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Massena Memorial Hospital continues look at privatization

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MASSENA — Hospital officials have voted to seek expert advice on the possibility of turning from a municipal hospital to a private, not-for-profit hospital.

Tina Corcoran, senior director of public relations and planning for Massena Memorial Hospital, said the board of managers has a number of factors to consider and many parties to consult with before they can begin to consider privatizing the town-owned hospital as a way to save on rising retirement costs. A consultant would provide hospital officials with that information should they consider moving ahead with privatization.

Privatizing would remove employees from the state pension system.

“The board agreed to allow and direct administrative information gathering to evaluate the possible restructuring of the hospital for becoming a private, not-for-profit facility,” Ms. Corcoran said.

Ms. Corcoran said that in 2002 the hospital paid only $149,000 into the state pension plan compared to the more than $3.8 million they paid in 2012. This year, MMH will pay $4.8 million into its pension plan, and Ms. Corcoran said hospital officials are concerned that rising pension costs might threaten the future viability of the hospital.

“Those costs have escalated. We have to look at what we can do to sustain this hospital. We’re a major employer in this community,” Ms. Corcoran said.

According to Ms. Corcoran, privatization would have three significant effects on the hospital: it would affect MMH’s long-term bonding, it would allow MMH to collaborate with outside agencies, such as other, nonprofit area hospitals and it would remove MMH employees from the state’s pension system and instead provide them with a different type of retirement plan.

Jonnie J. Dorothy, senior director of human resources at MMH, said the opportunity to work with other hospitals could increase the efficiency of care, allowing MMH to work collaboratively with local hospitals and not duplicate specialized services offered at other nearby hospitals.

“We all have to be different enough to supplement each other. We all have something to provide,” Ms. Dorothy said.

Ms. Corcoran said their consultant would determine MMH’s options to provide retirement benefits for its employees, in place of the state pension plan, should the hospital privatize.

The possible change in retirement plans has left some employees concerned about the level of benefits they will receive upon retirement, should MMH’s board of managers elect to privatize the hospital, said Joseph Ward, a former nurse and president of MMH’s New York State Nurses Association union local.

Some employees are already beginning to look for jobs elsewhere due to the possible change, he said.

“The morale down there is really low. A lot of people took jobs there because of the benefits,” Mr. Ward said. “It used to be a good hospital, but lately, in the last few years, it’s lost a lot.”

Ms. Corcoran could not provide an estimated timetable for when privatization might take place, but expects it to be a lengthy process. Before going private, MMH officials will have to consult with the New York State Department of Health, the New York State Commission on Health Care Facilities, the Massena Town Council, state government officials, state retirement officials, its long-term bond counsel and its employees and medical staff.

Supervisor Joseph D. Gray pointed out the town council would have a say over whether to allow MMH to privatize and said his vote would be based on the information hospital officials bring before the board.

“I would have to wait and see what the research indicates. There’s no doubt the hospital has to do something, and I think the plan is to wait and see what their options are,” Mr. Gray said.

Ms. Corcoran said MMH Chief Executive Officer Charles F. Fahd II would keep employees informed as the hospital continues to gather data about possible privatization.

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