PUBLIC HEARING: TO DISCUSS SUNY DOWNSTATE HOSPITAL AND LONG ISLAND COLLEGE HOSPITAL IN REGARD TO THE SUSTAINABILITY PLAN REQUIRED BY THE 2013-2014 STATE BUDGET

SUNY Downstate Medical Center 20 21 ---oOo--- 22 23 24 25 1 SENATOR LAVALLE: Good morning, everyone. 2 This is a joint hearing of the 3 Higher Education Committee and the Senate Health 4 Committee. 5 We suspect that we should be able to get what 6 we need, in terms of information, with this one 7 hearing. 8 If not, we will conduct another hearing, or 9 some format, to bring individuals in to -- so that 10 we will have the information that we need. 11 Senator Hannon, would you like to -- 12 SENATOR HANNON: No, there are so many things 13 you could say, but I think the course of action that 14 has been set in motion by the budget, by 15 circumstances, leads to a very special type of 16 hearing today. 17 It's not often that you get a chance to 18 discuss a plan in public. And, obviously, there's 19 complications, but, look forward to hearing from, 20 not only the distinguished panel right here, but the 21 rest of the people on our distinguished list. 22 Thank you. 23 SENATOR LAVALLE: Senator Stavisky? 24 SENATOR STAVISKY: Let me just add that, this 25 hearing I think demonstrates the relationship 1 between the higher-education community and the 2 health-care community, and it's a relationship that 3 is extremely important, not just to downstate, but 4 to the future of the health-care system in the city, 5 and, eventually. 6 I believe, upstate as well. 7 So we thank everybody for coming, and we look 8 forward to hearing what everyone has to say. 9 SENATOR LAVALLE: Senator Rivera? 10 SENATOR RIVERA: I want to thank 11 Chairman LaValle and Chairman Hannon for bringing us 12 here today. It is -- and I want to thank all of our 13 guests. 14 It is, as we have said in the last couple of 15 years, and certainly through the budget process, 16 certainly many of my colleagues in the 17 Democratic Conference from Brooklyn have repeated 18 over and over again how crucial SUNY Downstate is as 19 a health-care provider to millions of New Yorkers, 20 and certainly in Brooklyn. 21 And, we want to do everything that we can, as 22 a state, to make sure this institution continues to 23 exist. 24 So, I am very glad that we're here to discuss 25 that today, and I'm looking forward to the 1 conversation that we will be having. 2 Thank you. 3 SENATOR LAVALLE: Before I introduce the 4 panel, one additional thing. 5 As we move forward, what we do at Brooklyn 6 could have implications for the other SUNY 7 hospitals, Upstate and Stony Brook, so we want to 8 keep that in mind as we move forward. 9 I am very pleased that we have on our panel, 10 the Chairman of the SUNY Board of Trustees, 11 H. Carl McCall; 12 Our Chancellor, Nancy Zimpher; 13 The associate vice chancellor for health 14 affairs, Lora Lefebvre; 15 And the president of SUNY Downstate Medical 16 Center, Dr. John Williams. 17 I don't know who wants to start. 18 Chancellor? 19 NANCY L. ZIMPHER: I will start. 20 Good morning, everybody . 21 And thank you, Chairperson LaValle, 22 Chairperson Hannon, Senator Stavisky, 23 Senator Rivera, and others who may join us, and, the 24 legislative staff, for the opportunity to testify 25 today. 1 It is our privilege to come before you to 2 discuss our sustainability plan for SUNY Downstate 3 Medical Center. 4 First, however, it is important to step back 5 and ask how it is that SUNY became involved with the 6 training of health-care professionals and operating 7 clinical-training sites, our hospitals, in the first 8 place. 9 As we know, SUNY was created out of sheer 10 need and demand after World War II, but also in 11 response to racial and ethnic admission inequities 12 from the well-developed private college system in 13 New York State at the time. 14 SUNY acquired both Upstate and Downstate 15 Medical Schools in the early infancy of SUNY in the 16 1950s, from private schools. 17 Our schools have long histories of providing 18 access to those that might not otherwise have access 19 to the dream of higher education. 20 And so today's SUNY's impact on health care 21 extends, literally, across the state. 22 Our hospitals see more than 260,000 emergency 23 room visits a year, and in excess of 80 percent of 24 our medical students take what they learn and 25 continue to care for New York's patients as they 1 stay here to practice. 2 Downstate Medical is the only academic 3 medical center serving the borough's 2.5 million 4 people. 5 1 in 3 physicians practicing in Brooklyn, and 6 1 in 9 in New York City, was trained at Downstate. 7 It is imperative that we protect this vital 8 resource, not only for Brooklyn, but also for all of 9 New York State. 10 In fact, we are taking a system-wide look at 11 how each of our medical schools and hospitals are 12 projected to perform. We are asking for assistance 13 where we think it is justified, and making other 14 choices if we need to, because we must remain 15 focused on our core mission to support public 16 education for the state. 17 We know that we cannot address the issues at 18 Downstate in a vacuum. 19 That, what comes of this process must be at 20 the forefront of how health care transforms itself 21 in Brooklyn, and with big changes coming down the 22 road, like the Affordable Care Act, across the 23 nation, not only how health care is delivered in the 24 future, but how SUNY's ability to continue to 25 prepare medical professionals in clinical settings 1 where underserved populations seek care, but also 2 how SUNY's ability to do so impacts all of SUNY and 3 our capacity to educate New York. 4 And so to accomplish our goals at Downstate, 5 and to lead the institution through the necessary 6 restructuring, SUNY is fortunate to have a true 7 leader in the health-care field, in 8 Dr. John Williams as the president who is 9 overseeing this crisis. 10 I have every confidence in the ability of 11 Dr. Williams and his team to provide guidance, to 12 make difficult decisions, and stabilize the 13 operations at Downstate. 14 And as you know, over the past several 15 months, Dr. Williams has led a team of senior 16 administration at Downstate, in collaboration with 17 the team from SUNY System Administration led by 18 associate vice chancellor for health affairs, 19 Lora Lefebvre, in developing this sustainability 20 plan that was submitted to the Governor and the 21 Legislature on May 31, 2013. 22 I might add, since you mentioned Upstate, 23 that President David Smith is in the gallery as well 24 for, what he says, is moral support. 25 So, we thank you for that. 1 Creating this plan was no easy task, and SUNY 2 was very fortunate to have its board Chair, 3 H. Carl McCall, to take the kind of leadership and 4 the consultative process. And because of his 5 visionary work, this is how we found ourselves at 6 this important sustainability plan. 7 And, so, I would like to turn the discussion 8 over to Chairman McCall to say a few words before we 9 get into the plan itself. 10 Chairman McCall. 11 H. CARL McCALL: Thank you, 12 Chancellor Zimpher. 13 Good morning, Senators. 14 I want to thank you for this opportunity that 15 you have given us to testify today on the matter of 16 Downstate Medical Center. 17 Leading up to this point, we've been 18 concerned for some time with the financial status 19 and sustainability of Downstate Medical Center. 20 Our concerns were confirmed when the 21 state comptroller issued a report on January 17, 22 2013, in which he stated that the continued 23 losses -- financial losses at Downstate and at the 24 Long Island College Hospital were going to lead to a 25 situation of insolvency for Downstate. 1 Of course, I pay a lot of attention to audits 2 and reports from the state comptroller; and, so, we 3 knew that we did have a serious problem, and we have 4 attempted to address those issues in multiple ways. 5 The SUNY board has taken many actions to 6 address the crisis, including: 7 We have authorized a $75 million loan to help 8 the cash deficit for a year. SUNY Downstate has 9 been operating on the loan that came from the 10 SUNY Board. 11 We've requested State participation in 12 funding in two different ways: 13 An immediate $35 million cash infusion, and 14 submission of an application through the 15 Vital Access Provider Medicaid program, for 16 $64 million; 17 We submitted $150 million ask in the 18 2013-2014 budget request. 19 And, we have undertaken a wholesale 20 replacement of the management team at Downstate, 21 recruiting as CEO -- a CEO and a team familiar with 22 crisis management. 23 In addition, there has been a rigorous 24 consultative process with stakeholders, 25 constituents, legislative leaders, and the Executive 1 branch. 2 We have met on a consistent basis with the 3 Brooklyn delegation and the Executive leadership to 4 ensure that the dialogue has continued throughout 5 the development of the plan. 6 The budget language calling for the 7 sustainability plan reinforced SUNY's desire to 8 adequately engage interested parties throughout the 9 development process. 10 In meeting these goals, SUNY system and 11 Downstate developed a website to share information 12 and accept feedback. 13 We hosted two formal briefings for the 14 Brooklyn State Senate and the Assembly delegation. 15 We met often with individual legislators to 16 address their concerns. 17 We sent an open letter to the community, 18 explaining the process and inviting them to engage. 19 We held a town-hall meeting in Brooklyn, 20 where the public and legislators submitted 21 testimony. 22 We met with the SUNY Downstate Council to 23 brief them on progress in the development of the 24 plan. 25 And, we met with the following unions: PEF, 1 NYSUT, UUP, CSEA, SEIU 1199. 2 We received numerous comments from 3 stakeholders via e-mail and websites covering myriad 4 topics and points of view. 5 These are some of the things that we heard: 6 We heard that there's a need to keep LICH as 7 a necessary and vital role in Brooklyn's health-care 8 needs. 9 We heard that the need for labor-community 10 stakeholders to have a seat at the table. 11 The desire to get rid of or change the 12 current billing system and its financial 13 difficulties. 14 As an academic medical center, all faculty 15 should be teaching. The school and medical center 16 should not operate as two entities. 17 We heard that we should review human-resource 18 records to get the most out of employees. 19 We heard that there's a need to create 20 primary-care offerings, and that the potential harm 21 of not knowing the future of Downstate LICH and what 22 could that could do to enrollment. Some future 23 students could choose not to apply, or withdraw 24 applications, because of the uncertainty. 25 We heard about the need for money to hire 1 more primary-care physicians, to see patients, and 2 to refer to subspecialties those who refer -- needed 3 to be referred to other clinical services. 4 Acquisition, that the closing of LICH is a 5 land-sale opportunity for valuable real estate. 6 And we heard that the characterization of 7 United Hospital of Brooklyn as being worse than 8 Long Island College Hospital. 9 All of these concerns we heard; and, 10 therefore, this helped us to develop the plan. 11 And this plan is intended to serve as a 12 strong solution, to ensure the people of Brooklyn 13 that they will have -- continue to have the medical 14 care they deserve, while preserving Downstate's 15 ability to provide quality medical education. 16 So without further delay, I would like to ask 17 that Dr. Williams and Associate Vice 18 Chancellor Lefebvre walk the hearing panel through 19 the overarching structure of the plan; this plan 20 that we have developed, with consultation. 21 And then we will certainly be willing, after 22 we hear from them, to answer any questions that you 23 might have. 24 Thank you. 25 SENATOR LAVALLE: Dr. Williams, before you 1 begin, we're joined by Senator Golden, who is not a 2 member of the Committee, but, as everyone in this 3 room knows, is -- has been a most interested member 4 of our body interested in this issue. 5 Senator. 6 SENATOR GOLDEN: Thank you. 7 SENATOR LAVALLE: Dr. Williams. 8 DR. JOHN WILLIAMS: Thank you, Senator. 9 Welcome to Senator Golden, a good friend of 10 SUNY Downstate. 11 SENATOR GOLDEN: Thank you. 12 DR. JOHN WILLIAMS: First of all, let me 13 start off by saying that I considered it an honor 14 and a privilege to be at Downstate Medical Center. 15 Intellectually, I always knew about 16 Downstate Medical Center, but now, emotionally, I 17 understand Downstate Medical Center. 18 We keep hearing the term "catastrophic," for 19 Brooklyn, the city, and the state. 20 And what does that really mean? 21 Well, first of all, it's important to 22 understand that SUNY Downstate is five schools, not 23 just a medical school. 24 (Slide-show presentation begins.) 25 DR. JOHN WILLIAMS: We have well over a 1 thousand students. 2 We have a medical school, nursing school, 3 public-health school, graduate school, and a college 4 of health-related professions that trains physical 5 therapists, nurse anesthetists, and all sorts of 6 health professionals. 7 Simply put, SUNY Downstate educates more 8 minority health-care professionals than almost 9 anywhere else. 10 In terms of the medical school, we are right 11 behind the historically black colleges and 12 universities. 13 Thank you. 14 And what is so important right now, in 15 New York City, and in Brooklyn in particular, is 16 that we have an aging and a very chronically ill 17 population, and it's an underserved population in 18 Brooklyn. 19 As I said, we educate over a thousand 20 students, and we train well over a thousand interns, 21 residents, and fellows as well. 22 And the good news there, is almost all of 23 them stay in the state of New York. 24 And as we know, right now, New York is 25 experiencing a shortage of physicians and nurses, 1 and it's critically important for us, along with 2 Stony Brook and Upstate, to continue to educate 3 physicians and nurses for the state of New York. 4 In this current environment, it's even more 5 important. 6 With the pressing financial difficulties of 7 SUNY Downstate clinical enterprise at UHB, we've 8 reached a point that could imperil the future 9 viability of Downstate's academic enterprise, and 10 SUNY's prescribed mission to provide the people of 11 New York educational services to the highest 12 quality. 13 This is critical because of, as I said, who 14 we educate and who we train. 15 SUNY Downstate is the American dream 16 realized. 17 The 40 percent of the first-year 18 medical-school class at SUNY Downstate, English is 19 not the spoken language at home. And, we have over 20 70 languages that are spoken in our hospital today. 21 And, again, these individuals go back to 22 those neighborhoods that they came from and take 23 care of people who look just like them. 24 The current state can no longer be 25 maintained. The challenges are immense. 1 The complexity of the state system is 2 overwhelming, and many of the solutions that can be 3 utilized to protect the enterprise from insolvency 4 and achieve a successful rescue of the enterprise, 5 such as bankruptcy, are not options available for 6 consideration, as UHB continues to be a state 7 enterprise. 8 Again, we have a very high level of health 9 disparities in the communities we serve, high rates 10 of complex chronic disease, and our patients are, 11 largely, publicly insured. 12 Now, the only thing I want to point out in 13 this next slide, is that Brooklyn health care has 14 been studied to death, and the conclusions have been 15 the same for the past couple of decades. 16 I have read those stories. 17 And, we really have to create an integrated 18 system of care that is aligned with community needs 19 as a means of improving individual health and 20 community health, while reducing unnecessary 21 health-care spending. 22 And that came from the MRT report in 2011. 23 And I will turn it over to Lora Lefebvre. 24 LORA LEFEBVRE: Thank you very much, 25 Dr. Williams. 1 And thank you very much, Senators, for this 2 opportunity. 3 So, the 2013-14 budget asked us, SUNY, the 4 Chancellor, to develop a sustainability plan to 5 address all of these things that we've just been 6 talking about. 7 There were many scenarios. 8 As we engaged in this activity, as the Chair 9 points out, we've been talking with many stakeholder 10 groups, but we also developed a core team of people 11 that could look at what the options were. 12 So, there were many scenarios discussed. 13 But, the factors of time, or lack thereof, 14 lack of time, the financial and cash position that 15 Downstate finds itself in, and our very public 16 nature, really compelled us to look at four, kind 17 of, core options. 18 (Slide show continues.) 19 LORA LEFEBVRE: So, the first option was to 20 look at UHB as a very elegantly efficient and 21 effective health-care institution, with the benefit 22 of the Part Q legislation. 23 Part Q was the piece of the budget that 24 allowed for the sustainability plan, but it also 25 allowed us to have some flexibility with regard to 1 contracting and procurement, for one year, attached 2 to the sustainability plan. 3 So, when we looked at how to become more 4 elegantly efficient, we certainly considered the 5 benefits of using that piece of the legislation. 6 And, of course, when we looked at that, we 7 knew we were going to need State support. 8 The second option was a little bit more 9 outside of the box. 10 And we said: So, what happens if SUNY just 11 exits the hospital operation altogether? We create 12 a voluntary not-for-profit organization and, 13 basically, allow for that entity, to run the 14 hospital operations. Not the medical school 15 operations; the hospital operations. 16 Another scenario that we looked at was to, 17 basically, find another, bigger partner that had 18 breadth and capacity to, basically, take us over -- 19 merge, take us over. 20 So we actually engaged in some very serious 21 conversations with a big provider in Brooklyn, to 22 see whether or not there was the capacity or the 23 willingness to get into that kind of discussion. 24 And we saw a lot of synergies there, but it 25 really, for a lot of different reasons, was not 1 something that looked really possible, at least at 2 this point in time. 3 The third option that we -- or, excuse me, 4 the last option that we looked at, which is the 5 third one on the slide, was kind of a combination of 6 two of the options, which was, to restructure 7 ourselves, using Part Q legislation, the flexibility 8 legislation, but also creating a Brooklyn-based 9 public-benefit corporation to assist us with, as 10 Dr. Williams points out, the -- addressing the 11 larger Brooklyn context of health-care delivery, and 12 where we fit in it. 13 And, you know, our interest certainly starts 14 with our academic interests, and our interest in 15 serving the medical school, and all of the allied 16 professions that we trust -- that we offer. 17 And so we felt, like, perhaps a 18 public-benefit corporation could hold all of that, 19 and also allow for, as Skip -- as Skip points out, 20 the development of an integrated delivery system. 