about 1,000 jobs, only 300 might be saved.

City Council members raised numerous questions about the closing and pressed for some way to save the hospital.

“This community’s hurting,” Councilman Rashid Burney said. “This is our family. Muhlenberg is our crown jewel. We don’t want to see it go.”

But McGee’s responses all came back to the same bottom line. The hospital was not only losing money each year, it owed $22 million to JFK Medical Center for cash infusions to keep it afloat. The debt was causing bond insurers to threaten JFK. Since 1997, when state hospital grants went flat, 18 hospitals closed.

“There’s no money,” McGee said.

A task force formed by Assemblyman Jerry Green has been working with area hospitals and other entities to deal with effects of the closing. Jay Jiminez of St. Peter’s Health Care said a gap exists in services including obstetrical care, mental health and primary care. Five sub-committees are still studying ways to address the gap as well as transportation issues and loss of employment.

Although Green and McGee both professed respect for each other, Green still called for a probe of Solaris financial records and the role of the past city administration in addressing the hospital’s mounting problems since 1997.

After the presentation, residents spoke out against the closing.

“It’s a sad day today for the poor people,” Nancy Piwowar said, noting Muhlenberg began as a free hospital to serve medical needs.

--Bernice Paglia

3 Comments:

Anonymous Anonymous said...

Jerry Green is so transparent! I was particularly taken with the following: "Green still called for a probe of Solaris financial records and the role of the past city administration in addressing the hospital’s mounting problems since 1997."

Is he kidding? He is going to try to lay this at the doorstep of the past mayors (Fury and McWilliams) and city council (Dunn, Urquhart, Montgomery, Scott, Hendricks, Mitchell, Van Blake, Carter, Storch, Mapp, Blanco, Davis, Hollis). That's an awful lot of officials, Bernice. He is the STATE legislator who always claimed responsibility for Muhlenberg's fortunes. He can't now say that the past two administrations might have been responsible. He took all that money from Alman Group and his legislative mailings always tout Muhlenberg as one of his greatest accomplishments. This guy is something else.

8:41 AM  
Anonymous Dotttie Gutenkauf said...

State Health & Senior Services Commissioner Heather Howard refuses to attend community or Council meetings to discuss Muhlenberg because, she says, as the one who must make the final decision she must "recuse" herself from the process.

This is the same person who testified to the State Senate that Muhlenberg would have to be "sacrificed" to save JFK. You can listen to that on the state legislature's website. Are we being screwed or what? The person who says she has yet to make up her mind has already made up her mind.

As for Jerry Green, even McGee admitted last night that without Jerry's help in getting state funds Solaris would have tried to close Muhlenberg years ago. And Jerry called on the Council several months ago to get a full audit of Solaris' books. Joe and I have reminded the Council of that at virtually every meeting--including last night. Perhaps the State should insist on a full audit before approving their application to close--but I wouldn't want anybody on Heather Howard's staff to do it!

10:00 AM  
Anonymous Anonymous said...

I was particularly struck by how McGee could not answer the simple question - how much will it cost to buy the hospital. He had figures and stats for JFK at his fingertips, but could not tell us how much we would have to pay for the hospital. If you are selling something, don't you know the price? This is what doesn't pass the smell test.

10:05 AM  

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