1/29/2010 Update:

Mason calls for transparency – for over 2 years now

Hoboken Councilwoman Beth Mason is calling on Mayor Dawn Zimmer (who was “Absent” from this weeks meeting) and the Executive Board of Hoboken University Medical Center to release all financial documents as well as their plan to keep the hospital viable in a video news release:

1/27/2010 update:

HUMC firm that there’s no worries

• CEO Spiro Hatiras insisted that HUMC absolutely will not close by any means.
• That the “10% salary give-backs across the board” will result in $11.5 million in savings,
• Coupled with the expected $7m from the state ($1m applied to 2009, and $6m for 2010) would,
• Result in a “surplus” of over $3m+ that would be used for capital improvements (elevators, etc.) – and not re-instating the employee salaries.

Your Mayor and HMHA board member Dawn Zimmer didn’t show up for this very important meeting.

First 15 minutes of the meeting tonight, where CEO Spiro Hatiras says “unequivocally were are not closing.”

ALL PREVIOUS UPDATES AFTER THE JUMP…

1/22/2010 Update:

HUMC Responds: “We are not closing”

Hoboken Municipal Hospital Authority Chairman Kevin Kramer sent Hoboken411 his reaction to the Christie Transition Team report that says “Hoboken University Medical Center will close in the next few months.”

“I am outraged by the untrue statement that is included in a report released today by the Governor’s office. Today, Governor Christie released 19 reports prepared by his Transition New Jersey subcommittees. The Subcommittee on Health’s 18-page report includes exactly one sentence regarding Hoboken University Medical Center, yet this one sentence is extremely harmful and flat out false.

HUMC is not closing.

No one from HUMC or the Hoboken Municipal Hospital Authority was ever contacted by anyone on the subcommittee. The report includes no data to substantiate the statement about HUMC, and I understand that some members of the subcommittee may have never seen any hospital financials or the final report before it was released. Notably, the report is dated January 5, which was before certain employee concession packages were ratified, and further, a financial recovery plan is in place that has already realized significant cost savings for HUMC.

The Governor’s office should take down this report from its website immediately.”

See original story below. The report from the Governor’s team also stated:

“We believe that Health Care Stabilization funding is critical for the viability of some of NJ’s most essential hospital and the patients they serve. However, it’s intent to “stabilize” a hospital and prevent access to care problem until the hospital can better position itself financially; its intent is not and should not be to temporarily float a failing hospital while a sustainable business model that would close as soon as funding ended.”

Mayor Dawn Zimmer endorsed the HMHA’s application for NJ Stabilization funding as a means to hold off financial disaster, something the Christie team is against. The question up for debate now is if recent budget cuts and employee concessions at HUMC will – as hospital officials claim – put Hoboken’s taxpayer-owned hospital back on track. As always, Hoboken’s most read comments section is open for your thoughts.

1/22/2010 Update:

HUMC to Close in Months???

A new report from new Governor Chris Christie’s office paints a bleak picture for Hoboken University Medical Center. The Republican’s transition team formed a sub-committee on Health, which is out with its recommendations. This is on Page 5:

“On December 22, 2009, the Corzine Administration announced $40 million in Health Care Stabilization awards to 9 hospitals. While many of the hospitals receiving aid met the above criteria, at least one hospital, Hoboken University Medical Center, will close in the next few months even given this grant funding. We view this as a misuse of limited state resources for health care stabilization.”

The committee report goes on to suggest that the new Governor should consider REDUCING the grant awards, and take back money that Corzine promised to the hospitals just last month. The Hoboken Municipal Hospital Authority board and HUMC officials said the grant money was critical to the hospital, which ended up running a “surprise” $22 million dollar deficit last year. Though HUMC was not on track to close (at least not publicly) within “the next few months,” a reduction in state aid could hasten its demise. That would have the effect of blowing a massive hole in the City of Hoboken’s financial picture, as well as put dozens out of work.

Will the hospital close?