21 So each one of these options had pluses and 22 minuses. 23 We were very concerned, as I mentioned, with 24 making sure that we controlled the academic 25 enterprise, and that includes medical school -- 1 medical students, but also residency placements. 2 There were some very common elements in each 3 one of these scenarios that we had to be mindful of. 4 We knew we needed to restructure the 5 University Hospital at Brooklyn; 6 We knew we had to protect our academic 7 programs; 8 We knew time was not our friend; 9 We knew we had to develop it in the context 10 of Brooklyn health delivery as a whole; 11 And we also knew that we were going to need 12 your support to do it. 13 So, Albert Einstein said, we had to apply new 14 ways of thinking to solve the problems of the past. 15 And we did. 16 So, what is our plan? 17 We are proposing two distinct actionable 18 components for our plan. 19 The first, is to continue to aggressively 20 pursue reshaping UHB into a model of effective and 21 efficient health care that serves our academic 22 mission. 23 This will not be easy, nor without 24 significant reductions. 25 It will require relearning how we do things, 1 all the way from patient care and documentation by 2 our physicians, to how we purchase sutures. 3 A whole work-process relearning process. 4 This is hard work, and certainly will require 5 a lot of strong partnership from the staff at 6 Downstate, and certainly support from SUNY Central. 7 The second and critical piece of the 8 proposal, or plan, is a creation of an organization, 9 and we would call it the "Brooklyn Health 10 Improvement Corporation." 11 And what we see this corporation being able 12 to do, is take UHB out of its somewhat limited role 13 in the borough and elevating it to become Brooklyn's 14 homegrown medical school of choice, and provide a 15 backbone for the coordination of care and services 16 so needed for Brooklyn providers to achieve a good, 17 stable health-care delivery system. 18 So, how do we fit into that? 19 Well, we can support Brooklyn health-care 20 providers, and this organization, by producing, as 21 Dr. Williams points out, all manner of health-care 22 professionals, including desperately needed 23 primary-care physicians and allied health 24 professionals. 25 We would also provide all Brooklyn hospitals 1 and clinics with a diverse and quality workforce of 2 medical students and residents to assist with 3 delivery of health care. 4 These partnerships will also allow for UHB 5 and others to begin the critical work of network 6 formation that will allow Brooklyn to respond to the 7 potential of the Affordable Care Act, and also 8 changing reimbursement methodologies that come with 9 it. 10 Okay, so we look -- sorry. 11 So, we see a phased approach for this 12 sustainability plan. 13 We see that it needs to be phased, and that, 14 first and foremost, we need to become a lean 15 organization that offers great health care. 16 And to do this, it's going to take time, and 17 it's also going to take continued State support. 18 At the same time, we recommend that the State 19 pass legislation to establish the Brooklyn Health 20 Improvement Public-Benefit Corporation, and work to 21 begin building partnerships. 22 And you can see the three phases of the plan 23 there. 24 So, why create a state public-benefit 25 corporation to do this? 1 History has shown, at least from my 2 perspective in Brooklyn, that this integration and 3 this working together that is so desperately needed 4 does not happen naturally, particularly in Brooklyn. 5 And, the consequences of natural selection 6 that might be applied in this situation can leave 7 really significant holes in health-care delivery in 8 really critical parts of Brooklyn. 9 We believe that the 10 public-benefit-corporation structure allows for a 11 governance structure that can embody a 12 public-private partnership, because we're not just 13 talking about ourselves. We're talking about many 14 standalone health-care providers in Brooklyn that 15 are also struggling mightily. 16 We see that a public-benefit corporation 17 could serve as a conduit for an allocation authority 18 for limited State restructuring support. 19 And we also see that it would allow for an 20 organizing principal for our academic planning and 21 our placement. 22 So, there are many, many types of 23 public-benefit corporations, as you know. 24 I'm not going lecture about that. 25 So some "run" things, like the MTA; 1 Some are created just to issue debt, like 2 DASNY; 3 And then there are other public-benefit 4 corporations that are really created to embody 5 public and private, you know, partnerships. 6 And I see this as -- what we're suggesting, 7 as being the latter. 8 The one thing that I want to note, is that 9 this public-benefit corporation that we're 10 suggesting will not run hospitals, it will not 11 operate hospitals, but, it could be all of these 12 things that we have listed here: 13 A catalyst for health-improvement 14 initiatives; 15 A vehicle for public input; 16 You know, a sponsor of initiatives that 17 address primary care; 18 A forum for providers to track changes; 19 Perhaps a vehicle for capital formation; 20 And, certainly, a vehicle for change. 21 This is a little bit more of a graphic on how 22 we see the public-benefit corporation fitting into a 23 network. 24 I won't go into great detail about it, the 25 visual speaks for itself. 1 And -- but it -- also, I would highlight, 2 that the benefit of a network isn't just necessarily 3 working together. There are some very real 4 financial potentialities associated with working 5 together. 6 We know that joint managed-care contracting 7 can be an amazing, powerful tool for struggling 8 institutions. And that certainly is one of the 9 potentials here. 10 The other potential, as we see it, is 11 supporting in a much more meaningful way, the 12 benefits of our academic mission for our medical 13 school and our GME programs. 14 So what does it take to support this plan? 15 Significant support is required. 16 We've laid this out on the chart here. 17 We are committed to making UHB a more 18 efficient operation. 19 But while -- and these -- these estimates 20 that we've put up there are points in time. 21 And we know that Dr. Williams and his team, 22 and certainly SUNY Central, will continue to press 23 to find more savings. 24 Network development will assist in those 25 operational gaps. 1 I will also note, on the "Long Island College 2 Hospital" line, we have had some excellent responses 3 to a request for an information process that we have 4 started with Long Island College Hospital. 5 And we, I think, received about 6 seven responses to an RFI that we issued, and they 7 were due back on the 24th. 8 So we're reviewing them now, they look 9 responsive, and we're really expectant that we will 10 have a new operator, or operators, for LICH at some 11 point in the future. 12 Regardless of all of that, SUNY has made a 13 determination that the expenses for LICH are not 14 something that we can continue to maintain, and 15 these numbers represent what it takes for us to exit 16 the operation. 17 So this is a summary -- it's a little busy, 18 but this is a summary chart of, both, our needs, 19 UHB's needs, that we feel we need to have the plan 20 supported, but also estimates on what it might take 21 to support a meaningful health-improvement 22 corporation. 23 Notable among those network needs are things, 24 like: Investment in infrastructure; 25 Linkages to electronic medical records; 1 Change management clinical staff for training 2 folks to do things differently; 3 And, also, development of quality dashboards. 4 And while it's not -- it is a pretty 5 significant investment, I think that there are -- 6 there are a number of demonstrated networks, that 7 when they form the backbone with their electronic 8 medical records, around quality, and around clinical 9 outcomes, the success has been demonstrated. 10 So as we -- as the Chancellor pointed out, we 11 submitted our plan on 5/31, and we have continued 12 our engagement and our dialogue with all of you, and 13 certainly with the Executive and all stakeholders. 14 And we will continue to do so. 15 And, so, that concludes the overview of the 16 plan. 17 (End of slide-show presentation.) 18 NANCY L. ZIMPHER: Questions? 19 SENATOR LAVALLE: Let me say, we've been 20 joined by Senator Montgomery, who's part of the 21 Brooklyn; and, Senator Parker, to the right. 22 Both senators from Brooklyn, as you all know. 23 One of the things during the budget, 24 Senator Hannon talked about the budget, and we 25 talked about the legislation, and we were talking 1 about the problem, several numbers were being used 2 as to: 3 What is the bleeding of Downstate? 4 What is the bleeding at LICH? 5 What is the bleeding together? 6 Do we have that number? 7 DR. JOHN WILLIAMS: Yeah, the number right 8 now is approximately $11 million a month. 9 SENATOR LAVALLE: 11 million a month. 10 Do you have a breakdown as to -- 11 DR. JOHN WILLIAMS: Currently -- 12 (Discussion among panelists.) 13 DR. JOHN WILLIAMS: Yeah, I know. It's not 14 lighting up. 15 LORA LEFEBVRE: Here, use mine. 16 DR. JOHN WILLIAMS: Right now, it's about 17 4.5 to 5 million a month at LICH, and the rest being 18 at UHB. 19 And the UHB number is continuing to come 20 down. 21 And as I promised the Chairman and the 22 Chancellor, that it would take about 18 to 24 months 23 to really see significant savings, but we are 24 collecting, we are billing, and our charges are 25 getting in. 1 SENATOR LAVALLE: I remember, Doctor, you 2 testifying at our budget hearing back in early 3 February, that you had implemented those procedures 4 that had not been implemented before. 5 So, okay, so it's 11 million a month. 6 And, I want to just talk about LICH a bit. 7 The planning stage leading up to LICH was, 8 how extensive? 9 How extensive was the planning period to the 10 acquisition of LICH? 11 NANCY L. ZIMPHER: At least, Senator, 12 two years, but, I believe it predates my tenure in 13 '09, so it probably has spanned almost three years. 14 SENATOR LAVALLE: Okay. 15 And do we have recollection, anyone, how that 16 came to the SUNY table; who brought that? 17 Was it the president of the hospital at the 18 time? 19 NANCY L. ZIMPHER: It was. 20 And Chairman McCall, we were both -- you were 21 on the board, and I was in this role, but it came 22 through the pres- -- then-president of 23 Downstate Medical. 24 SENATOR LAVALLE: And that was Dr. LaRosa? 25 NANCY L. ZIMPHER: Dr. LaRosa. 1 H. CARL McCALL: Well, I would like to add, 2 also, my recollection of it, was that it was really 3 very strongly supported by the governor at that 4 time, Governor Paterson, who supported it, and was 5 prepared to pay for it. 6 SENATOR LAVALLE: I didn't hear the last? 7 H. CARL McCALL: Governor Paterson supported 8 it, and indicated that he would pay for it. 9 SENATOR LAVALLE: He would pay for it. 10 And the acquisition cost was, what, that he 11 was going to pay for it? 12 How much? 13 NANCY L. ZIMPHER: I can't recall the exact 14 figure. 15 LORA LEFEBVRE: Well, I -- the -- the -- 16 there was a HEAL grant of about $40 million that was 17 granted to Downstate, to pay for part of it. 18 There was also another $22 million HEAL grant 19 that was made to Continuum, the seller, to address 20 medical-malpractice liability. 21 So, the total was significant. 22 SENATOR LAVALLE: 40 million? 23 LORA LEFEBVRE: Yep. 24 SENATOR LAVALLE: So... 25 Okay. 1 Dr. Williams, I was very touched by your 2 comment, and I made a note here, that the Brooklyn, 3 meaning "Downstate," story goes for a couple of 4 decades. 5 So, things were happening there for a couple 6 of decades? 7 DR. JOHN WILLIAMS: Correct. 8 SENATOR LAVALLE: That were telling us that 9 we were losing money there? 10 DR. JOHN WILLIAMS: Yeah, we were 11 beginning -- I would say, in the last decade, we 12 were beginning to see losses. 13 Not significant losses at the time, but as 14 the Chancellor has said, it was like the perfect 15 storm. 16 That, the economy hit rock bottom; Medicaid 17 and Medicare were cut significantly; pension costs 18 went up significantly; and, so, it was the perfect 19 storm. 20 The fact that there was no money for 21 infrastructure over a number of years at Downstate 22 also contributed. 23 When I got there, totally outmoded systems, 24 systems that did not work. 25 And we, essentially, if you look at the 1 revenue cycle, we had to completely rebuild the 2 revenue cycle. 3 It did not exist; and, so, we were unable to 4 actually collect money that we billed for. 5 SENATOR LAVALLE: So we now have -- from top 6 to bottom, we now have procedures and standards in 7 place that will ensure that the hemorrhaging you're 8 talking about, people paying bills, and -- 9 DR. JOHN WILLIAMS: Those processes are being 10 implemented now. In my 10 months, I think we 11 have -- the team has done a remarkable job so far. 12 But, yes, there will be procedures being 13 placed, there will be processes, and the right 14 people will be doing the work. 15 SENATOR LAVALLE: You've seen -- can you 16 quantify for us, the savings we're talking about? 17 11 million a month. 18 So, when you got there, what was the 19 bleeding? 20 DR. JOHN WILLIAMS: The bleeding was about 21 13 million a month. 22 SENATOR LAVALLE: Okay. 23 DR. JOHN WILLIAMS: And we have had some 24 projected improvements. 25 We know we've made some significant savings, 1 40 to 60 million dollars. And, we are projected -- 2 we have projections for '14, '15, '16, all the way 3 out to '17, where there will be additional savings. 4 SENATOR LAVALLE: I have that LICH was losing 5 money prior to -- so, when we took on LICH, it was 6 not -- it was losing money, and it was losing money 7 for a significant period of time. 8 DR. JOHN WILLIAMS: Correct. 9 SENATOR LAVALLE: So we acquired -- we 10 acquired an institution that was losing money for 11 more than a decade, decade and a half. 12 Is that -- 13 DR. JOHN WILLIAMS: Correct. 14 SENATOR LAVALLE: Is that -- correct. 15 And none of us -- and, the planning period; 16 we have no recollection of what the planning period 17 was, to say, we're acquiring something that is 18 losing money for 17 years. 19 And, do we know what that amount was when we 20 made that acquisition? 21 NANCY L. ZIMPHER: Senator, I think that we 22 would best be served to give you a summary of how 23 the LICH deal came about, the reports of the 24 consultants. 25 There were a number of strategies that were 1 expected to be put in place. 2 There was the notion that patients would 3 actually, easily, travel from University Hospital to 4 LICH, that really didn't materialize. 5 That there would be a service zone around the 6 LICH neighborhood, that would be highly advertised 7 and promoted, and, that people would not cross the 8 river to Manhattan. They would stay in the Brooklyn 9 communities. 10 So a number of the assumptions around which 11 the acquisition were based did not really come to 12 fruition. 13 But I think what would be most helpful, 14 probably, is to give put a document, to follow up on 15 your inquiry, about exactly what the intentions of 16 that consultation were. 17 As Lora can probably say, from the 18 Department of Health, there was broad consultation. 19 We recall that the Executive was involved as 20 well, as Chairman McCall has said. 21 But the assumptions made about how to recover 22 LICH into a sustainable operation simply did not 23 materialize. 24 And that's why, as soon as we began to 25 analyze what didn't materialize, we shifted our 1 plan. 2 But we could certainly document the steps 3 that were the taken over at least a three-year 4 period. 5 H. CARL McCALL: I just would like to add, 6 that the audit from the Comptroller's Office also, 7 that I mentioned before, highlighted the fact that 8 many of the assumptions that were put in place, in 9 terms of the acquisition, simply did not add up, and 10 that those assumptions were not very sound. 11 The report details that, and we can make that 12 available to you. 13 SENATOR LAVALLE: Yes, so, the Committee will 14 get that? 15 NANCY L. ZIMPHER: Absolutely. 16 Thank you, Senator. 17 SENATOR LAVALLE: Okay, I think 18 Chairman McCall talked about a $75 million loan. 19 I just want to kind of jump a little bit. 20 H. CARL McCALL: Yes. 21 So one of the actions taken by the board, 22 when we realized that we were facing this serious 23 financial difficulty at Downstate and LICH, the 24 board, upon the Chancellor's recommendation, 25 provided a loan of $75 million. 1 That money came from our other campuses. We 2 went into the reserves; money put aside for critical 3 programs for our other 64 campuses. 4 But because we are a system, and we recognize 5 that we all have to help other units that might not 6 be doing as well, we extracted from our other 7 campuses some $75 million, and made that available 8 as a loan, and that has provided the operating 9 expenses for Downstate and LICH over the last year. 10 SENATOR LAVALLE: The word "loan" means that 11 it's going to be repaid? 12 H. CARL McCALL: That is certainly our hope. 13 SENATOR LAVALLE: If I were president of a 14 campus, I couldn't live on a hope. 15 I would -- I mean -- 16 H. CARL McCALL: Senator, you're right. And 17 that is one of the reasons why it is so important 18 for us to have a sustainability plan that makes 19 sense, and to have support from the State, because 20 all of our presidents are very concerned about the 21 fact, that if these losses continue at Downstate and 22 at LICH, that the only way we can pay for it, 23 without support from the State, is to continue to 24 extract money from our other campuses. 25 And we can't do that. 1 We can't say to parents, who are struggling 2 to pay tuition for their students, that we're going 3 to take that money and use it to sustain an 4 operation in Brooklyn that's not functioning. 5 SENATOR LAVALLE: So the -- is the 75 million 6 from capital reserves, or that's from operating, 7 that they -- revenue -- 8 NANCY L. ZIMPHER: Operating. 9 SENATOR LAVALLE: Operating? 10 H. CARL McCALL: Uh-huh. 11 SENATOR LAVALLE: Okay. 12 Do we have -- let's go back to hope, because 13 I -- 14 [Laughter.] 15 SENATOR LAVALLE: -- we all, in our hearts, 16 have hope. 17 So, if I'm president of Campus X, when might 18 I see what was taken from me, back? 19 H. CARL McCALL: Senator, all we can say is, 20 we will have to hope to keep hope alive. 21 [Laughter.] 22 SENATOR LAVALLE: Okay. 23 Now, we're still losing money. 24 We -- do we have to go back and do another 25 round from the campuses' contribution? 1 NANCY L. ZIMPHER: Senator, as you might 2 imagine, there is a lot of concern across our 3 campuses, just the very conversation we are having. 4 And we have made a pledge to our campuses 5 that that will not be our intent. 6 We've been asked to present a sustainability 7 plan. 8 That is exactly what we have done, with a 9 high level of consultation. 10 We have made no bones about it, we understand 11 the State's investment will be necessary. We've 12 said this repeatedly. 13 We couldn't come up with an option or an 14 alternative that didn't suggest the State's role in 15 this partnership. 