June 21, 2006

COMPTROLLER WEITZMAN:
HOSPITAL CORPORATION STILL TEETERING ON THE BRINK

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,” Comptroller 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, Comptroller 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.”

The Comptroller’s review finds that since the last review four 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.

NHCC’s new Chief Executive Officer, former Deputy County Executive Arthur 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 County Legislature, and the Comptroller’s Independent Audit Advisory Committee. 

The full cash report may be read or downloaded below:

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NHCC Cash Letter