The idea that advisors to the Governor believe the hospital will close “in the next few months” is scaring a lot of people today. Hospital officials are denying they will close. HUMC workers just accepted a 10% pay cut to keep the hospital open. Does the state know something Hoboken officials don’t know?

Remember Hoboken411 has been covering this story in depth from the beginning and was the only source for in depth coverage of the “Cons” of taking over the hospital while other older media was buying the line about a Harvey Holzberg-led “Miracle Recovery” hook, line and sinker.

12/23/2009 Update:

Some say this is great news, while others think it’s just delaying the inevitable…

HUMC gets a lease on life

The Chairman of the Hoboken Municipal Hospital Authority reached out to Hoboken411 yesterday and said:

“The NJ Department of Health and Senior Services (DHSS) announced this afternoon that HUMC will receive $7,000,000 in stabilization fund grant money.

You can find a copy of the DHSS announcement here.”

Some questions linger… such as:

• How long will this help the hospital? Enough time to stop the bleeding?
• Or will we see a re-run of the crisis again in a year?

12/16/2009 Update:

Hospital Meeting also tonight at 7pm

How convenient! The Hoboken University Medical Center board meeting is tonight – the same time the City Council meeting takes place, and even the Hoboken Holiday Concert put on by the kids!

If history serves as any reference, many governmental processes are pushed through when families are busy living their lives (watch out for the Obama health care catastrophe as well this Xmas!)

Here’s the Agenda for your review (if you bother going!)

CONTINUE THE HOBOKEN411 COVERAGE FROM 2009 BELOW…

11/24/2009 Update:

Hospital Board Meeting Tonight – 7pm

Should be another depressing presentation & meeting for the Hoboken taxpayers. The public is invited to attend the Hospital Authority’s monthly meetings at Assumption Hall in the Hoboken University Medical Center Main Building, 308 Willow Avenue.

Keep in mind there will be angry residents attending, but the real news is whether we get the $10+ million dollar grant (as CEO Spiros Hatiras mentioned in last week’s City Council Meeting) – and that won’t be known until December. So you might want to ration your angry juice a little longer…

A Hoboken411 reader provides his own analysis of what concerns him (and this doesn’t even include the potential problems with the unions, either!):

Hospital huge concern for Hoboken Taxpayers

“The amount the city owes on the bonds is now $65 million, up from $52 million when issued (now includes interest on the bonds.) What this means is that the longer the Hospital problem goes unresolved, the greater the amount Hoboken taxpayers will be on the hook for.

The takeaway here is the sooner the citizenry forces elected officials to confront this problem the less it will ultimately cost the taxpayers.

10/29/2009 Update:

CFO RESIGNS! Metsch joins board!

The board of the Hoboken Municipal Hospital Authority met last night for the first time since the bombshell news that HUMC lost $22 million last year.

The news is so grim yet another member of the so-called “Miracle Turnaround Team” has resigned. Hospital Chief Financial Officer Ron DeVito has “resigned as CFO as of May 1, 2010” following the bad news. New HUMC CEO Spiros Hatiras made the announcement, adding he relieved DeVito of his duties immediately. Hatiras and DeVito were part of the Hudson Healthcare team brought in by former CEO Harvey Holzberg. Hudson Healthcare small management team was paid $16 million last year to administer the hospital.

Hatiras forecasts more losses, break-even after 2010

Hatiris says the losses for this year will likely be around $8 million before depreciation, and he hopes to break even the following year. It is a far cry from the “Turnaround Miracle” Holzberg was selling. The audit report blames poor financial practices by the Holzberg/DeVito team for accounting overstatements that made HUMC’s losses appear smaller than they actually were. Hatiris says his staff is currently working on a new strategic plan for the hospital. Hatiris admitted Holzberg’s claim that HUMC was “recession proof” was wrong, and that the economic downturn also had an effect on the cash flow. Councilwoman Beth Mason attended the meeting to get more information about the Hospital’s status. Acting Mayor Dawn Zimmer, who actually has a seat on the Hospital Board as Mayor – did not attend.

Wait, what’s Jonathan Metsch doing on the board?