16 And so we have to say to our campuses: This 17 plan is based on the assumption that the downsizing 18 and the public-benefit corporation and the State's 19 role are our sustainability plan. 20 SENATOR LAVALLE: Okay, so, we have 21 75 million from the campuses. 22 We passed legislation. 23 How much was in that legislation for -- 24 NANCY L. ZIMPHER: Lora's going to sort of 25 break it down. 1 LORA LEFEBVRE: Yeah. 2 So in the 2013-14 budget, we've got aid for 3 all SUNY hospitals. We've got a baseline support -- 4 SENATOR LAVALLE: No, no, no. 5 LORA LEFEBVRE: I'm sorry? 6 SENATOR LAVALLE: In the legislation that we 7 passed -- 8 LORA LEFEBVRE: Oh, I'm sorry. 9 SENATOR LAVALLE: -- well, we're going to get 10 to -- 11 LORA LEFEBVRE: Nothing. 12 SENATOR LAVALLE: -- what's in -- 13 LORA LEFEBVRE: There wasn't any support 14 attached to the sustainability plan. 15 SENATOR LAVALLE: There was no "loan" 16 language that -- for 100 million? 17 UNKNOWN MALE PANELIST: No. 18 LORA LEFEBVRE: No, no. 19 At one point in time, during the discussion, 20 there was the consideration of a loan. But that did 21 not make it through the final bill in the process. 22 SENATOR HANNON: Let me just ask one other 23 question, let me interrupt this line. 24 In your response to the audit report of the 25 comptroller, I found it interesting, and I wondered 1 if this continued, where the amount of State support 2 had decreased by about 57 percent, from 07-08 to the 3 11-12 budget. And that would be a drop of about 4 17.6 million. 5 And in addition, there had been other actions 6 taken in 07-08, that increased the cost to Downstate 7 by 92.2 million. 8 Now, those -- have any of those numbers -- 9 and that's a net-change effect to Downstate, of 10 $115 million on an annual basis. 11 Have any of those costs' impositions on 12 Downstate been changed? 13 LORA LEFEBVRE: No, not that I'm aware. 14 SENATOR HANNON: So it still remains? 15 LORA LEFEBVRE: Yep. 16 SENATOR HANNON: Thank you. 17 Senator LaValle. 18 SENATOR LAVALLE: Let me, uhm -- you've put 19 together this sustainability plan. 20 And, upon one of your charts here, you have 21 UHB -- 22 This is the chart I'm looking at. 23 LORA LEFEBVRE: Yes, yes. Thank you. 24 SENATOR LAVALLE: -- you have "UHB and other 25 hospitals." 1 What are the "other hospitals" that we're -- 2 DR. JOHN WILLIAMS: Well, we are in 3 discussions with several other hospitals in Brooklyn 4 right now. 5 Three, that are very interested in forming 6 some sort of network like this. 7 And, we're going to be continuing to have 8 conversations with other hospitals in Brooklyn as 9 well. 10 The whole idea here, is that, if you look at 11 other networks, if you look at the Manhattan 12 hospitals, they form networks, where they have 13 several hospitals. 14 We're all standalone hospitals. 15 As a result, when we go to negotiate a price, 16 they look at us as a onesie, or a twosie, as opposed 17 to eight or nine hospitals, that, if you don't give 18 them the price that they're asking for, they'll go 19 to somebody else. 20 And, so, we see strength in numbers there, 21 but we realize that this network has to be put 22 together. 23 The hospitals will continue to have their own 24 separate boards, and so forth, but, when it goes to 25 managed-care companies, when it goes to purchasing, 1 contracting, if we do all that together, and create 2 a primary-care network on top of that, because the 3 Affordable Care Act is going to demand that, we 4 believe that there will be significant strength. 5 SENATOR LAVALLE: What are the hospitals? 6 DR. JOHN WILLIAMS: I'm sorry? 7 SENATOR LAVALLE: What other hospitals? 8 DR. JOHN WILLIAMS: Brooklyn Hospital, so 9 far, Lutheran Hospital, and Kings Brook Jewish, are 10 the ones that have been affirmative so far. 11 Others are thinking. 12 SENATOR LAVALLE: Okay. 13 And what is the process going to be to put 14 those hospitals into a network? 15 DR. JOHN WILLIAMS: That's next steps. 16 That's part of our -- once we get some transition 17 money, to stabilize, then we'll begin to -- begin 18 that process. 19 SENATOR LAVALLE: Do we know the viability of 20 those hospitals? 21 DR. JOHN WILLIAMS: Yes. 22 Brooklyn is positive, cash-wise; 23 Lutheran is positive; 24 Kings Brook is positive. 25 SENATOR HANNON: What's the "transition 1 money"? 2 SENATOR LAVALLE: Go ahead. 3 SENATOR HANNON: What's the "transition 4 money"? 5 DR. JOHN WILLIAMS: The "transition money" 6 would be to continue the efforts that we have at UHB 7 right now, in order to completely restructure, to 8 make sure that we are doing things effectively and 9 efficiently, and we're actually bringing in money 10 instead of losing money. 11 The one caveat I would like to make, and this 12 is critical, is that, if you look at the population 13 in Brooklyn, we have a very high uninsured rate, 14 and, we have a very high rate of public insurance. 15 As a safety-net hospital, we're lucky to 16 break even. 17 Our mission is to take care of those who 18 cannot afford to pay. 19 And as part of that mission, we were getting 20 a significant amount of State support. 21 And as you pointed out, Senator Hannon, we no 22 longer get that support. 23 If we were at that level, we wouldn't be in 24 this situation. 25 SENATOR LAVALLE: How you can ensure the 1 financial viability of those hospitals? 2 What are you going to do? 3 Are we doing an audit of those hospitals, or, 4 what are we doing? 5 DR. JOHN WILLIAMS: Again, we haven't gotten 6 to that state yet. This was all part of the plan 7 that we were putting together. 8 And as I said, right now, all of those 9 hospitals are positive. 10 LORA LEFEBVRE: Yeah, and I guess I would 11 just add to that, is that the part of the plan that 12 asks for this organization, this Brooklyn Health 13 Improvement Corp. -- Public-Benefit Corporation, is 14 really the place where all of these institutions, 15 and perhaps even more, could, basically, come and 16 start pounding through some pretty granular, kind of 17 clinical, service-line arrangements, network 18 development, and physician kind of organization. 19 Because I think that the bottom line is, 20 despite the fact that they -- these other 21 institutions are doing well, or breaking even now, 22 the whole thrust of health care is towards 23 consolidation. And standing alone is not going to 24 guarantee a sustainable future. 25 So I think the bet -- from our perspective, 1 or my perspective, the bet is for everybody, and I 2 think people would agree with that, that they need 3 to come together, so there's an incentive there. 4 SENATOR LAVALLE: Well, there's no doubt that 5 the three hospitals that you mentioned would gain 6 because of the -- what Dr. Williams indicated; 7 once they go to managed care, they are going to get 8 much better rates than they are getting now, so, 9 their balance sheet will improve almost immediately. 10 But what about your balance sheet? 11 Are you going -- because of the three 12 hospitals, or more, will managed care give you -- 13 DR. JOHN WILLIAMS: Yes. 14 SENATOR LAVALLE: -- higher -- 15 DR. JOHN WILLIAMS: Yes. 16 As a consortium of hospitals, yes. 17 Now, our potential to increase is there as 18 well. 19 SENATOR LAVALLE: So, we're going to put 20 these hospitals together, with Downstate. 21 How long will that take? 22 Because we're losing money now. Okay? 23 LORA LEFEBVRE: Right. 24 DR. JOHN WILLIAMS: Sure. 25 SENATOR LAVALLE: So I'm trying to figure 1 out, how long are we going to be losing money? 2 LORA LEFEBVRE: Well, so -- so what we've 3 laid out here, is that we will continue to be more 4 efficient. 5 But, I mean, our projections, at this point 6 in time, have us continuing to lose money through 7 '17. There's no question about that. 8 We can continue to work to become more 9 efficient, and all of those other things. 10 At the same time, what we're asking for, 11 day one, is legislation, to kind of hold this 12 network-development organization, to invite in 13 others, to hopefully influence that number at this 14 point in time. 15 Since we don't know who our partners are, I 16 mean, Skip's done a great job in talking with folks 17 in Brooklyn, but, that might not be all of the 18 potential there. 19 We didn't really allow the numbers to be 20 influenced by that. We just know that there's 21 potential there. 22 So, it takes a while. 23 SENATOR LAVALLE: Aren't you putting the cart 24 before the horse? 25 I mean, you don't know what the hospitals 1 are; what their bottom line is. 2 You believe they are healthy. Could be 3 three, could be five. 4 There are other health-care needs, or 5 different types of health-care needs, in the 6 borough. 7 And I'm sure that the other members will talk 8 about that. 9 DR. JOHN WILLIAMS: Well, Senator, what we 10 have looked at is a start. 11 Right now, we've been doing nothing, and all 12 of the hospitals in Brooklyn are threatened. 13 It's a broken system -- there is no system in 14 Brooklyn. 15 And, so, we -- given the short amount of time 16 that we had, we had to look for: What would be the 17 best solution that we could come up with for 18 Brooklyn? 19 Now, the hospitals that I have spoken to all 20 recognize that they could run into substantial 21 difficulty as well. 22 And they, quite frankly, don't have another 23 solution except to stand alone. 24 They've tried with some of the big hospitals 25 in Manhattan, but they don't really get anything 1 from that. 2 SENATOR LAVALLE: No, I -- I don't want you 3 to -- I think this is moving in the right direction, 4 where we are in health care. 5 And I'm certainly sitting next to the expert 6 in health care. 7 But, what I'm trying to get into is some of 8 the detail. 9 So, Chairman McCall, the board is going to 10 allow three hospitals without any due diligence? 11 H. CARL McCALL: No, Senator. 12 First of all, what the board is asking you to 13 do, is to provide legislation to create this entity, 14 with understanding, that if the entity is in place, 15 then we have something to offer the other hospitals, 16 then we can have the kind of detailed discussions 17 with them about their finances, and make decisions 18 about their participation. 19 But, right now, we can't get into details 20 because we don't have the entity that we're asking 21 for. 22 SENATOR LAVALLE: So that entity is the 23 public-benefit corporation? 24 H. CARL McCALL: Public-benefit corporation, 25 which will not operate hospitals, but would be a 1 coordinating body, to bring together hospitals into 2 a network, to share services, to do joint planning, 3 and to do joint procurement, and other activities. 4 SENATOR LAVALLE: So we're going to set up 5 another layer of government. We don't know -- to 6 not run the hospitals. 7 H. CARL McCALL: That's right. 8 SENATOR LAVALLE: To do procurement. 9 LORA LEFEBVRE: Planning. 10 SENATOR LAVALLE: Planning. 11 NANCY L. ZIMPHER: And the distribution, 12 Senator, of health care. 13 I think one of the challenges of the 14 University Hospital, is that it was doing 15 everything; a little bit, or a lot. 16 This gives us an opportunity to be more 17 planful across the borough, in the way we deliver 18 health care, where we do ambulatory care, where we 19 do primary care. 20 There's been no system in the borough for 21 sorting out the delivery of health care. 22 SENATOR LAVALLE: So the public-benefit 23 corporation's gonna do all that? 24 NANCY L. ZIMPHER: It is going create a 25 network, to plan a better distribution process for 1 health-care delivery in the borough. 2 Something that I think we all agree, has been 3 missing for decades. 4 SENATOR LAVALLE: Okay. That's -- 5 NANCY L. ZIMPHER: So it is to be more 6 planful, more strategic, more balanced, in the way 7 we offer care to the citizens of this borough. 8 And it's a big idea in that respect. 9 It's a new idea. It's something that has not 10 been generated by any of the critical stakeholders 11 to date. 12 So, I would just say, as a complement to the 13 Assembly and the Senate, because you called us, to 14 give you a sustainability plan, we have broadened 15 the base and the understanding of health-care 16 delivery in Brooklyn, beyond what 17 University Hospital or LICH can do, but to what we 18 can do together. 19 And I think we've come to believe that is our 20 best hope. 21 SENATOR LAVALLE: What happens to you and 22 Chairman McCall? 23 We don't deal with you anymore? We deal with 24 this -- 25 H. CARL McCALL: No, we will be a part of 1 this network. You'll still deal with us. 2 We will be a participant in the network; 3 however, the network will be a state agency, and you 4 will deal with them as well. 5 But, believe me, our relationship will go on, 6 we hope, because we are University Hospital, funded 7 by the State. 8 SENATOR LAVALLE: Chairman, I have all to do 9 to deal with both you and the Chancellor. 10 Now, you're asking to deal with you, the 11 Chancellor, and another entity. And then, of 12 course, Dr. Williams. 13 I -- 14 SENATOR HANNON: Think of how it is to deal 15 with 300 hospitals in New York State. 16 [Laughter.] 17 SENATOR LAVALLE: Well, let me ask you: 18 Could this not happen without a 19 public-benefit corporation? 20 NANCY L. ZIMPHER: I think, Senator, we have 21 a lot of evidence, that finding a vehicle for 22 bringing these hospitals into some form of 23 collaboration network has not, in and of itself, 24 generated the kind of cooperation and collaboration 25 that we think is necessary. 1 So I think the time has come for us to create 2 a vehicle that will bring this kind of integration 3 to bear. 4 And we've simply have not seen it in the 5 past, so we're making a recommendation that we think 6 will get us to a new place in Brooklyn. 7 SENATOR LAVALLE: Are you planning to do this 8 at Upstate and Stony Brook? 9 NANCY L. ZIMPHER: Well, I think, Senator, 10 what we're learning about our academic medical 11 centers, is that, they're four very unique 12 enterprises, and one size does not fit all. 13 So, we're listening very carefully to the 14 recommendations of Stony Brook and of Upstate, as 15 they attempt to resolve and create a better future 16 for themselves. 17 So, we know that one size doesn't fit each of 18 our campuses, but, we also think there is promise in 19 working together around procurement, and other 20 issues. 21 SENATOR HANNON: Let me just, for a second 22 point. 23 SENATOR LAVALLE: Of course. 24 Yes, Senator Hannon. 25 SENATOR HANNON: There is some powers that 1 had been requested by the Administration, concerning 2 how the Department of Health could oversee and be 3 empowered in regard to hospitals, in regard to 4 temporary operator, in regard to control over boards 5 of directors, control over the documents of a 6 hospital. 7 And, in this year's budget, each of those 8 powers was given to the Commissioner of Health. 9 So, that, to the extent that prior efforts at 10 trying to have a more integrated system, Brooklyn, 11 or any other area, and they were not successful. 12 And these things had been urged by the 13 original Berger Commission, by the Medicaid Redesign 14 Team-Berger Report, so they're now there. 15 And the whole background for implementing 16 consultation, I would hope would be in a better 17 place than in the past. 18 SENATOR LAVALLE: The last part of my 19 questioning, because I want to let my colleagues, I 20 just want to go back to LICH. 21 So, I just want to understand what's 22 happening there. 23 LORA LEFEBVRE: Sure, I can take you through, 24 like, a quick timeline. 25 So, early in January, because of the 1 financial difficulties at LICH, SUNY submitted a 2 closure plan to the Department of Health, because 3 our intention was to exit. 4 We were restrained by the court, immediately, 5 and were asked not to continue to execute the 6 closure plan or talk with the Department of Health. 7 In the meantime, this legislation, valuable 8 legislation, on developing a sustainability plan was 9 enacted. 10 The sustainability-plan process asked us to 11 consult with stakeholders. 12 We believe that the Department of Health is a 13 very important stakeholder in this process. 14 So the board, and Chancellor, made the 15 decision to, basically, withdraw the closure plan, 16 in hopes of becoming free to talk with the 17 Department of Health. 18 The petitioners did not withdraw their 19 claims, and so we still find ourselves under a 20 restraint by the court. 21 In the meantime, what we did was, Skip had 22 done a very great job of reaching out to all of the 23 health-care providers in the downstate community 24 that had the breadth to perhaps consider running 25 LICH. 1 And we didn't get any -- we didn't get any 2 thumbs up. 3 So what we did, at that point in time, was 4 step back and do a more formal process, which is 5 this request-for-information process that we -- I 6 talked about, and are engaged in, and, basically, 7 threw the doors open, and said: Look, we would like 8 somebody to come in and operate some type of 9 health care at LICH. Are there any interested 10 parties? 11 And, again, we've received about 12 seven interested, you know, letters, and we are in 13 the process of evaluating those. 14 And I expect, at some point, we will go 15 through a formal procurement process, that we need 16 to go through, to kind of follow through with the 17 disposition of that. 18 But, regardless, given the nature of the 19 fiscal difficulties over at LICH, we are still of 20 the opinion that we need to exit the operation at 21 LICH. 22 SENATOR LAVALLE: Yeah, let me -- we have a 23 $4.5 million problem each month. 24 LORA LEFEBVRE: Yeah. 25 DR. JOHN WILLIAMS: Yes. 1 SENATOR HANNON: Have you looked at -- the 2 Chancellor referenced the assumptions that had been 3 put on paper for the acquisition of LICH, and that 4 those plans were not really implemented. 5 Has anybody gone back and looked at those 6 assumptions again, to see whether or not, if they 7 were implemented, it would have a different 8 situation in regard to your affiliation with LICH, 9 or, were those assumptions simply not practical? 10 DR. JOHN WILLIAMS: Some were practical, and 11 some weren't. 12 One of the big issues was the volume of 13 patients that was not coming to the hospital. 14 It's already -- always had a steady set of 15 patients, but not enough to pay the bills. 16 And, we still have a significant proportion 17 of the population that gets their health care in 18 Manhattan. 19 One of the things about that area is, you do 20 have a lot of young people who don't go to 21 hospitals. They get yearly physicals, but they 22 don't go to hospitals. 23 And that's been a big part of the problem. 24 SENATOR HANNON: Thank you. 25 SENATOR LAVALLE: I just want to mention 1 we've been joined by Senator Adams and 2 Senator Felder. 3 SENATOR STAVISKY: Let me just ask a number 4 of questions. 5 As I was listening to you, Dr. Williams, 6 you're limiting your choices to Brooklyn. 7 Have you thought of -- you know, I come from 8 a borough of close to 2 million people, and we are 9 seriously underbedded in Queens County. We've had a 10 lot of closures. 11 But have you thought of some of the other 12 networks besides hospitals in Brooklyn? 