Recently a list of 14 “Principles and Questions” relating to Hoboken University Medical Center were posted. Here are replies to those comments and responses to those questions.
The hospital does not receive ANY financial subsidies from the City of Hoboken. The entire revenue of the hospital is derived from private health insurers, state and federal insurers, federal Disproportionate Share (DSH) funds, and state grants. NO local money is received. On the other hand, Hoboken UMC pays the City of Hoboken and its agencies about $1.5 million for rental space and parking fees.
Authority Members and hospital administrators have explored the possibilities of transferring to 501.c.3 entity and made preliminary plans to do so. Meetings have been held with representatives of the Department of Health and Senior Services and with the Health Care Facilities Financing Authority, as well as investment counsel. However, the state of the global economy has made it almost impossible to obtain funds for financing that conversion at this time, so the advice of all concerned is to put such plans on hold until the economy improves.
The hospital (assuming the writer means the Authority) does present financial and other reports at public meetings ten times a year, once a month except in December and August. Documents are presented to the Authority and made available to the public and a question-and-answer period is scheduled at every meeting. Seldom does any member of the public attend although all meetings are advertised, as required by the Open Public Meetings Act.
The hospital IS financially stable. Rumors to the contrary are incorrect and panic-inducing. Monthly reports of the five key indicators are sent to the New Jersey Health Care Facilities Financing Authority, a representative of State Government is a member of the Authority, and the Governor has appointed a member of the Board of the Management Corporation. All receive regular reports and participate in decision-making
The hospital expects to meet its bond payments adequately. The plan to refinance bonds, approved by the City Council in spring 2008, was not followed as planned through no fault of the hospital. The imposition of a State Fiscal Monitor on the City of Hoboken lessened the value of the City’s guarantee. This fact, combined with the downturn in the economy, made refinancing more costly.
Figures for the entire year of 2008 will be presented to the Authority on January 28th and will be audited thereafter. The figures presented will show a decline in revenues in the last quarter of 2008, and steps have already been taken to reduce expenses to compensate for that loss. The hospital will present a balanced budget for 2009.
The Authority has already selected in a public process an auditing firm, retained and received a report from a national firm with expertise in setting executive compensation. A full-time corporate compliance officer is employed on behalf of the hospital and operates under the guidance of a law firm not based in Hoboken or related to the Authority.
A nationally recognized firm was consulted on executive compensation. The CEO’s compensation was determined by the Authority to be reasonable based on his level of expertise and has been publicly disclosed. The CEO receives no benefits from the hospital.
The search process for the CEO’s successor has been completed, with participation of a national search firm expert in the health care field. The Authority’s appointed search committee included the Mayor, the Authority Chairman, and the President of the Medical Staff. It would not be appropriate for “the public” to express its opinion on the selection of a leader of a professional health care organization.
Hoboken UMC submitted a grant application to the Department of Health and Senior Services for $7 million but was turned down because, as Deputy Commissioner Matt D’Oria said in his December 3, 2008, letter: “the application did not adequately demonstrate that the services at risk of closing could not be maintained through the end of SFY 2009. Presently, Hoboken University Medical Center has completed financing and operational improvements which will improve cash flow going forward and provide sufficient capital to maintain existing operations.” In other words, when compared to other hospitals in the state, Hoboken UMC was not considered to be in need of rescue funds.
The hospital’s conflict of interest policy and corporate compliance plan is available by request through the Corporate Compliance office. The policy is based on the recommended federal and state guidelines and the number for an anonymous hotline to receive complaints is posted throughout the facility.
Job descriptions for employed physicians and payments to physicians are considered to be proprietary information and will not be posted on the hospital’s website.
Hoboken UMC has reduced its ALOS (average length of stay) by about one and half days during the final few months of 2008, and this improvement has contributed toward a lowered average daily census. The lower ALOS has already produced some savings in that overtime has been reduced from 5 to 1 percent.
If hospital administrators were to engage in discussions with administrators of other hospitals about distribution of services, they risk criminal violations of the anti-trust act. However, the Department of Health and Senior Services is committed to creating efficiencies in the delivery of health care in New Jersey and Hoboken UMC is committed to working with the Commissioner and her staff to support these efforts.
(14a.) Hoboken UMC does not have a “contingency plan” for closure for two reasons: First, there is no intention to close; and Second, closure of any acute care hospital must be approved and overseen by the Department of Health and Senior Services and hospital activities prior to, during, and immediately after closing will be directed by that State Department.
SEE THE ORIGINAL LIST OF QUE$TIONS AFTER THE JUMP…
“We are very concerned with the lack of progress in getting straight answers from the Hospital board on the financial health of the hospital in addition to other concerns. Donna“
The Hospital – Principles & Questions
Access to high quality hospital care is essential either from an independent, financially sound, not-for-profit hospital (with no city government ownership or financial guarantees) in Hoboken, or through contractual, service and/or transfer agreements with another area hospital (with no financial subsidies from the City).
If the Hospital is financially sound as it has reported to City Hall, then it no longer should be City-owned, but revert to being a 401C3 not-for-profit entity. And the City should be relieved from “guaranteeing” the hospital’s bonds ($52 million).
Otherwise, the Hospital should make an immediate public presentation on its financial condition, addressing as well the following issues and questions.
If the hospital is NOT financially stable and self-sufficient the New Jersey Commissioner of Health should appoint an arms-length Blue Ribbon Oversight Committee to evaluate the situation and make mandatory recommendations in thirty days. The Report of the Committee should be posted on the web.
If the hospital cannot meet its bond payments, what is the impact on the City’s finances and property taxes?
The first step should be to review the most recent financial report for the period ending December 31, 2008. In the last quarter: Did Accounts Payable increase? Were Accounts Receivable from Medicare and Medicaid accurate or over-stated? Were reserves taken in as revenue appropriate or excessive? Was the “provision for doubtful accounts” accurate or understated?
The following advisors should be selected by the Board in a public process: external auditor, executive compensation, corporate compliance. Those selected should have no prior professional relationship with the hospital’s senior management,
The CEO’s total compensation should be “at market” and publicly disclosed, with confirmation of appropriateness by a “Reasonableness Letter” from the Executive Compensation consultant.
The Search Process for a new CEO, apparently currently underway, should be transparent and allow sufficient time for public review and comment. The City Council should approve the next CEO upon recommendation of the Mayor.
The State recently awarded six safety-net hospitals $44 million in Stabilization Fund Grants. How much did the Hospital apply for from the fund and what are the consequences of receiving no award?
The Hospital’s Conflict of Interest Policy and Corporate Compliance Plan should be posted on its web site.
Payments to physicians and their job descriptions should be posted on the Hospital web site.
The Hospital has the longest Medicare length of stay in the State and performed poorly on recently published quality measures. The Hospital’s Corrective Action Plan should be posted on its web site as should quarterly progress reports.
Is discussion underway with Hudson County’s other struggling hospitals to regionalize services? Is there a contingency plan in place if the hospital closes?