The financial crisis continues at the Nassau Health Care Corporation (NHCC), according to Comptroller Howard Weitzman's latest monthly review of cash balances at Nassau's only public hospital.

"At its current level of income and expenses, we concur with NHCC's own projection that it will run out of cash by October," Weitzman said. "In that event, it will require emergency assistance to keep its doors open. The short-term scenario will be much improved, however, if current payment issues with the state and federal government are resolved."

Nevertheless, Weitzman said the hospital corporation's long-term trend continues to be of grave concern. "NHCC management must take all actions necessary to preserve this vital county healthcare system," he said.

As a result, Arthur A. Gianelli, acting president/CEO of the Nassau Health Care Corporation (NHCC), announced one of the upcoming strategic plan initiatives, the consolidation of the 8th and 11th floors of Nassau University Medical Center, a move that will save $2 million annually in staffing costs while improving patient care. Presently, both floors are underutilized since neither of these floors is ever filled to capacity, leading to opportunities for consolidation of post-surgical patients from the half-filled 8th floor with cardiac patients on the 11th floor, which has ample available rooms.

"The consolidation of the 8th and 11th floors will improve patient flow and quality of care while reducing expenses to meet the current census at NUMC," said Gianelli who credited Julie Mirkin, senior vice president for Patient Care Services, with recommending the initiative.

An impact study was completed by reviewing the current census, staffing, location of patients and physician preference. "The $2 million annual savings will be achieved by reducing the staffing costs of forty full-time equivalents. It will be accomplished by not filling vacancies, reducing overtime and reducing agency per-diem nurses. No NHCC nurse will lose their job as a result of this floor consolidation," said Gianelli.

It is anticipated that when the consolidation is completed around mid-July, the 11th floor with 62-room capacity will have 31 post-surgical patients and 31 cardiac patients.

Steven Walerstein, MD, medical director and NHCC Senior Vice President for Medical Affairs, and Mirkin, jointly indicated that "Patient care will be improved because it will consolidate all surgical patients with nursing staff specialized in treating surgical patients and all cardiac telemetry patients with nurses specialized in treating cardiac conditions."

The updated strategic plan, expected to be unveiled in mid-July 2006, will address financial and quality of care issues, A. Holly Patterson nursing home and business plans for the various departments. "It is my intent to restore fiscal stability and high quality care. I remain confident that based on a skilled staff dedicated to fulfill our mission and our role as a teaching hospital, we can achieve our goals," Gianelli stated.

The comptroller's review finds that since the last review five weeks ago, available cash and cash equivalents fell by $7.5 million to $3.1 million, and the corporation's working capital decreased by $7 million to $7.8 million.

The corporation projects it will have a negative cash position by October as a result of the state's reduction in Medicaid reimbursement and the elimination of increased Medicaid assistance approved by the legislature. An increase in inter-governmental payments and favorable resolution of Medicaid assistance legislation - both currently under consideration in Albany - would postpone this cash crisis. Such payments are not included in NHCC's cash flow projections at present since the amount and timing of such payments is not definite.

Gianelli is currently updating the health care corporation's strategic plan, with the help of the county's consultant, Manatt, Phelps & Phillips. The plan is expected to project the amount of additional subsidies, if any, required to stabilize the corporation. Each year, Nassau County purchases services from NHCC and pays subsidies to it with a combined value of approximately $60 million.

Earlier this year, Nassau County refinanced its share of the historic settlement with big tobacco companies. Up to $98 million of the monies raised can be used, with the approval of the legislature, to provide additional subsidies to NHCC.

The comptroller reinstated monthly reviews of NHCC's cash accounts in December 2005, following the corporation's failure to meet its 2005 budgetary goals. The report is distributed to the NHCC board, the county executive, the Nassau Interim Finance Authority, the Nassau County Legislature and the comptroller's Independent Audit Advisory Committee. The full cash report may be read or downloaded at www.nassaucountyny.gov/agencies/comptroller/index.html.