13 DR. JOHN WILLIAMS: We have not, to a large 14 degree. We have talked to one hospital in 15 Staten Island so far, that is very interested in 16 being a part of this as well. And, it's a hospital 17 that we already send residents to, medical students 18 to. We're going to have a joint surgery program. 19 And, so, they would be a likely candidate, 20 but I have not thought beyond that. 21 SENATOR STAVISKY: I will let others get into 22 the restructuring aspects, but let me just focus on 23 one issue, and that is, the projection of 24 approximately 15 percent of the workforce being 25 replaced. 1 DR. JOHN WILLIAMS: Well, again, I don't know 2 if it's 15 percent. That sounds awful high to me. 3 SENATOR STAVISKY: Sounds high to me too. 4 That's why I'm asking. 5 DR. JOHN WILLIAMS: But, one of things that 6 we believe that can happen with a corporation like 7 this, is that we know, when the Affordable Care Act 8 is fully implemented, you have to do much more 9 primary care, so we have to build primary-care 10 centers. 11 And, anybody that would potentially be let go 12 from acute-care hospital could be moved into 13 primary-care settings. 14 We are woefully, woefully understaffed in 15 primary care in Brooklyn. 16 And we know that that's something that we 17 absolutely have to do. 18 And that is a way that we can maintain jobs. 19 SENATOR STAVISKY: All right, let me focus on 20 the public-benefit corporation, because I have some 21 major concerns, particularly when you mentioned the 22 MTA and DASNY, neither of which were -- well, 23 particularly, the MTA is certainly not known for its 24 transparency or accountability. 25 And I find that model to be somewhat 1 disturbing. 2 First of all, some of these agencies have 3 bonding authority. 4 Would this public-benefit corporation be 5 permitted to issue bonds? 6 LORA LEFEBVRE: I don't think that we -- just 7 let me start with your comment on the MTA. 8 What I was trying to do with -- 9 SENATOR STAVISKY: Was give an example. 10 There's hundreds -- 11 LORA LEFEBVRE: -- illustrate that there are 12 different kinds. 13 SENATOR STAVISKY: -- hundreds of 14 public-benefit corporations. 15 LORA LEFEBVRE: And to your point about debt 16 issuance, I think -- we're not going be developing 17 this legislation. 18 Certainly, I think we have elements of the 19 legislation that we think would be desirable. 20 And I would say that public-benefit 21 corporations can certainly help in capital 22 formation. 23 Let me stop there and say, every single 24 physical plant of a hospital in Brooklyn is aged out 25 beyond capacity. 1 The depreciation has not been going back into 2 the physical plants, so you do not have a good new 3 hospital there. 4 So, as a future look, allowing for this 5 public-benefit corporation to have that debt 6 capacity is a consideration. 7 I don't think we're recommending that. I'm 8 pointing out that it could be a benefit. 9 And public -- and, I'm sorry. 10 And primary care. 11 Oh, my gosh! 12 You know, as Skip points out, the 13 primary-care need in the borough is amazing. And it 14 takes -- it takes capital to get those places up and 15 running too. 16 SENATOR STAVISKY: And we can't do what they 17 do in higher ed, which was call it "critical 18 maintenance," instead. 19 The $75 million that you have borrowed from 20 the SUNY reserves, would this be absorbed by the 21 public-benefit corporation? 22 UNKNOWN MALE PANELIST: No. 23 LORA LEFEBVRE: Absolutely not. 24 SENATOR STAVISKY: They would not be 25 operating the hospitals per se, so aren't -- in a 1 sense, they're doing the job that SUNY had been 2 trying to do? 3 LORA LEFEBVRE: Sue -- what I would say is 4 that, SUNY has been, I think, in large degree, 5 operating on its own, just like every other, you 6 know, hospital in Brooklyn has fundamentally been 7 doing. 8 And I think that what we're suggesting is, 9 there needs to be kind of an organizing principal, 10 an organizing place, where these partnerships can 11 begin to develop, because no one's been doing it 12 well in Brooklyn up to this point in time. 13 So, we really -- all of us need to be doing 14 it. All of us providers. 15 DR. JOHN WILLIAMS: And the last group we saw 16 put together was the Long Island Health Network. 17 And, again, they're all independent. There's 18 ten or eleven of them, but they get significant 19 benefit when they contract; when they go to vendors, 20 when they do procurement. 21 And that has actually saved a couple of those 22 hospitals on Long Island, as a result. 23 SENATOR STAVISKY: That concept of 24 procurement and -- is something that I know the 25 Chancellor has been advocating for quite some time. 1 And I have been somewhat reluctant to support 2 the idea of contracting outside of government 3 service, to private. 4 And I assume that this is not the concept -- 5 okay. 6 That's not my question. 7 That is not what you're talking. 8 You're talking about consolidation. 9 LORA LEFEBVRE: Right. 10 SENATOR STAVISKY: Purchasing. 11 Good. That's fine. 12 My last question: My concern is the question 13 of accountability; the makeup of the public-benefit 14 corporation. 15 How are you going to ensure that the public, 16 that the Legislature, that the health-care 17 professionals, have a voice in making sure that it 18 is as transparent as it can be? 19 LORA LEFEBVRE: I would expect, again, that 20 we would be one of many voices in the creation of 21 the legislation for this public-benefit corporation. 22 And I'm sure that those are considerations 23 that all people would bring to the table. 24 SENATOR STAVISKY: Thank you. 25 SENATOR LAVALLE: Before I recognize 1 Senator Golden, I have been going down a path, and 2 then Senator Hannon asked a question, and I never 3 let you finish your answer on the 60 million that 4 was in the budget. 5 LORA LEFEBVRE: Oh, sure. Yeah, yeah, yeah. 6 So in 2013-14, SUNY received $60 million for 7 what I would call "base-level support" for all three 8 of our hospitals. 9 And, generally, we allocate based on -- in 10 the past we have allocated that 60 million based on 11 the size of the workforce, different measures. 12 SENATOR LAVALLE: Uh-huh? 13 LORA LEFEBVRE: So, generally, that works out 14 to be about 20 million, you know, roughly. It cuts 15 a little bit differently. 16 Additionally, what we have received this year 17 was, 27.8 million, I think -- 18 SENATOR LAVALLE: That's correct. 19 LORA LEFEBVRE: -- in addition, that was 20 predicated on deficit-reduction leave savings, that 21 was -- once the contract is signed, and approved -- 22 SENATOR LAVALLE: That is correct. 23 LORA LEFEBVRE: -- will, ostensibly, 24 accrue -- 25 SENATOR LAVALLE: But just focus on the 1 60 million. 2 LORA LEFEBVRE: Okay. 3 SENATOR HANNON: You added the 27 million? 4 SENATOR LAVALLE: No. 5 LORA LEFEBVRE: So -- 6 SENATOR LAVALLE: I'm just focused on, how is 7 that going to be distributed? 8 LORA LEFEBVRE: Right. 9 So that determination, at this point in time, 10 hasn't been made. We haven't made that decision 11 yet. 12 I would have to say that I don't expect any 13 dramatic departures from years in the past. 14 SENATOR LAVALLE: Okay. 15 Uhm, okay. 16 Dr. Williams, I just want to -- 17 And I said to myself, not to do what I'm 18 going to do. 19 -- but, I would chat with the people at 20 Stony Brook, to see how they're putting together a 21 network, and how they're allowing hospitals to 22 specialize in certain areas, that -- so forth and so 23 on, without any supersystem. 24 I hear, you know, every area is different. 25 We've gone through Berger. We've gone 1 through two decades of denial in Brooklyn. 2 So, you know, it's a deep hole to come out 3 of, I understand that, but there are other 4 methodologies that you might want to look at. 5 Senator Golden? 6 SENATOR GOLDEN: Thank you, Chairman. 7 Both Chairman, thank you. 8 This obviously is something that we've been 9 asking for, and I want to commend my colleagues, the 10 two Chairs, for putting this together and getting 11 this done in a timely fashion before we get out of 12 Albany here, so that we can take, hopefully, some 13 proper actions that will give us a real health-care 14 system in Brooklyn. 15 My colleagues know that the -- it's somewhere 16 between 15 and 16 percent across to -- of health 17 care to the economy. 18 And I just seen a number the other day, is 19 about 18 percent. And that's growing. 20 And we know that Medicaid is about 21 $56 billion here in the state of New York, and we've 22 taken an awful lot of steps to try to reduce that, 23 but, it's growing. 24 And we need to be able to get health care 25 under control in Kings County, and the reason for 1 that is because of the size of Kings County, 2 2 1/2 million people -- 2.6 million people, and 3 growing. 4 We have a need for physicians in many 5 sections of the Brooklyn neighborhoods that have 6 shortages of OG/BYN [sic]. 7 Certain OG/BYNs [sic] won't go into certain 8 communities because of the insurance. 9 We have serious problem in primary care. 10 And, of course, we got the gerontology, one 11 of the oldest populations in the entire state, and 12 probably in the country. We're probably in the top 13 five when it comes to the number of seniors that we 14 have in the community. 15 So the perspective, going forward, is we have 16 some serious work to do, to be able to get 17 health care under control. 18 And, of course, the high Medicaid, Medicare, 19 rate in the county of Kings is also -- has a severe 20 impact. 21 My colleagues also understand, and as 22 everybody in this room does, that Brooklyn is ground 23 zero when it comes to health care. 24 And that if we don't correct it, it impacts 25 our SUNYs, it impacts health care across the state 1 of New York. 2 It impacts Medicaid and Medicare, and it 3 impacts a whole host of entities that I don't want 4 to go into at this point because it would take too 5 long. 6 I do understand that the need for this 7 private-public partnership. 8 Why would -- how does a hospital get in or 9 out of this public-private partnership? 10 LORA LEFEBVRE: Well, I think that one would 11 hope that their self-interest would, basically, 12 inspire them to join up. 13 I don't know that we've thought through the 14 granular details of, mechanically, you know, how the 15 relationships would work. I think that those could 16 and would evolve. 17 But I think that there -- again, there's a 18 lot of self-interest that should be driving these 19 decisions to opt in or opt out. 20 SENATOR LAVALLE: The hospitals that haven't 21 opted in yet, obviously, are probably hospitals that 22 are already significantly in the black, and are 23 concerned about the balance sheet that you 24 presented, and the plan, and being able to be get 25 that plan under control within the period of time 1 that you've -- 2017; correct? 2 Would that be one of the issues? 3 LORA LEFEBVRE: I don't know the 4 conversations have matured to a point where -- where 5 there's like a opt-in/opt-out decision point. 6 I think that it's -- I think it's just -- 7 it's in the formative stages. 8 DR. JOHN WILLIAMS: Senator, when I began the 9 process, it was just presenting a concept to other 10 hospitals in Brooklyn, because, like so many others, 11 I could just see there was a huge hole. And I was 12 just trying to think of how we could fill that hole. 13 And we believe that this is the mechanics for 14 how to do that. 15 And if we do get the legislation, then it's 16 time to really have substantive discussions. 17 SENATOR GOLDEN: You definitely put a smile 18 on Chairman LaValle's face when you say "fill that 19 hole," because that is, obviously, something that 20 both the Chairs are very concerned about, and so are 21 my colleagues here from Kings County, and from the 22 rest of the state, because if you don't get that 23 under control, you not only impact the health care 24 in Kings County, but you help impact the health-care 25 systems across the SUNYs and across the rest of the 1 state. 2 So, you're in the beginning stages. 3 When does the white paper, when is that 4 created? 5 When is the actual thought process put to 6 paper, and so that the hospitals can understand -- a 7 better understanding of how this partnership is 8 going to work, and when it can begin? 9 LORA LEFEBVRE: So the way that we've thought 10 about it, is that we would need the structure first. 11 So, you know, I think that the white paper 12 could evolve once the structure is created. 13 SENATOR GOLDEN: And do you have a timeline 14 as to when you think that might take place? 15 LORA LEFEBVRE: We thought that the structure 16 could be created now, with your consideration; 17 And then the planning process would take 18 about a year to get, you know, folks involved; 19 And then another two years to really evolve 20 the business relationships and the network. 21 So, we've got it going out into '17. 22 SENATOR GOLDEN: I pointed out how you got a 23 smile out of the Chairman when you said you were 24 going to fill that hole. 25 I hope he continues to smile when we ask him, 1 and how we're going to get that piece of legislation 2 done within the next two weeks, and if that is a 3 good possibility, I think is something I guess we 4 have to talk to the -- Senator LaValle and 5 Senator Hannon, as to how that would come about. 6 Senator LaValle, you have any idea that we 7 can -- Chairman, that we can put this legislation 8 together if we have some more ingredients from 9 Dr. Williams and from Chancellor Zimpher? 10 SENATOR LAVALLE: I think we've begun a 11 process. 12 I don't know how quickly, you know, we'll get 13 through the process, but anything is possible in the 14 land of Oz. 15 [Laughter.] 16 SENATOR GOLDEN: I'm not going to ask my 17 question, but -- to my colleagues, but, after, I 18 would like to have, obviously, a conversation on how 19 this is going to be managed by the Health Committee, 20 and by the -- your Committee. And we'll have that 21 conversation later. 22 SENATOR LAVALLE: Senator Golden, we have a 23 conversation every day. 24 SENATOR GOLDEN: Oh, believe me, I do. 25 Thank you. 1 SENATOR LAVALLE: Senator Parker? 2 SENATOR PARKER: Thank you. 3 First, let me just begin by thanking both 4 Chairman LaValle and Chairman Hannon for pulling us 5 together and for asking such great detailed 6 questions. 7 I really appreciate the opportunity for us to 8 discuss this. 9 As you know, I'm -- I represent the 10 21st District in Brooklyn, which is East Flatbush 11 and Flatbush, Midwood, Ditmas Park, Windsor Terrace, 12 Park Slope. 13 And I -- although the hospital and the 14 University Center is not in my district per se, but 15 it's certainly in the catchment area of both; the 16 service catchment area, as well as many of the 17 employees and people who work and are impacted by 18 the Downstate community in my area. 19 I wanted to thank, particularly, 20 Chairman McCall and Chancellor Zimpher for coming 21 forward when this situation arose last year, about 22 almost a year ago, and immediately stepping to the 23 plate, not just with the alarm, but also with a 24 partial solution in the lending of the $75 million. 25 And that has been important for us to get to 1 this point. 2 I am very open to, and I just wanted to thank 3 both Laura and Dr. Williams for their work around, 4 both stabilizing the hospital and trying to turn it 5 around economically, as well as putting this plan 6 together. 7 And I would definitely -- we definitely, I 8 think, recognize how difficult this exercise has 9 been. And I think your commitment to maintaining 10 the hospital, I think, is critical. 11 But I wanted to ask a couple of questions, 12 just to -- just have it on the record, and make sure 13 that we're all clear and talking about the same 14 thing. 15 And I'm not going be as technical as 16 everybody else, so I just have some real basic 17 questions. 18 So, first, I know you're proposing in your 19 recommendation, a public-benefit corporation. 20 Real, real basic: Is University Hospital 21 going to exist, going forward? 22 LORA LEFEBVRE: Yes. 23 SENATOR PARKER: Okay. 24 And we're talking about reducing -- how many 25 people -- what's the current census at the hospital? 1 And we're just talking about 2 University Hospital now. I'm not talking about 3 LICH. 4 So just at University Hospital, what's the 5 headcount? 6 DR. JOHN WILLIAMS: About 300. 7 SENATOR PARKER: About 300...? 8 LORA LEFEBVRE: Patients -- 9 SENATOR PARKER: ...patients? 10 LORA LEFEBVRE: Patients. 11 DR. JOHN WILLIAMS: Uh-huh. 12 SENATOR PARKER: Patients. 13 And when you're done, how many beds for 14 patients will you be able to -- actually, I'm asking 15 two different -- that's apples and oranges. 16 I apologize, let me go back. 17 What's the current capacity, in terms of 18 beds, do you have now at University Hospital? 19 DR. JOHN WILLIAMS: About 340. 20 SENATOR PARKER: All right. And I'm guessing 21 that your recommendation is going to reduce both the 22 beds and the staff census at the hospital? 23 DR. JOHN WILLIAMS: Correct. 24 SENATOR PARKER: So, right now, you have a 25 capacity of about 340. 1 What do you expect that capacity to go down 2 to? 3 DR. JOHN WILLIAMS: Not 100 percent sure. 4 We're still doing the service-line analysis 5 right now, and that's why it's so important to work 6 with these other hospitals, because everybody 7 realizes you can't be all things to all people. 8 So, every hospital is not going to have 9 cardiac surgeon -- 10 SENATOR PARKER: Right. 11 DR. JOHN WILLIAMS: -- or a neurosurgeon. 12 Rough guestimate, 275, 280. 13 SENATOR PARKER: Okay. 14 And what's the staff census currently? 15 DR. JOHN WILLIAMS: About 3,000? 16 LORA LEFEBVRE: That sounds about right. 17 DR. JOHN WILLIAMS: 3,000. 18 SENATOR PARKER: About 3,000. 19 And you would rightsize down to about...? 20 DR. JOHN WILLIAMS: Probably, and, again, 21 rough, rough guess, 2500. 22 SENATOR PARKER: Okay. 23 So you're talking about -- 24 DR. JOHN WILLIAMS: Minimum. 25 SENATOR PARKER: -- about -- at least 1 500 people? 2 DR. JOHN WILLIAMS: Yes. 3 SENATOR PARKER: Do you know what bargaining 4 units those people are going to be in? 5 DR. JOHN WILLIAMS: No. 6 SENATOR PARKER: Okay. 7 DR. JOHN WILLIAMS: I don't know off the top 8 of my head. 9 SENATOR PARKER: Okay. 10 LORA LEFEBVRE: But I mean, technically, most 11 of the employees at Brooklyn are represented by UUP. 12 SENATOR PARKER: Okay. 13 LORA LEFEBVRE: I mean, like, just 14 proportionately. 15 SENATOR PARKER: Right, just -- okay. 16 So, proportionately -- so because the 17 hospital is disproportionately members of UUP, 18 proportionately, when you get rid of them, the vast 19 majority of them are going to also be UUP employees, 20 currently? 21 LORA LEFEBVRE: I don't know that -- 22 SENATOR PARKER: Okay. 23 LORA LEFEBVRE: -- because we don't know how 24 it's going to break down, but I just wanted to point 25 out that a proportion was UUP. A large portion. 1 SENATOR PARKER: Thank you. 2 NANCY L. ZIMPHER: Senator? 3 SENATOR PARKER: Yes? 4 NANCY L. ZIMPHER: Just with my colleague 5 here, we want to remind you that one of the benefits 6 of the public-benefit corporation is the 7 distribution of talent and professionals across a 8 new plan for the delivery of health care. 9 So we hope, again, we're trying to be 10 planful, that the migration of people who are 11 affected by the downsize may migrate to other places 12 where they can be of service. 