Nassau County Comptroller Howard S. Weitzman announced today that he will begin to monitor the Nassau Health Care Corporation's cash balances on a monthly basis, after a review by his office found a precipitous decline in NHCC's cash-on-hand during the first eight months of 2003.
Mr. Weitzman made the announcement at a joint press conference in Mineola with New York State Comptroller Alan G. Hevesi, who simultaneously issued a state audit of the public benefit corporation that concluded that its multi-year financial plan is unrealistic and that NHCC is likely to lose more money than it is projecting. (The State Comptroller's audit may be found at www.osc.state.ny.us. The Nassau Comptroller's review may be found at a link at the bottom of this page.) NHCC operates the Nassau University Medical Center, the A. Holly Patterson Extended Care Facility and seven community health centers in the county.
Mr. Weitzman said, "I am grateful to Comptroller Hevesi for his continuing help to Nassau County. His audit report focuses much needed public attention on the perilous finances of the Nassau Health Care Corporation, and the likelihood that the Corporation could run out of cash by late 2004 or early 2005 if its management does not take action to curb its losses.
"In our review of NHCC's cash balances, which complements Comptroller Hevesi's review of its financial plan, we discovered a 50 percent reduction in the Corporation's cash and cash equivalents since December 31, 2002. Both Comptroller reports lead to the same conclusion - that NHCC's assumptions are overly optimistic and that, so far, its plan to reverse its mounting deficits is not working.
"Unfortunately, NHCC's financial condition has a significant relationship to Nassau County's efforts to recover from the fiscal mismanagement of the 1990's," Mr. Weitzman continued. "The deal that led to its creation was the dying gasp of a failed administration, undertaken in order to prevent the county from becoming insolvent. Unfortunately, it encumbered the county with ultimate responsibility for $256 million in debt issued by the NHCC.
"At the same time, it created a public benefit corporation that lacks adequate resources and independence. As a result, I am concerned about the Corporation's continuing ability to serve the patients who use its facilities, in particular, indigent county residents and the county's prison population."
The Nassau Comptroller's report found that NHCC has been experiencing a steady decline in cash and cash equivalents since the end of 2002, when it totaled $56.4 million. By June 30, 2003, the accounts showed a balance of $42.8 million, and a balance of $33.5 million on July 31. A limited review of bank balances as of August 15 showed that NHCC's cash accounts had further declined to $27.7 million.
"While it is true that cash accounts are subject to normal fluctuations, it is still possible over time to discern a trend," Mr. Weitzman said. "It is clear from our review that NHCC cash accounts are falling at an alarming rate. The trend of declining balances must be reversed, for the sake of county residents who use these facilities and for the county, which guarantees the Corporation's debt. That is why we have decided to continue our reviews on a monthly basis.
"I want to acknowledge the cooperation of NHCC in the preparation of our report, as well as the Corporation's willingness to allow my staff to monitor its cash flow on a continuing basis," Mr. Weitzman said. "We also recognize that, like other health care systems, public and private, NHCC is operating in a difficult environment characterized by escalating costs and reimbursements that are often reduced and/or delayed.
"Nevertheless, it is clear from both Comptroller reviews that the Health Care Corporation's management team and Board of Directors will not meet their own projections for 2003 and need to take immediate, decisive action to stem the tide of red ink. If they do not, vital health services in Nassau and the county's financial recovery are both at risk."
Mr. Weitzman commended County Executive Tom Suozzi for initiating a major study of Nassau's role in providing health care to its residents. "The study is necessary in order to evaluate available health care options and to protect the provision of critical health services in this county. My staff and I intend to work closely with the Suozzi Administration in exploring these options."