Nassau, hospital officials rethink plans for NUMC after COVID-19

In mid-March, Nassau University Medical Center had dormant wings and numerous empty beds and faced a projected operating loss of $86 million this year.

Nassau County Executive Laura Curran and top hospital administrators were discussing ways to "restructure" NUMC, raising concerns among public employee unions that the hospital might be on the road to closure.

The hiring of a "turnaround consultant" with the authority to identify cost savings and consider the sale of hospital assets appeared near.

Then came COVID-19, which strained NUMC emergency room staff and filled beds throughout the 19-story hospital in East Meadow — and led Curran and other officials to begin rethinking NUMC's future.

NUMC's fiscal situation hasn't improved — in fact, emergency coronavirus spending is expected to total $20 million, according to hospital officials.

Nonetheless, Curran and others say the virus crisis has reminded them of NUMC's key role as one of the region's few public safety-net hospitals.

The officials aren't specific about their plans.

SEE PHOTOSSee in photos how the coronavirus is changing life on LI, in NYC during April 2020

They say generally the 530-bed hospital may be able to take on some new roles, such as handling patient surges if the virus flares again. And possible emergency federal aid could help the bottom line in the short term.

“This pandemic changed my perspective on a lot of things, including on the role of NUMC,” Curran said in an interview.

“The size of the structure and the campus and the number of beds is and was clearly an issue," Curran said.

"Before the pandemic, there was a glimmer of hope that something new could be built," Curran said, although "we hadn't settled on a final plan of action."

But “post-pandemic, the world has turned completely upside down," Curran said. The crisis, “for instance, showed us that this empty space could be useful in a crisis. That’s something we have to look at going forward.”

Adam Barsky, chairman of the Nassau Interim Finance Authority, which controls the hospital's finances, said operating deficits would remain an acute problem that must be fixed after the coronavirus crisis.

"This event is unique in many ways," Barsky said.

"The fact that they had empty beds became an asset in this particular situation," he said. "It doesn’t necessarily mean it justifies being in a state of empty beds forever, just in case there’s another pandemic.”

In the short term, the pandemic may make NUMC eligible for reimbursements from the Federal Emergency Management Agency, Barsky said.

However, “it’s not going to change the long-term prospects that the hospital has significant financial challenges ahead of it,” he said.

During the pandemic, NUMC opened up four floors for COVID-19 patients and purchased 15 ventilators.

Doctors pitched in to relieve the hospital's respiratory therapists and learned the mechanics of putting patients on ventilators. NUMC set up an OB-GYN unit to serve NYU Winthrop Hospital, which turned out not to need it.

Before the crisis, NUMC generally staffed only 350 of its 528 beds. Some hospital floors were never built out, and two floors are "empty shells" with no rooms, said Robert Detor, chairman of NuHealth, the public-benefit corporation that runs the hospital.

The intensive care unit, normally capped at 42 beds, now has capacity for 82 patients, hospital officials said.

As of last Wednesday, NUMC had treated 670 COVID-19 patients and discharged 455, while 215 coronavirus patients had died.

A total of 214 patients had been on ventilators, with 32 intubated as of Thursday, Detor said.

One hundred thirty-six hospital staff members were quarantined for COVID-19. Six employees at NUMC and its nursing home, the A. Holly Patterson Extended Care Facility in Uniondale, have died.

“We provided care to the persons who came through our doors," Detor said. "And in addition to that, we tried to structure ourselves so we had excess capacity because we had space [to] help any hospital that might be overrun by patients.”

Dr. Anthony Boutin, interim president and chief executive of NUMC, said, “Right now, it looks like we’re a needed entity in the community. If we didn’t have the resources, we wouldn’t be able to help out as much as we’re helping right now.”

Said Curran: “We saw through this pandemic the need for a real coordinated effort between all of the five hospital systems … I believe NUMC played a key role here.”

But Detor, Curran, Barsky and many others say NUMC still faces alarming fiscal problems.

The hospital's deficit rose from $25.7 million to $46.6 million, from 2017 and 2018. NuHealth had a total operating revenue of $587.6 million in 2018, according to audited financial statements.

In 2020, NuHealth is projecting operating revenue of $552.5 million, but expenses are projected to be $638.5 million, according to the 2020 budget.