13 That's a big part of our HR effort, to help 14 people find their way. 15 DR. JOHN WILLIAMS: And the other part, I 16 don't know if you were here when I mentioned this, 17 Senator, is the fact that we have to create an 18 efficient, strong, and large primary-care network, 19 and that's going to require people to work at those 20 sites. 21 SENATOR PARKER: Okay. 22 So as you changed, both, the beds, and 23 reduced the number of staff that are assuring 24 quality of care, how do you maintain quality of care 25 in that environment? 1 DR. JOHN WILLIAMS: Well, again, I think 2 every published report since I have gotten here has 3 shown that our quality remains extremely high. 4 And, we continue to push quality. 5 We have hired a number of people back in 6 critical areas that we thought that the previous 7 administration had made a mistake. 8 And we're going to look at this very, very 9 carefully, and "we will not" -- we will not harm 10 quality of care in this hospital. 11 SENATOR PARKER: So you think that you can 12 serve the same amount of patients with less beds and 13 less people, and still maintain quality of care? 14 DR. JOHN WILLIAMS: Yes. 15 SENATOR PARKER: Okay, and how does that 16 exactly happen? 17 DR. JOHN WILLIAMS: Because in some areas 18 there are too many people that are currently doing 19 the job. 20 SENATOR PARKER: So it sounds like you may 21 have some idea, currently, about what areas you're 22 going to be looking to downsize. 23 So, do you have any sense now about what 24 areas you're looking to either change or eliminate 25 in the hospital? 1 DR. JOHN WILLIAMS: Again, we're not talking 2 about elimination. 3 What we're talking about is, looking at every 4 service line. There are certain things that you -- 5 that are required because you're a medical school as 6 well, that you have, but we have certain specialties 7 where we may only have, you know, 10 patients a 8 week. 9 And we have to look at: 10 How do we consolidate those? 11 How do we make the clinics more efficient? 12 Otherwise, we continue to lose money. 13 SENATOR PARKER: So, by and large, you're 14 saying all the functions that University Hospital 15 Brooklyn has now, will continue to have under the 16 new arrangement? 17 DR. JOHN WILLIAMS: No, I'm not saying that. 18 SENATOR PARKER: Okay, so that means that 19 some things, they're not going to exist? 20 DR. JOHN WILLIAMS: Correct. 21 SENATOR PARKER: Right, and do we know which 22 ones -- which -- 23 DR. JOHN WILLIAMS: I do not, no. 24 We're in the middle of that analysis. 25 SENATOR PARKER: How soon do you expect that 1 we'll have an answer on that? 2 DR. JOHN WILLIAMS: I think the 3 Pitts Management Group said probably another 4 two months. 5 SENATOR PARKER: But we're going to need to 6 vote on things and have a complete plan prior to 7 that; correct? 8 So you want us to make a complete decision 9 with incomplete information? 10 DR. JOHN WILLIAMS: No, no, no. 11 We will get you the most up-to-date 12 information we can possibly get you. 13 SENATOR PARKER: Okay. 14 DR. JOHN WILLIAMS: I mean, we're in the 15 process of it right now. 16 And, we'll just put more people on it and 17 drill down. 18 SENATOR PARKER: My quick concern, is that we 19 need -- the last day of the legislative session 20 right now is scheduled for June 22nd. 21 And if this is not going to be decided for 22 another two months, two weeks in, even if we did it 23 on the last day, is a lot of time -- is a lot of 24 time -- yeah, a lot of information to have in a very 25 little bit amount of time. 1 So, I just want to just bring that to your 2 attention. 3 DR. JOHN WILLIAMS: Sure, sure. 4 SENATOR PARKER: Just to ask you a couple 5 other questions about quality of care -- well, let 6 me -- 7 $75 million, and I know a couple of my 8 colleagues have talked about the loan, what's the 9 plan, currently, to repay the loan? 10 DR. JOHN WILLIAMS: The plan right now is to 11 get the hospital to at least a break-even position 12 before we can even talk about repaying the loan. 13 Right now, I've been have been honest with 14 the Chancellor and the Chairman. 15 There is no chance of repaying that loan 16 right now. 17 And, again, I have been here 10 months. 18 We said that it would take 18 to 24 months 19 before we would recognize some significant savings. 20 We're ahead of where we thought we would be, 21 and we're trying to accelerate that much as we 22 possibly can. 23 SENATOR PARKER: It sounded like, if 24 somebody -- in one of your previous answers to 25 Senator LaValle, that you thought that, because of 1 the structure of University Hospital, that, unlike a 2 private hospital that's dependent on, you know, 3 essentially, being sustainable within itself, that, 4 because of the nature of the patients, and because 5 of the reimbursement rate, that, in fact, it was 6 almost impossible to run University Hospital without 7 additional State support? 8 DR. JOHN WILLIAMS: Correct. 9 SENATOR PARKER: Okay. So -- 10 DR. JOHN WILLIAMS: Yeah, if you look at 11 private hospitals and you look at public hospitals, 12 and you look at where the expense is, you see a 13 marked difference there. 14 SENATOR PARKER: Right. 15 DR. JOHN WILLIAMS: And, I don't know of any 16 state hospital in the country that doesn't get 17 significant state support. 18 SENATOR PARKER: Okay, so during the budget 19 negotiations, we had a number of "$150 million" that 20 we needed. At the time, we were working off a 21 three-year-transition number. Right? 22 We were talking about a three-year 23 transition, and so we're saying, at least for 24 two years, that we needed the State support at that 25 level. 1 And then by year three, you know, it would be 2 a -- it may be either gone or be significantly 3 reduced. 4 We have, I guess, I don't know, are we still 5 talking about another two years of transition, at 6 least? 7 DR. JOHN WILLIAMS: Correct. 8 SENATOR PARKER: Okay. So how much -- how 9 much -- 10 DR. JOHN WILLIAMS: We're going out to '17. 11 SENATOR PARKER: So how many -- how much 12 funding in State support do you think that 13 University Hospital needs, even if we implement this 14 public-benefit corporation and everything goes 15 right? 16 How much State support are you going to need 17 for the transition over the next two years? 18 And then, ongoing, it sounds like, even as an 19 ongoing concern, that University Hospital is always 20 going to depend on some level of State support? 21 And what do you, in fact, expect that State 22 support, yearly, to be? 23 LORA LEFEBVRE: So, Senator, on one of the 24 slides, it lays that out. 25 So what we expect, or what we need, is the 1 continued the level of State and SUNY support, just 2 kind of baseline support, of 44 million. 3 In addition to that, we need 81 -- this is in 4 this year, '14, another 81 million for closing our 5 gap at UHB, plus another 35 million to wind down 6 operations at LICH. 7 So it gets back up to that, you know, 8 "150" number that we had been talking about before, 9 for '14. 10 It starts coming down, you know, because the 11 effects of the restructuring in future years. 12 SENATOR PARKER: Is the Governor aware of 13 that? 14 LORA LEFEBVRE: Oh, my gosh, yes. 15 I mean, this has been like a total 16 consultative, you know, stakeholder process. 17 SENATOR PARKER: And has the Governor 18 indicated that he is committed to maintaining 19 University Hospital in Brooklyn as an ongoing 20 concern in that matter? 21 LORA LEFEBVRE: So as we've been talking to 22 his staff, they have articulated a number of things. 23 They've said: We've given you -- 24 collectively, given you the plan language. Please 25 develop a plan. Show us what you are thinking 1 about, and what you need. 2 And they've also articulated any number of 3 times, how they acknowledge the importance of the 4 medical school, and the survival of the medical 5 school in Brooklyn. 6 SENATOR PARKER: Yes, but not the hospital? 7 LORA LEFEBVRE: I've told you what they -- 8 what they said, and their responses. 9 SENATOR PARKER: So do you have any sense of 10 whether the Governor's Office thinks that they can, 11 in fact, run a world-class medical school, which 12 this is, without a dedicated hospital? 13 LORA LEFEBVRE: I think you'll have to ask 14 them that. 15 SENATOR PARKER: Okay. 16 NANCY L. ZIMPHER: Senator, I think -- 17 SENATOR PARKER: We have a candidate for the 18 Senate. 19 Sorry. Go ahead. 20 NANCY L. ZIMPHER: Well, I was just going to 21 say that, through this long and very difficult 22 process, some weeks ago, we were able to create a 23 table that I think really allowed us to be more 24 creative about our planning process. 25 It certainly included representation from the 1 Executive; DOB, at that time, DOH; setting aside the 2 LICH issue, and really to try to look at this entire 3 situation in a more collaborative way. 4 So, we're banking on that collaboration being 5 receptive to the plan we've put on the table. 6 And we know, that's why this hearing, that 7 you are critical partners in that solution as well. 8 But, we don't know specifically what to 9 expect. 10 We've just conveyed the plan, and here we 11 are. 12 SENATOR PARKER: Okay, thank you. 13 As it relates to LICH, so, is -- it's still 14 the determination of the SUNY board to continue with 15 the closing of Long Island College Hospital? 16 H. CARL McCALL: The board's position is 17 that, at the present time, we have issued the RFI. 18 We have some solid expressions of interest. 19 We're going to pursue those vigorously, and 20 expeditiously. 21 And if, in fact, an operator can be found who 22 will take over that operation, then LICH will be 23 operated by that entity, and SUNY will be -- will 24 exit. 25 If, for some reason, that does not take 1 place, we still plan to exit, based on all of the 2 discussion we've had so far today about the 3 tremendous loss of revenue. 4 And the fact that, unless there is some 5 solution to that problem, the only way the hospital 6 can continue to function is if we were to draw money 7 away from the rest of SUNY. 8 And I think everybody's very clear about the 9 fact that we cannot do that. 10 SENATOR PARKER: What about Victory Hospital, 11 and how does it stand in the context of solvency and 12 this ongoing viability within the context of 13 University Hospital? 14 DR. JOHN WILLIAMS: Now, remember, we rent 15 that property, so we don't own it, but, we are 16 running a first-class operation that is growing 17 daily. 18 And we keep recruiting new physicians to 19 actually work at -- you keep calling it "Victory." 20 That's the old name. 21 SENATOR PARKER: I'm sorry. 22 The old -- I'm sorry. The former -- 23 DR. JOHN WILLIAMS: It threw me for a second. 24 SENATOR PARKER: I'm sorry. 25 DR. JOHN WILLIAMS: Yeah. 1 SENATOR PARKER: I've lived in Brooklyn a 2 long time. 3 DR. JOHN WILLIAMS: No, we continue to 4 operate that. 5 SENATOR PARKER: At Bay Ridge? 6 DR. JOHN WILLIAMS: Uh-hmm. 7 SENATOR PARKER: I guess I do have some 8 concerns about the numbers of people that we are 9 talking about laying off. 10 Do we have any sense about, you know, if this 11 plan goes forward at LICH, in addition to the 12 500 people at Brooklyn University Hospital, how many 13 at LICH are we also talking about eliminating? 14 DR. JOHN WILLIAMS: 1900. 15 SENATOR PARKER: So it's, like, 2100 -- 20 -- 16 yeah, 2400 people. 17 And -- but -- and I do -- I did hear 18 Chancellor Zimpher indicate that, you know, she's 19 hoping that the consortium, through -- and -- and 20 the expansion of private primary-care facilities. 21 Do we have a specific plan about how these 22 primary-care facilities are going to go about, and 23 who's gonna be the operators of these primary-care 24 facilities? 25 LORA LEFEBVRE: I don't know. Not within the 1 context of this plan. 2 But there has been -- you're gonna hear from 3 Dr. Wong, Grace Wong, later today, a Downstate 4 employee that has done extensive work on how people 5 use health-care services in Brooklyn, and where we 6 should be locating primary care. 7 And I know that every single one of the 8 hospitals in Brooklyn have been thinking about this. 9 And the other thing is, is that we have -- 10 you know, we have some really great FQHCs in 11 Brooklyn, that can be -- 12 SENATOR PARKER: I'm sorry, you -- 13 LORA LEFEBVRE: I'm sorry. 14 Federally Qualified Health Centers. 15 They're wonderful full-scale, multi-service, 16 federally qualified health centers that get special 17 reimbursement, and do a really good job in Brooklyn. 18 Lutheran has a great network, also with 19 FQHCs, that I think need to be brought to the table 20 for the primary-care discussion. 21 SENATOR PARKER: So it sounds like, and what 22 might be needed also, as we talk about this plan, 23 and filling out a consortium to help deal with 24 Brooklyn hospitals, is an epidemiological study of 25 Brooklyn? 1 Has someone done that, to figure out what 2 we're locating where? 3 DR. JOHN WILLIAMS: Yes. 4 The BHIP study, which you'll hear from 5 Grace Wong and Dorothy Fife about. 6 And, Brooklyn just completed a big community 7 study as well. 8 And, so, we're putting all of that together. 9 But, Grace and Dorothy are the experts, and I 10 can tell you -- 11 SENATOR PARKER: Is it possible for us to get 12 copies of those -- 13 DR. JOHN WILLIAMS: Certainly. 14 SENATOR PARKER: -- those studies, so we can 15 look at them? 16 Okay. Excellent. 17 Thank you very much. 18 SENATOR HANNON: Senator Adams? 19 SENATOR ADAMS: Thank you. 20 Earlier, we spoke about, you know, how did we 21 sort of got in this mess, you know, from the 22 beginning. 23 Dr. LaRosa, is he still with the hospital? 24 DR. JOHN WILLIAMS: He is not with the 25 hospital. 1 He's actually an emeritus professor now. 2 He's a tenured professor. 3 SENATOR ADAMS: Okay, help me with that. 4 DR. JOHN WILLIAMS: Oh. 5 There are a couple of different tracks in 6 academic medicine. 7 There's a tenured track and non-tenured 8 track. 9 And a tenured track means that, after you've 10 published a certain number of publications, you've 11 done a certain amount of research, administrative 12 and clinical, you are granted, essentially, a 13 parachute, if you will. And -- which means that you 14 have continuous employment. 15 And that's what he has. 16 H. CARL McCALL: Can I just ask: What 17 happens is, when we elect -- select a president of 18 an institution, that person serves under a contract 19 for a certain amount of time. 20 But most -- in most cases, the president of 21 an institution also has a tenured faculty position 22 in that institution. 23 And usually that means, when their presidency 24 ends, they can revert back to that tenured position. 25 And that is what has happened with 1 Dr. LaRosa, because that was part of his original 2 contract when he was hired. 3 SENATOR ADAMS: I just wanted to just take a 4 moment to talk about the public-benefit corporation 5 that you were describing. 6 What is different from the public-benefit 7 corporation of the three hospitals -- I think you 8 mentioned three hospitals? 9 DR. JOHN WILLIAMS: So far, yes. 10 SENATOR ADAMS: Right. 11 And 'cause we now -- Downstate has three 12 hospitals now that we're looking at -- that we're 13 dealing with. 14 We're dealing with LICH. 15 What is Victory called now? I know there's a 16 new name. 17 UNKNOWN MALE PANELIST: Bay Ridge. 18 SENATOR ADAMS: Bay Ridge. 19 What would be the difference between these 20 three hospitals coming together, and the new 21 public-benefit corporation that you're talking 22 about? 23 LORA LEFEBVRE: So -- so, basically, the 24 public-benefit corporation, again, won't run 25 hospitals. 1 What it will do is serve as a place for 2 private, not voluntary, hospitals, like those that 3 Skip has talked to, and our full complement of 4 clinical services at different sites, you know, 5 Bay Ridge, UHB, to come together, to try to -- to 6 start talking about: 7 What service lines they're all going to offer 8 together; 9 What faculty they're going to share. Maybe 10 use some of our faculty; 11 What medical students they'll take, to help 12 us educate medical students; 13 And what residents will work there. 14 So it really is more of -- more of the 15 convening place, for a business relationship to 16 develop amongst all of these parties. 17 SENATOR ADAMS: So each hospital would 18 maintain their independence status? 19 LORA LEFEBVRE: That is -- that is what we -- 20 when we make this proposal, that's how we saw it. 21 SENATOR ADAMS: I'm sorry, were you're gonna 22 add -- I'm sorry, I thought you added something. 23 The -- just to go back to what Senator Parker 24 was asking: Do you believe we need a hospital, and 25 to have the school? 1 What's the overall thought? 2 I'm just -- I'm sort of getting sort of mixed 3 feeling on that. 4 DR. JOHN WILLIAMS: Sure. 5 "Ideally" -- ideally, you want a hospital for 6 your trainees, that's yours; that you have complete 7 control over. 8 Ideally. 9 There are models out there. 10 Is that my preference? Absolutely. 11 Absolutely my preference. 12 I came from an institution where we sold our 13 hospital. 14 It worked, but, there are inherent 15 difficulties that you work with, and that you go 16 through. It's just another hoop that you have to 17 jump through. 18 There are hospitals, like Buffalo, like 19 Harvard, that have never owned a hospital. 20 It's a big difference than having a hospital 21 already and try to unwind from that. 22 And that's my personal opinion. 23 SENATOR ADAMS: So your personal opinion, you 24 believe that we do need the school with the 25 hospital, or we don't? 1 DR. JOHN WILLIAMS: Yes, I do. 2 SENATOR ADAMS: You believe we do? 3 DR. JOHN WILLIAMS: I do. 4 SENATOR ADAMS: But, Chair, is that the 5 position of SUNY? 6 Does, you know -- does SUNY believe we need 7 the school and the hospital? 8 H. CARL McCALL: SUNY believes, the board 9 believes, that we need the hospital to really 10 fulfill the mission of the medical school. 11 However, we do believe that we should not 12 have other hospital relationships that do not 13 support that. 14 That -- I mean, basically, we're an 15 educational institution. We're not a health-care 16 institution. We don't run -- we shouldn't be 17 running hospitals. 18 That's part of the discussion we've had about 19 LICH. 20 We've had University Hospital. It has this 21 integral relationship with the medical school, and 22 we hope that will continue. 23 It's continuation will depend upon funding. 24 If, in fact, as you -- in the very beginning, 25 we talked about options. 1 An option was, because of the financial 2 situation, that we should operate the medical school 3 and not have a hospital, and place medical students 4 in other places. 5 That's an option. 6 It's an option we would not like to exercise. 7 We prefer the option that we have. 8 SENATOR ADAMS: Over at LICH, the billing 9 system continues? Am I correct? 10 DR. JOHN WILLIAMS: Yes. 11 SENATOR ADAMS: It appears as though we're 12 paying a large sum of money to continue to do the 13 billing system. 14 Are we looking to somehow change that 15 relationship? 16 LORA LEFEBVRE: Well, I think -- I think what 17 we've been saying is, that we're looking to exit the 18 operation of -- hospital operations at LICH. 19 SENATOR ADAMS: I'm sorry? 