People who showed up for the meeting were surprised to see Jonathan Metsch sitting at the board table. They learned Acting Mayor Dawn Zimmer put him there as her designee without informing the council and public. That’s in contrast to her appointment of Tejal Desai, which was publicly discussed and voted on at the last council meeting. Metsch has been a very vocal supporter of Zimmer, but ironically left his job as president of Jersey City Medical Center with much the same cloud around him as the one now haunting Ron DeVito. This is how the weekly paper noted his history just two months ago when Zimmer appointed Metsch the head of her Swine Flu Task Force:

“Metsch was criticized during his tenure at JCMC for making more than $800,000 while the hospital languished in debt. He left JCMC amid budget turmoil after he was forced to produce an audit to parent company Liberty Health that showed a monthly loss of $3 million.”

You read that right! Jon Metsch was part of the same kind of financial mess at JCMC that currently plagues HUMC, yet Zimmer has entrusted him to serve as her representative on the HMHA board. The appointment follows campaign contributions and many letters of support for the Zimmer campaign. Metsch is also one of the founders of Hoboken Revolt, and was instrumental in leveraging the group for Zimmer’s political gain.

Painful audit, then Metsch quit JCMC

Here is a portion of an 9/26/06 article published by the daily newspaper and archived here about Metsch:

“The sea of red ink had been rising for years when, several months ago, Jonathan Metsch, the president and CEO of the Jersey City Medical Center, told state officials that the hospital needed $3 million more per month to keep afloat. The hospital had received several one-shot subsidies before… but before agreeing to this latest request, they wanted to make sure they weren’t throwing good money after bad.

The next day, after a lunch meeting with board members, Metsch quit.”

Other reports on Metsch’s politically charged tenure at JCMC are even less flattering. Here is one from Jersey City’s Urban Times News entitled Jersey City Medical Center – What You Don’t Know Can Kill You. An excerpt from the 7/16/2003 report:

“Jonathan Metsch, the CEO of the ostensibly cash strangled institution gives himself a $100,000 raise each year. Metsch is currently at $850,000 a year, while crying poverty.

Cash flow problems are exacerbated by poor credit. Vendors are unwilling to supply the hospital except on COD terms. There are currently about $40 Million in delinquent payables. Consequently, suppliers ship urgently needed supplies overnight with the hospital paying express charges, and the suppliers charge top prices because of the poor credit and payment history.”

Did Zimmer do her due diligence before quietly appointing Metsch to help HUMC turn around? Why didn’t she announce the appointment? The more things change…

See original story on the HUMC Red Ink after the jump.

10/27/2009 Update:

HUMC is bleeding money!!!

2008 ends with a $22.3 Million LOSS

Those who stood up to say the $52 million plan to “save” St. Mary Hospital would only buy time for a flawed business model are sad to see the latest numbers are proving them right. According to audited financial statements released by the Hoboken Municipal Hospital Authority, Hoboken University Medical Center incurred a loss from operations in 2008 of $22.3 million, leaving it with net assets at the end of 2008 of $13,435,124. That’s down from net assets of $35,138,364 at the end of 2007. The burn rate is enormous!

(FULL 2008 REPORT HERE)

Massive decline in cash balance

At the end of 2007, HUMC reported over $7.5 million in cash on hand. That number dropped to $361,167 at the end of 2008. That’s about one day’s worth of cash and not enough to pay bills vendors are waiting longer and longer to see paid. The cash St. Mary owner Bon Secours left behind to help convince Hoboken into taking the hospital over is gone. So is former CEO Harvey Holzberg, who likely made millions while he was in charge.

Hudson Healthcare cashes in while Hospital bleeds

The private firm set up by Holzberg and his team to manage HUMC for the HMHA is listed as paid nearly $16,000,000 for their services in 2008, up from just over $12,000,000 in 2007. A select few have been getting paid handsomely while a $52 million taxpayer guarantee – and the jobs of Hoboken’s third largest workforce – hang in the balance. The HMHA still won’t release the General Ledger outlining all of their hospital’s financials to Councilwoman Beth Mason, even thought she sued and won the right to see it. Can you guess why?

