GIANELLI ANNOUNCES RIGHTSIZING OF NUHEALTH’S OPERATIONS IN RESPONSE TO $25M PENSION COST INCREASE AND $15M CUTS TO MEDICAID REIMBURSEMENTS

FOR IMMEDIATE RELEASE
November 16, 2011

PRESS CONTACT:
Shelley Lotenberg
shelley@numc.edu
516-572-6055

GIANELLI ANNOUNCES RIGHTSIZING OF NUHEALTH’S OPERATIONS IN RESPONSE TO $25M PENSION COST INCREASE AND $15M CUTS TO MEDICAID REIMBURSEMENTS

East Meadow, NY…….Arthur A. Gianelli, President/CEO of the NuHealth System,  announces that due to a $25M employee pension cost increase, $15M reductions in Medicaid Disproportionate Share hospital reimbursements and $10M increase in costs for health insurance, pharmaceuticals and supplies, he has made the difficult decision to initiate, effective November 16, 2011, the rightsizing of NuHealth’s operations, which for two consecutive years—and for the first time in its history—ran surpluses from its operations in 2009 and in 2010. Medicaid Disproportionate Share payments are supplemental payments to help hospitals like the Nassau University Medical Center to offset losses incurred in taking care of patients who are enrolled in Medicaid or are uninsured.

“Coupled with an environment of reduced Medicaid Disproportionate Share payments due to rule changes promulgated by the Centers for Medicare and Medicaid Services, a $25M increase in pension costs is not sustainable at current staffing levels, for a public benefit corporation with a $553M annual budget. These costs force us, after much agonizing, to initiate a targeted workforce reduction of 175 employees, with an additional 77 who had accepted an incentive in late October 2011, with a commitment to do everything in our power to mitigate the impact of these cuts and protect our mission,” stated Gianelli.

Gianelli further explains the compelling reasons for the NuHealth System’s necessary rightsizing: “Since 2009, pension costs have risen dramatically.  With the 2012 pension bill that we just received, pension contribution costs will have risen from $17 million to $42 million – a $25 million increase. NuHealth now pays an average of 18.9 percent of payroll to the New York State Employee Retirement Fund, far exceeding the pension contribution levels of its competitor hospitals.”

He went on to add: “Given this staggering growth in pension costs and significant cuts to Medicaid Disproportionate Share payments, NuHealth has no choice but to restructure its operations, right-size its workforce to cover every dollar of its increase in pension contributions, reductions in reimbursements and to implement operational efficiencies. The cost of a public sector workforce is simply too great to sustain at current staffing levels of 3800 employees.”

While NuHealth is re-organizing its operations to absorb the reductions in its staff, Gianelli noted: “Of the 175 employees who unfortunately will lose their jobs, only a very minimal amount provide direct patient care or housekeeping support, helping to minimize any impact to patients.”

“It is expected that, once this re-organization and rightsizing are completed, NuHealth should return to running balanced financial operations in order to continue to serve the community and all the vulnerable populations that have come to rely on us for almost eight decades,” concluded Gianelli.

ABOUT NUHEALTH
NuHealth is a Long Island health care organization delivering essential medical care and disease and lifestyle management to everyone at every stage of life.  Also known as Nassau Health Care Corporation, NuHealth is a public benefit corporation managing the operations of Nassau Medical Center, A. Holly Patterson Extended Care and a network of Family Health Centers that bring primary and specialty care out into the community.  By emphasizing wellness, cultural sensitivity and collaborative efforts with the North Shore-LIJ Health System, NuHealth is working to make good care more affordable and easier to access.

For more information about NuHealth or its Centers of Care, visit www.nuhealth.net.