20 LORA LEFEBVRE: We are looking to exit the 21 operation of a hospital at LICH. 22 So, I think that the billing issue resolves 23 itself. 24 SENATOR ADAMS: So -- and because I wanted 25 to -- I know, Chair, you stated about the -- looking 1 for someone to take over the operation at LICH. 2 Can you just sort of define that for me, when 3 you say "take over"? 4 H. CARL McCALL: Sure. 5 What has happened, Senator, is, at the urging 6 of many constituents and groups that we consulted 7 with, we were told about the value of LICH to that 8 community. 9 And there was suggestions that we should be 10 very aggressive in trying to find some other 11 operator, given the fact, I think there's been an 12 acceptance that this isn't an appropriate operation 13 for SUNY, because of the financial situation, and 14 because it isn't central to our mission. 15 And, therefore, an alternative would be to 16 find some other operator, who would come and become 17 the operator of the hospital, and that allows us to 18 exit. 19 And the building situation, and the other 20 issues, become, then, the responsibility of the new 21 operator. 22 So what we have is, maybe you weren't here in 23 the beginning, Lora Lefebvre pointed out that we 24 have from five to seven legitimate responses to our 25 RFI, and we're evaluating those responses; trying to 1 find out if these are qualified operators who could 2 do the job. 3 And if so, we will then go through a formal 4 procurement process, to see if we can reach an 5 agreement with that operator. 6 SENATOR ADAMS: So the goal is to have 7 someone take over the hospital, not to come to the 8 area and take over the land? 9 H. CARL McCALL: That would be part of a 10 negotiation with the operator. 11 Whether they -- for instance, they could 12 lease the property, and operate the hospital. 13 They could buy the property. 14 I mean, those are all possibilities that 15 would go forth in the negotiations. 16 And you will be apprized of those 17 negotiations; and, ultimately, we -- probably, we 18 might even need legislation to make this happen. 19 So, it's in the very formative stage right 20 now, but we're pursuing that as a goal. 21 SENATOR ADAMS: Because part of my -- part of 22 my -- the reason I'm asking, is that, whoever is 23 coming into the understanding that they're 24 purchasing, or taking over the hospital, I just -- 25 you know, I'm hoping that they're doing it with the 1 understanding that they've taken over a hospital. 2 That we -- you know, we would like to see a hospital 3 at LICH, and not condominiums at LICH. 4 H. CARL McCALL: No, no. This is not a 5 real-estate transaction. It's not about real 6 estate. 7 It's about operating a hospital. That is our 8 goal. 9 NANCY L. ZIMPHER: And in the RFI, it 10 specifies that there would be health-related 11 activities. 12 LORA LEFEBVRE: Yeah. 13 SENATOR ADAMS: See -- now, see, that's 14 interesting. 15 You know, I don't know if it's the cop in me, 16 but the "health-related" activity could be a 17 scaled-down version of a medical facility. 18 We're talking about a hospital. 19 [Applause.] 20 SENATOR ADAMS: I just -- you know, but is 21 that -- are we -- is that our goal? 22 H. CARL McCALL: Our goal is a hospital. 23 However, we have to look at the responses and 24 see if they make sense, and if we get what we want, 25 which is a hospital. 1 If not, then we don't have a hospital, 2 someone's not operating it, then as I said, we will 3 exit and go back to the closure plan. 4 But we'd like to find an operator who will 5 take over and provide hospital services. 6 SENATOR ADAMS: Just two final questions, 7 Chair, if you would allow me? 8 The -- we have five potential organizations 9 who are interested? Seven? 10 How many? 11 LORA LEFEBVRE: Yeah, we got seven responses. 12 SENATOR ADAMS: Seven. 13 And if you understand you correctly, we're 14 hemorrhaging money. 15 How long can we go through this process of, 16 you know, the seven -- finding, or narrowing it 17 down, the seven? 18 How much time do we have to make this happen? 19 LORA LEFEBVRE: Well, we're going have to go 20 through -- because we're, you know, a state entity, 21 we're going to have to go through a level of a 22 procurement process, and that does take some time. 23 We've got some flexibility to do that, but, 24 we'll -- I can't give you a specific time frame, but 25 it's not tomorrow. 1 SENATOR ADAMS: I'm sorry? 2 LORA LEFEBVRE: It's not tomorrow. 3 SENATOR ADAMS: Okay. 4 LORA LEFEBVRE: It takes a while. 5 And this is going be a complicated, you know, 6 transaction if it should come to be. 7 So it does take some time. 8 In the meantime, I think what we've said is, 9 we are losing a great deal of money there. 10 And what we need to do is, move as quickly as 11 we possibly can, and also exit operations there. 12 SENATOR ADAMS: And so the lights will remain 13 on as we go through this process? 14 And that includes -- we don't see any 15 potential layoffs, or any potential downsizing of 16 service, as we go through the process? 17 LORA LEFEBVRE: I think we're going through 18 the process. 19 I'm not sure that we have a very clear 20 response to -- you know, exact response to those 21 exact questions, because, we -- it is a process. 22 SENATOR ADAMS: Because I justed to -- the 23 reason I'm asking is, if this is going to take 24 several months -- 25 LORA LEFEBVRE: Yes. 1 SENATOR ADAMS: -- or a year, you know, I 2 don't see why, in the meantime, since we are 3 concerned about, you know, the revenue, why we don't 4 want to reexamine the relationship we have with 5 Continuum. 6 Because that's something I just continue to 7 hear -- 8 LORA LEFEBVRE: Yes. 9 SENATOR ADAMS: -- that Continuum is one of 10 the reasons that we're hemorrhaging large amounts of 11 money. 12 DR. JOHN WILLIAMS: We have been coming off 13 of their systems, one by one. 14 Again, this was a contract that was put in 15 place because the Continuum system could not talk to 16 the Downstate system. 17 And so they continued to operate, front 18 office and back office, but we have been peeling 19 off, as we put systems in, one by one. 20 SENATOR ADAMS: You know, Doctor, I'm just 21 really concerned about, you know, how we got in this 22 mess, and if people were held accountable for how we 23 got in this mess. 24 You know, I just -- you know, I think the 25 Chair raised that, you know, we went through almost 1 12 months of this problem, and all those 2 professionals we had there didn't realize that 3 something was wrong? 4 There's just something that's just not 5 sitting right with that, you know? 6 NANCY L. ZIMPHER: Senator, I think the 7 severity of the problem did engender a major 8 administrative-management turnover, that we got to 9 as fast as we could get it to once we understood the 10 hemorrhaging. 11 It was a difficult decision, but it was a 12 top-to-bottom exodus, over our concerns about 13 management. 14 So, we have plan, based on a set of 15 assumptions that didn't come to fruition. And our 16 actions as a result of that were pretty draconian. 17 But we agree; we didn't get to it as quickly 18 as we might have wanted to, but, it is what it is, 19 and we took the actions we did. 20 I think everybody at this table, and you as 21 well, know what we had to do. It was difficult, but 22 we did it. 23 So we're on a new trajectory now, and we're 24 trying our best to deliver for you. 25 SENATOR ADAMS: Just one last question: 1 The public-benefit corporation, if you could 2 just help me understand how it would interact with 3 the Brooklyn health-care improvement project. 4 You know, what type of relationship will it 5 have? 6 LORA LEFEBVRE: We would hope -- I mean, and, 7 again, you know, this public-benefit corporation has 8 yet to be developed or really detailed. 9 But, certainly, the PBC could definitely 10 benefit from all of the work that BHIP has done on 11 laying the groundwork for how people access 12 health-care in northeast Brooklyn, and what is 13 necessary. 14 So, I would expect that they would be major 15 inputters to the knowledge base of this new 16 public-benefit corporation. 17 SENATOR ADAMS: And, again, I want to, you 18 know, thank you for your service. 19 You know, the hospital, you know, sits in a 20 high-need community, I'm sure you all are aware. 21 And, you know, that brings a high level of 22 passion for those of us who represent the 23 communities who are impacted. 24 And, so, we want to be partners, to make sure 25 that, not only do we continue the quality of care, 1 but to ensure that we maintain a stability of 2 that -- that the hospitals provide, both LICH -- 3 LICH and Downstate provide for those communities 4 that they serve. 5 SENATOR MONTGOMERY: Thank you. 6 Good morning, Chairman, and Chancellor, and 7 Dr. Williams, and Lora. 8 Thank you. 9 I just have a couple questions that I would 10 like to ask. 11 You talk about the public-benefits 12 corporation, and the -- that you're now looking at 13 bringing in some of the other independent hospitals 14 and entities. 15 And my question is: Does that not require a 16 common language? 17 If this entity is going to be the thing that 18 helps with joint purchasing, and assigning, you 19 know, staffing, and so forth and so on, is it 20 necessary for you to -- for all of those entities to 21 develop a common language that perhaps does not now 22 exist, and how long will that take? 23 DR. JOHN WILLIAMS: Yes, ideally, it would. 24 I can't give you -- because we haven't really 25 talked about all of this with the other hospitals 1 yet. 2 But, ideally, systems would develop the same 3 IT system, the same language, as you're suggesting. 4 SENATOR MONTGOMERY: Yes. 5 DR. JOHN WILLIAMS: And that we would strive 6 to do that. 7 LORA LEFEBVRE: And, in fact, one of the 8 things that we point out is, that this new 9 public-benefit corporation would need exactly those 10 types of grants and State support to develop all of 11 those connections, because it is so very important. 12 SENATOR MONTGOMERY: So it would be the 13 entity that would actually develop this commonality 14 that would allow you to work -- 15 LORA LEFEBVRE: Either -- you know, either 16 develop or assist in development of. You know, at 17 least assist in the conversation. 18 SENATOR MONTGOMERY: Okay. 19 LORA LEFEBVRE: Certainly. 20 SENATOR MONTGOMERY: Because I've heard of 21 other attempts for this kind of collaboration, 22 integration, and it doesn't work, because there's no 23 common language. 24 So -- the other question I have: You 25 indicate that you're not actually developing the 1 language for the legislation for the public-benefits 2 corporation. 3 But, to what extent are you part of putting 4 forward the framework within which, whatever the 5 final legislation is, would reflect your needs? 6 LORA LEFEBVRE: So we hope that this plan 7 lays out that framework for those that would become 8 engaged in developing legislation. 9 I think -- we didn't get into a huge amount 10 of detail, but we did provide what we think to be a 11 constructive framework. 12 And we're certainly available to participate 13 in discussions on what we think, and how it would 14 work. 15 SENATOR MONTGOMERY: And does your, you know, 16 request, within the framework that you are putting 17 forward, include bonding? 18 Because you indicated that you thought it 19 would be important for you to be able to do that, 20 but, that's not something that necessarily will be 21 part of the corporation? 22 LORA LEFEBVRE: So, yeah -- so one of the 23 suggested roles that we -- we would have for 24 Brooklyn Health Improvement Public-Benefit 25 Corporation, is that it become a vehicle for capital 1 formation, and potentially issuance of debt. 2 SENATOR MONTGOMERY: Which would require -- 3 would allow them to do bonding -- 4 LORA LEFEBVRE: Yeah, that's it. 5 SENATOR MONTGOMERY: -- themselves. 6 But, yet, we don't know if that's going to be 7 part of the final legislation? 8 LORA LEFEBVRE: No, because, you know, I 9 think we're sensitive to -- I'm sensitive, or we're 10 sensitive, to the fact that, you know, we're asking 11 for government to create another governmental agency 12 to do the work that hasn't been able to get done in 13 Brooklyn. 14 And, I know that there's sensitivity to debt 15 issuance also. 16 So -- but I also think that we do know one 17 thing: We knew -- we know Brooklyn is 18 undercapitalized. And we can see that the private 19 credit markets aren't rushing in to provide capital, 20 to rebuild health care in Brooklyn. 21 So, we're suggesting that this could be a 22 potential vehicle, understanding that there may be 23 sensitivities. 24 SENATOR MONTGOMERY: And would the 25 public-benefit corporation be part of the billing 1 issue, or, does that still remain an independent 2 function? 3 DR. JOHN WILLIAMS: It remains independent. 4 SENATOR MONTGOMERY: For each entity? 5 DR. JOHN WILLIAMS: Yes. 6 SENATOR MONTGOMERY: Now, the 7 Brooklyn Hospital is now working with, well, at 8 least Interfaith. I'm not sure what other hospital 9 may be involved, but certainly Interfaith, which I 10 believe has an MOU. 11 Does that mean then, that when you're talking 12 at Brooklyn Hospital, you're looking also at 13 Interfaith as part of that entity? 14 DR. JOHN WILLIAMS: If Interfaith and 15 Brooklyn do merge and come together, yes, we will be 16 talking to that entire entity. 17 SENATOR MONTGOMERY: So you're talking to 18 two, as opposed to one. 19 Now, I see that part of the integrated 20 network consortium includes community-based 21 primary-care organizations. 22 And, obviously, there's a number of them that 23 I represent, and that are extremely important in 24 terms of the whole issue of primary care, especially 25 for the populations that we're trying to look at. 1 The -- how do they -- how are they secured -- 2 their participation secured within the context of 3 this new network? 4 How do you anticipate? 5 Because they're not a hospital, so they can't 6 compete in the same way. 7 So -- 8 DR. JOHN WILLIAMS: No, uhm, actually, we 9 would like to recruit as many as we possibly can. 10 And, including, adding more. 11 So, they become pivotal to anything that we 12 do, because as I said, with the Affordable Care Act, 13 hospitals are going to be paid less and less, and 14 you're going to see hospitals all over this country 15 shrink as a result, because the emphasis is going to 16 be on wellness, and it's going to be on outpatient 17 services more than it is an inpatient. 18 And so they become a critical and vital part 19 of anything that we do. 20 SENATOR MONTGOMERY: So that -- as they say, 21 you know, in the neighborhood, "talk is cheap." 22 So my question is: What kind of 23 relationships are you looking at, in terms of what 24 you do that helps to sustain them and builds a 25 partnership, as opposed to just an appendage -- 1 DR. JOHN WILLIAMS: Sure, sure. 2 SENATOR MONTGOMERY: -- group of -- 3 DR. JOHN WILLIAMS: Well, one of the biggest 4 things is, we have residents and we have students. 5 SENATOR MONTGOMERY: Okay. 6 DR. JOHN WILLIAMS: And most health-care 7 entities would love to have residents and students 8 working in their facility. 9 And so we would have those kinds of 10 relationships, affiliation agreements, just like we 11 do with several right now -- 12 SENATOR MONTGOMERY: Okay. 13 DR. JOHN WILLIAMS: -- where students would 14 rotate through, residents would rotate through. 15 And the advantage of that is, now you can 16 begin to expand your hours, and you begin to open up 17 areas in the schedule that you couldn't open before. 18 SENATOR MONTGOMERY: Okay, okay. 19 And there's one circle that's missing on 20 here, and, I'm not sure. 21 I see SUNY colleges and schools, but I don't 22 see school-based health clinics. 23 So -- so I know that's -- you know, it's sort 24 of like a nuanced issue. 25 It's not for me, but maybe it is. 1 And it always seems to drop off of the 2 presentation. 3 So -- and that's how we can provide this 4 primary care for hundreds and hundreds of young 5 people who are going to be missed in the system. 6 No matter how wonderful it seems to be, it 7 misses young people. 8 DR. JOHN WILLIAMS: Well, Downstate, through 9 our Department of Family Medicine, as well as 10 internal medicine, I think the number is eleven, but 11 don't quote me, school-based programs that we 12 participate in right now. 13 SENATOR MONTGOMERY: Okay. 14 DR. JOHN WILLIAMS: And as we bring on more 15 primary-care staff, that, obviously, because you're 16 correct, that's the way. 17 And it's not only the kids, because that's 18 how you can capture mom and dad and grandma, as they 19 bring the kids to school, and so forth, and 20 advertise services as well. 21 So, no, it's a critical part. 22 SENATOR MONTGOMERY: Okay. Thank you. 23 And just, lastly: As you know, this -- 24 obviously, Downstate is of tremendous significance 25 to us. It's where we actually get our doctors. 1 And a large part of my district, there's just 2 not health providers independent of the clinics or 3 the hospitals. 4 So, we're looking forward to strengthening 5 your capacity, building a larger capacity, to 6 provide for us a larger number of health providers. 7 So, thank you. 8 DR. JOHN WILLIAMS: Thank you. 9 SENATOR LAVALLE: Senator Rivera? 10 SENATOR RIVERA: Thank you, Senator LaValle. 11 Hello, folks. 12 So, some of the questions, actually, I have a 13 little bit more clarity, based on all of the 14 back-and-forth with a couple of my colleagues, 15 because I particularly want to focus on the 16 public-benefit-corporation aspect of this thing. 17 First of all, you kind of answered my 18 question when you said you -- there are other -- I 19 should back up for a second. 20 Obviously, you have gone through a process of 21 figuring out how to resolve the issue at hand; 22 right? 23 So you said: What -- let's figure out, and 24 let's throw some of the things on the wall and see 25 what sticks. 1 And ultimately what you came up with is that, 2 number one, you can't survive by yourself; right? 3 With the -- the LICH thing is completely, 4 we'll leave that aside for the moment, but we said 5 that you, as an entity, can't survived by yourself, 6 so you have to enter into some sort of coalition 7 with these other hospitals. And you made very good 8 sense on what this would mean. 9 There's a lot of -- if all of you as a 10 consortium, as you described it, you negotiate on 11 behalf of this consortium, as opposed to one 12 hospital, you get things keep cheaper, et cetera. 13 There's -- and you figure out the things that 14 some hospitals provide that others cannot, or that 15 do so at a lower level, so you can say, Well, let's 16 just shift it to here, et cetera. 17 So, I can understand how that happens. 18 And -- but you did come to a conclusion that 19 this is not something that could happen with the -- 20 without the creation of a separate entity to be able 21 to run it; right? 22 And so your suggestion is, that the 23 public-benefit corporation be, for all intents and 24 purposes, a smaller subagency, if you will, that 25 then will run the administrative aspects of this 1 consortium. 2 Am I mistaken? 3 Because I saw the Chancellor -- 4 NANCY L. ZIMPHER: Just to clarify how that's 5 run: The conversation of the network, and how 6 planning proceeds, would need to be administered, 7 but the hospital would continue. All of the 8 hospitals would manage themselves. 