NuHealth has projected a total of $20 million in spending for coronavirus response. NuHealth is applying for federal reimbursement.

Detor said the hospital is experiencing a "liquidity crisis," and is likely to run out of cash by the end of March 2021 if outside aid isn't forthcoming.

Many of NUMC's patients are uninsured. Medicaid and Medicare reimbursements don't cover the cost of their care, and the emergency room has become a de facto primary care physician for many people.

Nassau County stopped subsidizing the hospital in 2014, when it provided its final $13 million annual payment. But the county guarantees $188 million in hospital debt.

Barsky said NIFA, which also controls Nassau County finances, would focus on issues including the viability of health care businesses NUMC started in recent years.

He said NIFA will examine "where they were trying to compete with other hospitals and failed — and the question is should they continue to fund money-losing businesses?”

Barsky declined to be specific, but said the ventures to be examined could involve trauma care or “whatever they’re doing for cardiac facilities."

NIFA had been seeking to hire a "turnaround consultant," Alvarez & Marsal, of Manhattan, to fix the hospital's finances. But that plan is "on hold … until we get through this crisis," Barsky said.

NuHealth has hired Alvarez & Marsal for a three-month, $1.165 million contract to prepare the health system's application for federal reimbursement.

In discussing NUMC's future post-crisis, health care experts cited the trend in the hospital industry, nationwide and on Long Island, toward consolidation and mergers.

“The underlying issues that NUMC had before the outbreak are still going to be there afterwards," said Kevin Dahill, chief executive of the Nassau Suffolk Hospital Council, a Hauppauge-based trade organization that represents 22 hospitals.

Dahill called it "a very fair question to be asking: How could we justify taking a lot of excess capacity out of the system after what we’ve been through? However, that capacity comes at a cost. And if part of that capacity sits idle, it comes at a greater cost that’s going to all have to be factored in and considered.”

Dahill said when the pandemic is over, New York State may decide to look at the hospital system as a whole, and plan a regional approach to ensure there are enough beds available on Long Island.

That could mean, "how do we maintain a level of excess capacity on Long Island, rather than having to create these field hospitals?" Dahill said. "I think it’s ripe for strategic discussion.”

Leemore Dafny, a Harvard Business School professor who studies health care strategy, said the American health care system has moved toward treating patients in outpatient or ambulatory settings.

“We just don't have that inpatient capacity, because frankly we haven’t needed it," Dafny said.

"Hospitals used to exist in every town because we couldn’t do much for patients, and they just needed to be somewhere when they’re dying, effectively,” she said. "The role of a hospital has changed, and so our utilization is not as high as it once was."

Dafny said there's merit to the argument that “we’ve starved our safety-net hospitals," and "we aren’t enabling them to provide the standard of care that is offered elsewhere.”

But “does it make sense to keep all of these open? Are we better off having smaller but more solid facilities for our patients, even if that means some employment loss and would push some more unreimbursed care toward facilities that haven't historically provided it?"

Barsky said one scenario he doesn't foresee is another hospital system agreeing to take over NUMC.

"People may affiliate with them," he said. But "there's no hospital network system out there that's ever going to take over NUMC … Nobody's going to merge with them, because they have a $600 million" liability for pensions and other employment benefits.

Jerry Laricchiuta, Long Island regional president of the Civil Service Employees Association, with a local that represents more than 3,000 NUMC employees, argued for significant public subsidies to bolster the hospital.

“You don’t even have to be in this business, you have to be a human being with a brain and have a little bit of common sense, to figure out that a big hospital right in the hub of Nassau County is not just a little needed, it’s part of our health care main artery here," Laricchiuta said.

"We have a ship in New York Harbor because the governor didn’t believe we had enough beds,” Laricchiuta said last week of the Navy hospital ship USNS Comfort.

The Comfort arrived in New York on March 30 to help with a possible surge in COVID-19 cases. In a meeting last Tuesday, Gov. Andrew M. Cuomo told President Donald Trump that the state no longer needed the ship, which according to NBC New York had treated only 179 patients.

By Scott Eidler

scott.eidler@newsday.com@ScottEidler

Scott Eidler is a deputy editor for the towns department at Newsday. Scott has worked at Newsday since 2012 and previously covered municipal government and education.