Union Criticizes Handling of Hospital’s Finances

Re-post from NJSpotlight | Written by Andrew Kitchenman

Hospital leader defends approach, while health commissioner is asked to appoint temporary manager of facility

A labor union representing workers at Meadowlands Hospital Medical Center is demanding that the state step up its fiscal oversight of the for-profit hospital after it eliminated more than 100 jobs.

The Health Professionals and Allied Employees and the New Jersey Appleseed Public Interest Law Center sent a letter to state Health Commissioner Mary E. O’Dowd on Friday reiterating their request for appointment of a temporary manager for the Secaucus hospital.

“The public’s health, welfare and safety is at issue, and it is the commissioner’s duty to act,” HPAE President Ann Twomey and New Jersey Appleseed Executive Director Renee Steinhagen wrote. “Now is the time to prevent a bad situation from getting worse.”

Meadowlands has been the subject of controversy over its finances. The union fears that the hospital will take profits out of the institution while cutting services and jobs. The union wants to ensure that everything possible is done to restore the hospital’s financial health and avoid closing its doors.

A Department of Health spokeswoman said officials are reviewing the letter and that they are actively monitoring the hospital to assure continued access to services and compliance with state regulatory requirements.

Meadowlands officials, for their part, denied that the hospital is financial vulnerable and defended their handling of hospital operations. In addition, its president said the staff reduction still left the hospital above industry norms and would not affect patients.

The union, which represents nurses, technicians and services workers, and the for-profit hospital’s management have been embroiled in a series of disputes in recent years. The union has pushed for legislation that would require for-profit hospitals to provide more public information about their finances.

Feeding the HPAE’s concerns is an August 2013 report – submitted to the state by hospital consultant Executive Resources that the union recently received as a result of an open-public-records request. The report said Meadowlands faces cash-flow challenges and has no formalized financial reviews or budgeting process.

In a separate report completed in March, the consultant projects that the hospital would need four years to compile 15 days of cash on hand.

Meadowlands agreed to hire the consultant as part of an agreement with the state aimed at addressing concerns about the the hospital’s finances.

In the letter, Twomey and Steinhagen asked what the state has done in the past year to bring the hospital into compliance with sound financial practices and make sure it produces overdue financial statements for 2012 and 2013.

They also asked whether the hospital’s owners and investors continued to take profits out of the hospital in 2013 and 2014, despite what they described as its “fragile financial condition,” and how the state plans to assure quality of care despite the 102 layoffs.

State spokeswoman Dawn Thomas said hospital officials have been informed that they are subject to fines for failure to submit audited financial statements. She also said that the state is aware of the hospital’s fiscal challenges and that the hospital’s new leadership is working to improve its financial condition.

Former state Department of Banking and Insurance Commissioner Thomas Considine became the hospital’s president and CEO on May 1. Hospital spokesman Benjamin Martin said Considine has completed a thorough evaluation of operations and began implementing a comprehensive business plan after presenting it to the hospital board of trustees at a meeting attended by state officials.

Martin also said the state has been closely reviewing the care the hospital provides. He added that neither Executive Resources nor the hospital have concluded that the hospital’s financial condition is fragile.


The pending layoffs were the result of implementing a “flexible staffing plan” and weren’t an indication of “a negative financial health status for the hospital,” he said in an emailed response to questions.

Considine added in a statement: “This job action was all about an effort to bring our workforce closer to industry norms. Patient care will not be impacted, as the hospital will remain well above the average number of employees per occupied bed. While the business case for the job action was compelling, it was nonetheless difficult on a human level.”

Martin also said the hospital has implemented budgeting and budget tracking measures as a result of the 2013 Executive Resources report and that the hospital’s audit of its 2012 financial statement will be done this summer, while work on the 2013 financial statement will begin after that.

HPAE Policy Director Jeanne Otersen said the state has been too slow to react to the hospital’s problems.

“From our perspective, our definition of monitoring and following something closely I think is something very different than what the department has been saying,” Otersen said. “This is not the time for watching, this is the time for taking real action.”

Otersen also questioned whether the hospital was truly above industry standards in its staffing levels, saying that the hospital has only provided the union with “broad figures” and it’s not clear whether the number reflects workers who actually provide care to patients.

“Whether or not there’s a new management team in place isn’t really the point,” Otersen said, adding that the state should make public the hospital’s current financial situation.

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