9 So "management" is only management of this 10 integrated plan. 11 SENATOR RIVERA: Thank you for the 12 clarification, ma'am. 13 And, Chancellor, and that's exactly what I 14 wanted to clarify. 15 We're not talking about the administration of 16 each hospital in their individual capacity, but we 17 are talking about the administration of the 18 consortium, the entity, that would kind of figure 19 all these different things out. 20 So, there's a -- the menu here of -- on 21 Slide Number 9, right, you say, like, the 22 corporation will not operate hospitals, but it will 23 be, or more likely could be; right? 24 Because what you're saying, your suggestion, 25 this is the skeleton, if you will, you're saying, 1 this is what we think should be happening. 2 And there's a couple of things here. 3 So, "The vehicle for public input into health 4 needs," quote/unquote. 5 How so? 6 And this is, in particular, referring to -- 7 just echoing some of the concerns of my colleagues, 8 and saying that, entities, like the MTA, or the -- 9 or any of the other public authorities of whom I'll 10 be speaking of, there is a -- there has been a lack 11 of transparency in a lot of their operations. 12 So, how do you envision this public health -- 13 this public-benefit corporation not having that 14 problem? 15 LORA LEFEBVRE: Well -- and because they're 16 not going be running anything, and they're, 17 basically, going to be trying to plan what's best 18 for that part of Brooklyn, I would imagine that they 19 would be dragging people in, to talk to them about 20 where they think the health-care needs are, and what 21 would be the best way to address health, you know, 22 disparities in Brooklyn. 23 There are certainly ways of achieving it 24 through the governance of a public-benefit 25 corporation. 1 That's not something we've recommended here. 2 That's one way of doing it. 3 It's also -- another way of achieving it, is 4 to put it in the public-beneficiary -- 5 public-benefit corporation's scope of -- you know, 6 mandate. 7 A legislative mandate: You must consult, you 8 know, with public -- you know, I don't know. 9 You can think of ways of, actually, really 10 demanding that this organization seek public input. 11 SENATOR RIVERA: "A vehicle for capital 12 formation (not contemplated at this time, but may be 13 a goal in the future)." 14 So that is some of the -- what we referred to 15 earlier as the capacity that the potential -- 16 LORA LEFEBVRE: It's a potential. 17 SENATOR RIVERA: -- for them to be able to 18 issue debt; and, therefore -- 19 LORA LEFEBVRE: Sure. 20 SENATOR RIVERA: Okay. 21 So, it seems to me, obviously, that we're -- 22 I mean, I have -- we have four different folks up 23 here from four different -- from four different 24 entities. 25 And we're -- I mean, this is a tax-and-spend 1 liberal here, right, so I don't necessarily think 2 that government is a bad thing, obviously, but 3 the -- we're creating another level of bureaucracy 4 it seems. 5 LORA LEFEBVRE: Yes. 6 SENATOR RIVERA: And -- but, again, based on 7 your study of the situation, it is necessary? 8 That's at least your contention? 9 UNKNOWN MALE PANELIST: Right. 10 SENATOR RIVERA: All right. 11 I am certainly concerned by the precedent 12 that this would establish, because we're saying that 13 there is a possibility, even though, as the 14 Chancellor made clear earlier, that it is not a 15 "one size fits all" type of formula, that each 16 different institution and entity might, you know, 17 need a different sort of thing, it does create a 18 precedent, because this is not something that has 19 existed before in the state of New York; correct? 20 Okay. 21 So I just want to make sure that we're on the 22 record, that it could establish precedent, and some 23 of the concerns that we have that have been 24 expressed a lot by my colleagues, you know, are 25 still concerning. 1 Pardon the oxymoron. 2 Lastly, this -- so this solution, this 3 proposal, the skeleton, if you will, it is -- the 4 folks that developed this -- 5 Obviously, four of you are here because you 6 are accountable for what your -- the staffs do, and 7 you feel that this is the strongest thing that you 8 could put forward. 9 -- but the folks that prepared this, are they 10 the same folks, or do they -- are they among them, 11 or are they the same folks that, a couple of years 12 ago, told us that -- that getting LICH would 13 actually rescue the organization? 14 I just -- I just want to make sure that -- 15 [Applause.] 16 H. CARL McCALL: Good question. 17 SENATOR RIVERA: -- because I think it's -- 18 you know, I'll just -- 19 I think it's clear what I mean by this. 20 H. CARL McCALL: No. 21 SENATOR RIVERA: No? 22 H. CARL McCALL: These are not the same 23 folks. 24 SENATOR RIVERA: Not the same folks? 25 DR. JOHN WILLIAMS: Not the same folks. 1 SENATOR RIVERA: So what was happening over 2 there, as you admitted here on the record, they were 3 wrong assumptions. They were, like -- there was big 4 whoops, what have you. 5 This is -- the folks that put this together, 6 and that suggested this is the way to go forward to 7 make sure that we rescue the institution, both as a 8 service provider and as an academic institution, not 9 the same folks that messed up the last one? 10 DR. JOHN WILLIAMS: Absolutely not. 11 SENATOR RIVERA: All right. 12 Thank you so much, Mr. Chairman. 13 SENATOR LAVALLE: At this point, I want to 14 thank you. 15 Thank you very -- 16 I hear no other questions, so, thank you for 17 your help. 18 Thank you for being here, and for your 19 answers. 20 Thank you. 21 NANCY L. ZIMPHER: Well, thank you. It was a 22 great opportunity. 23 Got a lot of things on the table. 24 SENATOR HANNON: It was a unique discussion, 25 a unique presentation. Well worth it. 1 We'll be [inaudible]. 2 NANCY L. ZIMPHER: Thank you, Senators. 3 H. CARL McCALL: Thank you very much. 4 SENATOR LAVALLE: The next, James Clancy, 5 who's the assistant commissioner of the 6 New York State Health Department. 7 I would also, just for housekeeping, we're 8 going to go to about 1:00, and we're going to take 9 half-an-hour break at 1:00. 10 That means at, 1:30, we will resume the 11 hearing. We have lots of other people to hear from. 12 Mr. Clancy, I, first, want to thank you for 13 your public service, things that you do. The help 14 that you render to each and every one of us. 15 So I want to thank you before you testify. 16 JAMES CLANCY: Thank you, Senator. 17 SENATOR LAVALLE: Jim Clancy. 18 JAMES CLANCY: Thank you. 19 Well, good morning, Senators Hannon and 20 LaValle, Senator Stavisky, Senator Adams, and the 21 rest of the members that have been here, and will 22 return or come back. 23 My name is Jim Clancy. I am the assistant 24 commissioner for governmental affairs for -- 25 SENATOR LAVALLE: Jim, you want to move the 1 microphone up. 2 JAMES CLANCY: Sure. 3 Better? 4 SENATOR HANNON: Yes. 5 SENATOR LAVALLE: Yeah. Thank you. 6 JAMES CLANCY: I'll start over. 7 Good morning, Senators Hannon and LaValle, 8 Senator Stavisky, Senator Adams, members that were 9 here, members that will come back. 10 My name is Jim Clancy, and I am the assistant 11 commissioner for governmental and external affairs 12 for the New York State Department of Health. 13 Let me begin by first passing along 14 Dr. Shah's regrets for not being available to 15 appear before you today. 16 Unfortunately, he had a previously scheduled 17 meeting with the new director of the Centers for 18 Medicaid -- sorry, Medicare and Medicaid Services in 19 Washington, D.C. 20 He's there to advocate for the initiatives 21 imperative to all New Yorkers; specifically, 22 impressing upon our federal representatives the 23 importance of reinvesting a significant amount of 24 federal dollars back into New York's health-care 25 system. 1 One of the major challenges Dr. Shah 2 confronted was dealing with the complex problems 3 facing the Brooklyn health-care delivery system. 4 Because of this, Governor Cuomo directed the 5 Commissioner to create the Brooklyn MRT Health 6 Redesign -- sorry, Health-Systems Redesign 7 Workgroup. 8 While the focus and charge of the workgroup 9 was to make recommendations that would lead to a 10 high-quality, financially secure, and sustainable 11 health-care system in Brooklyn, it was hoped that 12 this would also be a template for responding to the 13 needs of distressed health-care providers and unmet 14 health-care needs throughout the state. 15 The workgroup, led by Stephen Berger, issued 16 a report titled "At the Brink of Transformation: 17 Restructuring the Healthcare Delivery System in 18 Brooklyn." 19 That report identified specific challenges 20 facing the Brooklyn health-care delivery system. 21 Some of them being: 22 Brooklyn's daunting population health 23 challenges, particularly the high rates of chronic 24 disease; 25 Brooklyn hospitals compete for market share 1 amongst themselves; 2 And a significant percentage of Brooklyn 3 patients seek their medical services in Manhattan; 4 And Brooklyn residents are not using 5 appropriate, effective, and less-costly primary 6 care. 7 Again, these are just a few examples of the 8 challenges facing the Brooklyn health-care delivery 9 system. 10 The major recommendation made by the 11 workgroup, was that Brooklyn health-care providers 12 must create integrated systems of care and 13 service-delivery models, including hospitals, 14 physicians, FQHCs, nursing homes, behavioral health 15 providers, and other such entities. 16 Bottom line, the Brooklyn health-care 17 delivery system must look within itself. 18 Individual facilities must find relationships 19 and collaborations that help fortify their existence 20 and create sustainable a system for their 21 communities. 22 In addition to the Brooklyn MRT 23 Health-Systems Redesign Workgroup report, several 24 others have assessed -- excuse me, several other 25 reports have assessed the Brooklyn health-care 1 delivery system and identified its strength and 2 weaknesses. 3 These other reports are: 4 The Community Health Care Association of 5 New York State's report, "A Plan for Expanding 6 Sustainable Community Health Centers in New York"; 7 The Brooklyn Health Improvement Plan; 8 And the Navigant report, "The Brooklyn 9 Hospital Center: Keeping Brooklyn Healthy." 10 All four reports agree that increased 11 primary-care access is vital in reducing unnecessary 12 emergency room visits and inappropriate hospital 13 admissions, and ensuring that Brooklyn residents are 14 using the most appropriate preventive and least 15 costly care available. 16 High rates of non-emergency or preventable 17 emergency room visits suggest that accessible 18 primary and preventive care is lacking in Brooklyn. 19 Prevention-quality indicators, or, "PQIs," 20 are measures the department uses to identify 21 potentially avoidable hospitalizations for 22 ambulatory-care sensitive conditions. 23 These indicators are intended to reflect 24 issues of access to, and quality of, ambulatory care 25 in given geographic areas. 1 High rates of non-emergency or preventable 2 emergency room use, together with PQI 3 hospitalizations, suggests a significant portion of 4 hospital care in Brooklyn could more appropriately 5 be delivered in the community if access to 6 high-quality primary-care services were improved. 7 And, of course, this must all happen without 8 an excessive reliance on State dollars. 9 As you know, the State is no longer in the 10 position of having federally authorized investment 11 dollars to help support failing, struggling, excuse 12 me, facilities. 13 We must make strategic decisions about where 14 to best spend limited funds in order to ensure 15 financially stable and sustainable systems. 16 Previously, one of the best tools we have had 17 to help struggling facilities was the HEAL New York 18 program. But again, as you know, the federal 19 matching State dollars in this program ends 20 March 2014. 21 Governor Cuomo directed the department to 22 reserve $150 million from HEAL New York 21 to 23 support additional efforts to improve the 24 health-care delivery system in Brooklyn. 25 We continue to work with several health 1 systems in Brooklyn to restructure and transform 2 both inpatient- and outpatient-service delivery. 3 But let me be direct: This money is intended 4 to be used in situations where it is clear that 5 strong, viable, and sustainable health-care delivery 6 systems will result from the investment. 7 We look forward to continuing discussions 8 with you, our partners in the Legislature, to create 9 new tools to assist in strengthening the health-care 10 delivery system in Brooklyn, and other communities 11 throughout the state. 12 One such tool was part of Governor Cuomo's 13 Executive budget: "Capital Access," or, 14 private-equity pilot program. 15 This initiative would have allow for two 16 pilot programs, one in Brooklyn, and another 17 elsewhere in the state, through which business 18 corporations with access to investor capital and 19 expanded debt-financing opportunities would have 20 been formed to operate hospitals. 21 While we acknowledge the uniqueness of this 22 initiative, please understand it was made with the 23 intent of creating financial opportunities and 24 potential investment where there currently is very 25 little. 1 Reliance on State dollars is simply no longer 2 a viable and lasting solution. 3 Another policy initiative put forward by the 4 Governor in this previous budget would have provided 5 the department with the authority to oversee retail, 6 or, "convenience," clinics. 7 These entities are reality, and are actually 8 already opening throughout the state. 9 Recently, in the retail industry's boldest 10 push yet into an area long controlled by physicians, 11 chain pharmacy announced plans to expand medical 12 services at more than 300 clinics across the 13 country. 14 This move puts the chain in a potentially 15 lucrative business of treating customers with 16 long-term medical problems: diabetes, asthma, 17 high cholesterol. 18 Pharmacy officials have stated their 19 intentions to have nurse practitioners and physician 20 assistants at their clinics to do tests, make 21 diagnoses, as well as write prescriptions, refer 22 patients for additional tests, and help manage their 23 conditions. 24 This is evidence that retail clinics are here 25 to stay, and likely to be expanding. 1 We need to have the ability of controlling 2 what services they provide, to whom they provide 3 them, and hold them to the same standards of quality 4 as other health-care facilities. 5 They can, and will, be another frontline 6 defense in our efforts to bolster primary-care 7 access. 8 On a personal note, I want to take the time 9 to thank Senator Hannon for partnering with us, to 10 support the Temporary Operator Initiative, which was 11 enacted as part of this year's budget. 12 While this new authority will not help us or 13 SUNY with the current situation at Downstate Medical 14 Center, it is our belief this initiative will help 15 us prevent, or at very least, mitigate, further 16 hospital closures throughout New York. 17 As you are aware, the enacted budget 18 contained language calling on Chancellor Zimpher to 19 submit to the Governor and the Legislature a 20 sustainability plan for the continuing viability of 21 Downstate Medical Center. 22 The Commissioner and budget director have 23 begun the process of reviewing the challenges, 24 needs, and recommendations outlined in the plan. 25 We look forward to working with you, to find 1 the best solution for the residents of Brooklyn, and 2 all New Yorkers. 3 Thank you. 4 SENATOR HANNON: Thank you. 5 Thank you very much, Mr. Clancy. 6 Appreciate your coming. 7 The wagon that [unintelligible], are you 8 going to approve the plan the Commissioner -- the 9 Chancellor just presented? 10 JAMES CLANCY: I'm sorry? 11 SENATOR HANNON: Will you approve the plan 12 the Chancellor just presented? 13 JAMES CLANCY: Will I approve the plan? 14 Well, we plan on having an answer for that, I 15 believe the deadline for that will be June 15th. 16 I just want to say on the onset of any 17 questions that come my way, I think that, most, if 18 not every question that was asked by this panel 19 today, are certainly questions that the Commissioner 20 and the budget director, as well as other members of 21 the administration, are going to have for this -- 22 for SUNY and the staff and the Chancellor. 23 SENATOR HANNON: I just think I want to note 24 for the record, that the Brooklyn hospitals, while 25 having been identified in any number of studies as 1 being in poor shape for delivery of good 2 health care, are not the only hospitals in this 3 state that are in financial distress. 4 We've seen a hospital close in Far Rockaway 5 within the year. We've seen a couple of hospitals 6 within the past month close upstate. There are 7 others that are being taken over because they're 8 financially insolvent. 9 So, the problem that confronts the state, in 10 terms of health care for all of its citizens, is not 11 just confined to one borough. 12 And the second point I want to make is, that 13 the MRT report, in regard to Brooklyn, did not 14 identify either LICH or Downstate Medical as 15 hospitals that were in trouble. 16 There were other hospitals that were the 17 total focus of that MRT report, so that there's 18 still is in existence, lots of other problems in 19 Brooklyn that need to be addressed. 20 And I presume, as you look through this 21 proposal by the SUNY, you're gonna have those in 22 mind also. 23 JAMES CLANCY: I think that's an excellent 24 point to the first part of the question -- or, the 25 statement that you made, Senator. 1 I sat in this very chair yesterday, with 2 colleagues of yours that represent rural districts, 3 to have a roundtable discussion on the challenges 4 facing rural hospitals. 5 So, this is a -- each situation is a unique 6 situation for that community, but it is not a unique 7 situation for what we face here at the State, and of 8 its hard decisions, and the consultations and 9 conversations that have to have with these 10 facilities, and the communities, because at the end 11 of the day, what we need to do is, ensure that the 12 communities have the access to the care that they 13 need, they deserve, and that they'll use. 14 SENATOR HANNON: One other thing would be, 15 would you just elaborate a little bit on 16 Commissioner Shah's mission, and what really is 17 behind that, in terms of the application for a 18 waiver from the federal government. 19 And, as the Governor has recently put 20 forward, how those monies would be used, especially 21 in the situation we're discussing today. 22 JAMES CLANCY: Yes, so -- thank you for that 23 question, Senator. 24 Again, not knowing the specific conversations 25 that are happening right now, but I know the mission 1 was to get down, make a personal representation -- I 2 don't want to use the word "plea" -- but certainly a 3 personal representation of what the waiver dollars 4 would mean to New York State. 5 I think also part of that, and we discussed 6 earlier, I think was part of some of the questions 7 that some of the Senators may have had, were the VAP 8 applications. 