HUMC needs a massive cash infusion to avoid doom

Former Mayor David Roberts sold his “Save St. Mary” plan by claiming the city’s $52 million dollar taxpayer guarantee on HUMC bonds would be enough to turn things around. A dedicated few led by then-private citizen Beth Mason pleaded with the City Council and Local Finance Board to consider a more viable plan to save the facility since the existing business model was clearly failing to the point that Bon Secours wanted to shut St. Mary down.

Those pleas fell on deaf ears.

Application for state assistance

The Hospital recently applied to the New Jersey Department of Health and Senior Services for a critical Health Care Stabilization Grant. In release Acting Mayor Dawn Zimmer claims, “HUMC is well positioned to receive this grant which will greatly assist the hospital with its short term needs.” She probably was told that by the HMHA. Turns out, not so much. Last year HUMC requested a $7.6 million grant and was given ZERO. The state Selection Committee determined Hoboken did not meet the criteria. This year the grant fund only has $9 million to go around for the whole state. Even if HUMC got half that (not likely) it would barely put a dent in its deficit.

Condition Critical – Code Blue

Will it only be a matter of time before the plug is pulled? Who do you trust to take on this challenge in the Mayor’s office? Will Dave Roberts’ prediction that the city may someday have to up-zone the property for high-rise development to recoup its losses come true?

See earlier numbers and comments after the jump…

1/26/2009:

Is the house of cards at Hoboken University Medical Center beginning to fall?

Layoffs, service and pay cuts likely ahead

Critics said putting the taxpayers on the hook for the $52 million dollar bond to continue operating a money losing hospital was dangerous and imprudent, but the thirst to add hundreds of new jobs to the public payroll (and hundreds of millions in revenue) was too much for Mayor David Roberts to resist. With an ironclad majority on the city council, he was able to swing the deal quickly despite strong arguments to go slow and do due diligence to protect the taxpayers. Within months the new management was touting a “miracle turnaround,” but it wasn’t long before they were forced to scale back their plans and restructure their debt obligations to free up cash flow. They continued to tout their miracle even as they went to court to block the public’s right to see their books. Now, the hospital is planning layoffs.

$2.2 Million Dollar Deficit

According to an October status report HUMC was running a $2.2 million dollar deficit. Now hospital management is working on a plan to cut at least $1.5 million dollars in payroll through layoffs and pay cuts. No word on whether HUMC boss Harvey Holzberg is taking a cut in his estimated $800,000 salary.

HUMC public relations chief Joan Quigley (also a State Assemblywoman) blames the “downturn in the economy” for the hospital’s problems. Others note redundant hospitals are closing all over the country, and what ailed St. Mary hospital continues to plague HUMC. Still, rich contracts have been granted to politically connected contractors now building the new emergency room, which may be complete in time for Mayor Dave Roberts to cut the ribbon before he leaves office at the end of June.

Surprise to the City Council

Last summer the management of HUMC showed up to the City Council to press for changes to their bonding with a pledge that they were “doing great” and that they would keep the council informed of their progress, good or bad. Apparently they haven’t communicated much since. Second Ward Councilwoman Beth Mason sent out this statement about the impending cuts:

“I am deeply upset at the news that the hospital will be laying off workers and very concerned that the declining financial health of the hospital that has been kept a secret until now. Again, there is a problem with transparency at the Hospital Authority that needs to be addressed.

I hope my colleagues on the council as I requested at Wednesday’s meeting will join with me in demanding full financial disclosure from the hospital authority.”

Meanwhile the board of the Hoboken Municipal Hospital Authority will meet at 7pm on Wednesday, January 28th to consider a budget. Don’t expect much more than a few opaque numbers on a few pages without details. The HMHA has spent many thousands of dollars trying to hide its true financial status from the public.

Technorati Tags: Beth Mason, Bleeding, Bonds, cash infusion, close, Dawn Zimmer, Deficit, Doomed, Harvey Holzberg, HMHA, Hoboken University Medical Center, HUMC, layoffs, losing money, Meeting, Red ink