9 I think that's also part of the conversation 10 that's happening. 11 SENATOR HANNON: Explain what that is. 12 JAMES CLANCY: So "VAP" is "vital-access 13 provider "money that was put aside from -- that -- 14 that we had from one of the recent HEALs, to go to 15 facilities that are considered vital-access 16 providers. 17 Part of the process, though, for us getting 18 the money out, because there was a federal match, we 19 need the federal government to agree with our 20 methodologies and our definitions. 21 We are currently, right now, waiting for that 22 approval back from CMS. 23 So, again, part of the Commissioner's mission 24 today, is to get down to D.C. and impress upon them 25 the need for decisions -- swift decisions, and 1 reinvestments. 2 SENATOR HANNON: Let me go over just a couple 3 of things that people are always asking, as to why 4 the State just can't support the hospitals; and, 5 that is, the basic revenue stream for any hospital. 6 You have money that comes from insurance: 7 health-care plans, HMOs; 8 You have money that comes from Medicare; 9 You have money that comes from Medicaid. 10 And in each of those three instances, those 11 are payment for services according to a rate fixed. 12 Sometimes it may be a global rate, so that 13 you're taking care of the entire person for a given 14 amount of money. 15 But, those are not discretionary. 16 They are -- at some point during the course 17 of the fiscal year, they're established, by the 18 federal government, by the state government, by the 19 insurance company. 20 So they -- and that makes up, probably, 21 99 percent of the money that comes to any given 22 hospital. 23 And then you had made mention of a couple of 24 other things. 25 The HEAL grant, those were all financed 1 through a major bond issue of the state, and, 2 there's 22 different series of grants. There may 3 even be more. 4 JAMES CLANCY: I think 21 -- I think the last 5 one we just had was HEAL New York 21. 6 SENATOR HANNON: "21"? 7 JAMES CLANCY: So, yes. 8 SENATOR HANNON: But those were a series for 9 specific purposes: information-technology 10 improvement, structural rebuilding. 11 JAMES CLANCY: Correct. 12 SENATOR HANNON: Sometimes they were for a 13 specific project. 14 JAMES CLANCY: Nursing homes. 15 SENATOR HANNON: Nursing homes. 16 JAMES CLANCY: Sure. 17 SENATOR HANNON: And then you made mention of 18 a couple of the other things. 19 We have the Vital Access Provider program, 20 which is a way of getting some matching money from 21 the federal government if we put money up. But 22 that's limited, it has four corners to it, and is 23 usually only for innovative projects, not 24 necessarily for the general operation of a hospital. 25 JAMES CLANCY: Correct. 1 SENATOR HANNON: And after that, what all our 2 hopes are based on, is whether or not the state will 3 be given a grant, in a sense it's a grant, by the 4 federal government. And it's called "a waiver," but 5 we get money through a grant [unintelligible], 6 through the application to CMS at the current time. 7 JAMES CLANCY: Correct. 8 SENATOR HANNON: Now, it's unprecedented, 9 because Argon's received a $4 billion grant. 10 California has regularly received a great deal of 11 money in regard to its hospitals. 12 So, New York is asking for a portion of the 13 savings we've been -- we've put into place. And 14 what we save of a Medicaid dollar for 15 New York State, we've saved that same dollar for the 16 federal government, since, roughly, there's a 17 matching amount of money, federal and state. 18 And we've also saved money if we saved the 19 Medicare program. 20 So, we're asking for some of the money back 21 that we put into place in savings. 22 JAMES CLANCY: And then, ideally, that 23 reinvestment will create more savings, and then the 24 ball will continue to roll down, that we will -- 25 SENATOR HANNON: But taking the level -- the 1 different revenue streams have played out, there is 2 no other revenue stream. 3 JAMES CLANCY: Currently, as I sit here 4 before you, there is not, which is why we asked, in 5 our conversations with other facilities, and as you 6 said, the other challenges throughout the state, is 7 we really need to take a look at the services that 8 are being provided, that the services that the 9 community is accessing, and make sure that they 10 match. 11 SENATOR HANNON: Okay, well, I just wanted to 12 put that on the record -- 13 JAMES CLANCY: Great. 14 SENATOR HANNON: -- as we confront these 15 problems. 16 JAMES CLANCY: Thank you, Senator. 17 SENATOR LAVALLE: Jim, if the Commissioner 18 could, next week, spend some time with 19 Senator Hannon and myself, to go through, in greater 20 detail, we'll all have greater sight, given the 21 testimony today, and the questions, and so forth. 22 JAMES CLANCY: We will make that happen. 23 SENATOR LAVALLE: But, my -- my question is, 24 that the Berger Commission gave Brooklyn a road map. 25 And did Brooklyn implement recommendations 1 that Berger gave? 2 And if not, couldn't the Health Department 3 weigh in? 4 JAMES CLANCY: So I think one of the 5 important aspects about the Brooklyn MRT, was that, 6 as opposed to the previous Berger recommendations 7 that had been made several years earlier, this was 8 not necessarily the plan of, you know, A needs to be 9 with B, C needs to be with D. 10 This was an assessment of the needs of 11 Brooklyn, and, the encouragement for the facilities 12 to come together, see the needs of their 13 communities, work to find out what services that 14 they could meld in with the another facility. 15 So we didn't want to be very prescriptive. 16 I think we need to be very clear about that, 17 because of the concerns that happened from the 18 previous Berger. 19 I mean, I was personally part of the 20 hearings, and the first hearing that we had for the 21 Brooklyn MRT, the concern, the questions, and 22 certainly understood the valid -- the validity of 23 the questions, was, "Please, don't close my 24 hospital." 25 And, that was not the intention of those 1 hearings, of the information gathering. 2 It was to really find out what was going on 3 in Brooklyn, and what could be like collaborations. 4 SENATOR LAVALLE: Well, that might be so, but 5 the other piece in this are the HEAL grants -- 6 JAMES CLANCY: Yes. 7 SENATOR LAVALLE: -- and the investments that 8 we have made. 9 Now, I have had, and I think you were in on a 10 conversation I had with Dr. Shah, and dealing with 11 the eastern Long Island -- 12 JAMES CLANCY: Correct. 13 SENATOR LAVALLE: -- where, under Berger, we 14 actually had a plan. We said, We're going to bring 15 these hospitals together. 16 And then we said, Give us some HEAL grant 17 money. 18 And you did. 19 JAMES CLANCY: Yep. 20 SENATOR LAVALLE: So the thing comes 21 together. 22 What happened in Brooklyn? 23 JAMES CLANCY: Well, that's still out there. 24 I mean, as I said in my testimony, there's a 25 hundred -- the Governor directed $150 million. 1 So, we are still having conversations. 2 But those are the questions, and those are 3 the types of things we need to see, before that 4 money is going to go out the door. 5 SENATOR LAVALLE: Okay. 6 JAMES CLANCY: So, decisions haven't been 7 made yet. 8 We're still trying to make sure that, and 9 it's the right decision, for not just today, but 10 that it's going create a sustainable, viable 11 network, or hospital, or entity, moving forward. 12 SENATOR LAVALLE: Yeah, because 13 Senator Hannon's first question was in terms of, the 14 Health Department's role, with SUNY, and how 15 prescriptive, and how much involved will you be? 16 Because, you heard the testimony from 17 Skip Williams about at least two decades, about 18 Brooklyn, and things went by, and everybody said, 19 "Oh, okay. Everything's okay." -- when it wasn't 20 okay. 21 And then, with LICH, a period of time goes 22 by, "Everything's okay." -- but it's not okay. 23 So I think we have an opportunity to get it 24 right this time. 25 And I think the people in the borough of 1 Brooklyn expects us to get it right. 2 JAMES CLANCY: Well, I expect very similar, 3 if not identical questions that were asked today of 4 SUNY, are going to be continued to be asked, and 5 we're going to need to dig down. 6 SENATOR STAVISKY: Let me just -- let me also 7 thank you for your service. 8 JAMES CLANCY: Thank you, Senator. 9 SENATOR STAVISKY: It's illustrious, and it's 10 appreciated. 11 JAMES CLANCY: Thank you. 12 SENATOR STAVISKY: Great to see you again. 13 SENATOR LAVALLE: Questions? 14 Yes. 15 Yes, Senator Montgomery. 16 JAMES CLANCY: Hi, Senator Montgomery. How 17 are you? 18 SENATOR MONTGOMERY: Good, thank you. It's 19 good to see you, Commissioner. 20 JAMES CLANCY: You too. 21 SENATOR MONTGOMERY: I just -- the whole 22 issue of -- it was my understanding that we didn't 23 receive -- there was 1 million in the HEAL grant 24 that was allocated -- actually allocated for the 25 purpose of Brooklyn Hospital, and that piece of the 1 restructuring. 2 JAMES CLANCY: Okay? 3 SENATOR MONTGOMERY: And you mentioned 4 150 million -- 5 JAMES CLANCY: Correct. 6 SENATOR MONTGOMERY: -- that you still are 7 holding on to. 8 JAMES CLANCY: Yes. 9 SENATOR MONTGOMERY: So how do you make -- 10 what kinds of -- what goes into your making a 11 decision to -- to actually allocate the funding that 12 is needed in order for us to move to the next phase, 13 both in terms of the SUNY situation, as well as the 14 Brooklyn Hospital piece? 15 JAMES CLANCY: Sure. 16 And there's no one facility. There -- this 17 is a Brooklyn-wide open discussion that we're having 18 with the facilities. 19 And, again, what we're hoping to see happen 20 here, is that relationships occur between 21 facilities, or, there is a changing of the business 22 model of a facility, to, again, meet and match the 23 needs and the usage of the community, and what the 24 community's needs are. 25 I say that, and I've kind of said that a few 1 times, because at the end of day, hospitals close, 2 and facilities close, because people stop using 3 them, and they stop going there. 4 So we need to ensure that any State 5 investment is going to be into a facility that are 6 going to provide the services, and are going to be 7 there long term, so we're not having these 8 reoccurring issues. 9 And, again, as Senator Hannon so aptly 10 pointed out, this is not unique to Brooklyn. This 11 is happening everywhere. 12 So, we need to be very diligent and judicious 13 with the few State dollars that we have remaining. 14 SENATOR MONTGOMERY: Yes. 15 Now, the -- as I understand what 16 Dr. Williams has, and SUNY has, been describing 17 for us, is that they're looking to develop a new 18 system, which does, in fact, replace the hospital, 19 in terms of the brick and mortar, the buildings, 20 with a system that actually does meet the needs. 21 Because the -- even though people don't go to 22 the hospitals, you know, any longer, in the same -- 23 to the same extent, the needs for health -- a health 24 system and health care, are even more intense, 25 because people still seem to be suffering very high 1 rates of all of the indicators of poor health. 2 So, then my question is: How do you look at 3 what SUNY is trying to develop, in terms of a 4 priority, if, in fact, we believe that what they are 5 proposing will end up being a system of delivery of 6 health care that moves away from the hospital more, 7 and into primary care, which they have said, and 8 suggested, that that's what's going to happen with 9 their plan? 10 Does that mean then, that that $150 million, 11 that you're going to be using more of that, to, in 12 fact, support the development of this network which 13 will accomplish what you say you want to see happen? 14 JAMES CLANCY: So, again, I -- I don't know 15 the answer to that question about the specific 16 network that SUNY has put in their sustainability 17 plan. 18 I will say this, though: The money will be 19 used to ensure that the residents of Brooklyn get 20 the services they need. 21 Now, does that mean we will move towards less 22 beds, and more preventive -- primary preventive 23 care? Could very well be. 24 Needs assessments are done. As I said, we've 25 had the reports. 1 Brooklyn, it's pretty understood, and pretty 2 known, where the problems are, and why they exist. 3 So, we have the road map of making sure -- of 4 knowing where we need to go. 5 What we need to do, though, is match that 6 with the services the facilities provide, and/or 7 going to provide, moving into the future. 8 So, kind of, I think the answer is 9 "stay tuned," with respect to the SUNY plan. 10 I'm not here to say yes to the plan, as 11 Senator Hannon asked; I'm certainly not here to say 12 no to the plan either; but to say we have a lot of 13 work to do in a very short period of time, to make 14 sure that the right decision is made. 15 SENATOR MONTGOMERY: And I guess I'm not 16 hearing, as you are speaking, you know, answering -- 17 I understand, certainly, you're not prepared to say 18 to this particular plan, that that's what, you know, 19 you believe is going to happen. 20 But, I'm not hearing where you and 21 Commissioner Shah and the department are looking to 22 be more of a supportive partner in what it is they 23 are trying to do, since -- especially, since it 24 seems to meet the -- your goals, as it relates to 25 the delivery of health services in Brooklyn. 1 They're struggling, we're struggling, to come 2 up with a plan. 3 They have a plan. 4 But I'm not -- and I know that you say the 5 department wants to change what we have now, which 6 is not a plan, not a system that delivers health 7 care that is needed. 8 But I don't see -- I don't hear the 9 commitment that the department has to working with 10 us, and I'm using "us" loosely, I really mean, 11 working with SUNY, to help develop that. 12 I'm just -- there's something that is 13 missing. 14 I'm hearing that, you know, you're going in 15 different directions even though you have the same 16 purpose and mission. 17 JAMES CLANCY: And I apologize for that if 18 I've not been clearer. 19 I would state very clearly, that we are here 20 to partner with SUNY -- 21 SENATOR MONTGOMERY: Yes. 22 JAMES CLANCY: -- to ensure that we fully vet 23 and understand their needs, their recommendations, 24 and then we will take that all into account, to 25 continue to work with them, to decide what the best 1 outcome will be. 2 We are fully committed to that. 3 SENATOR MONTGOMERY: And supporting it? 4 JAMES CLANCY: Correct. 5 SENATOR MONTGOMERY: I appreciate that. 6 That's what I wanted to hear. 7 JAMES CLANCY: You bet. 8 And I'm sorry if I wasn't clear. 9 SENATOR MONTGOMERY: Yes, thank you. 10 JAMES CLANCY: You bet. 11 SENATOR MONTGOMERY: Thank you, 12 Mr. Chairman. 13 SENATOR HANNON: And that may well be the 14 premise -- that -- 15 That well may be the premise that we're 16 actually operating on, because, even reading the 17 2011 report of the Brooklyn hospitals, and that's 18 what the Commissioner asked for, in terms of a 19 viable system, going forward, to take care of 20 patients. 21 I think there's something else that just 22 need -- people need to understand, when you talk 23 about consolidating or downsizing, some of that is 24 going on now in all of the hospitals, and it's not 25 necessarily for poorer care; rather, it's for better 1 care. 2 JAMES CLANCY: Correct. 3 SENATOR HANNON: There has been a significant 4 shift from inpatient care, which might be 85 percent 5 of the care given in a hospital, to almost 6 50 percent being on an outpatient basis. 7 So that -- because you can do ambulatory 8 care, you can do outpatient care, you can do primary 9 care; you don't have to be an inpatient. 10 And so that shift has a different emphasis as 11 to, where the work is being done, and how well it's 12 being done. 13 So, just change alone in medicine is 14 dictating some of the things that we need to 15 address, and that's why there needs to be some 16 significant work done in Brooklyn, and in the rest 17 of the state. 18 Can I just jump in, and -- I don't know, are 19 you finished, Senator? 20 SENATOR MONTGOMERY: Yes, I'm through. 21 SENATOR HANNON: Sorry to interrupt. 22 SENATOR MONTGOMERY: Thank you. It's quite 23 all right. 24 SENATOR HANNON: It occurs to me that we need 25 to review what we've done with our HEAL money, not 1 in terms of a microscopic look, but really the 2 bigger picture: where it's gone, what may happen. 3 Because one of the inquiries, as you go 4 forward with a system that needs capital 5 development, is to say, Should we go back and do 6 another HEAL? 7 Now, circumstances dictate. 8 We've had the discussion in budget, that 9 that's not going to happen. 10 But I do think it needs to be brought forward 11 so people can realize, what has been done, where it 12 has worked, where it may not have worked. 13 And then, especially, as we're looking for 14 trying to continue the waiver with the federal 15 government, and getting money through there. 16 JAMES CLANCY: I think that's very valid. 17 SENATOR LAVALLE: Okay. 18 JAMES CLANCY: Thank you, Senators. 19 SENATOR LAVALLE: Hearing no other questions, 20 thank you very much. 21 Okay, we will come back, 1:30, sharp. 22 (A recess was taken.) 23 (The proceeding resumed, as follows:) 24 SENATOR LAVALLE: Okay, we're going to 25 reconvene. 1 The next group, I have Susan Kent, president, 2 New York State PEF; 3 Fran Turner, director of legislation and 4 political action, CSEA; 5 Steve Allinger, director of legislation, 6 NYSUT; 7 Fred Kowal, president -- and newly elected 8 president -- of UUP; 9 Rowena Blackman-Stroud, treasurer, UUP, and 10 the president of SUNY Downstate Chapter. 11 STEVE ALLINGER: Senator LaValle, we have -- 12 SENATOR LAVALLE: We'll wait until all of 13 your members -- 14 SENATOR HANNON: And playing the role of 15 Fran Turner is...? 16 JOHN BELMONT: Johnny Belmont. 17 DON MORGANSTERN: Don Morganstern, from PEF. 18 Susan Kent, unfortunately, had to go to 19 Washington today, so I will be here, for her. 20 SENATOR LAVALLE: Better her than us. 21 DR. FRED HYDE: I'm Fred Hyde. I'm a 22 consultant working with all these groups. 23 FRED KOWAL: I'm Fred Kowal. I'm from UUP. 24 ROWENA BLACKMAN-STROUD: I'm 25 Rowena Blackman-Stroud, from UUP. 1 SENATOR LAVALLE: Okay, I think we're all set 2 up. 3 Steve, are you the -- 4 STEVE ALLINGER: I'm the leadoff. 5 SENATOR LAVALLE: -- leadoff, or who -- I 6 don't know who was -- 7 STEVE ALLINGER: I'm here in an unusual role. 8 We had formed our own consortium, the 9 unions -- 10 SENATOR LAVALLE: Okay, just speak up, 11 though, because I don't -- 12 SENATOR HANNON: Yeah, pull the mic closer to 13 you. And it may be taped down. 14 STEVE ALLINGER: Bolted? 15 It's taped. 16 How's that? 17 SENATOR STAVISKY: It's fine. 18 STEVE ALLINGER: Okay, I'll speak louder. 19 I'm going to give a joint statement that 20 represents the views of all the unions that 21 represent the staff, employees, at the 22 University Hospital Downstate. 23 We're -- share a similar fate. 24 We represent the large majority of the 25 8100 employees in SUNY Downstate Medical Center. 1 We share a common commitment to the public 2 health-sciences education mission, and the public 3 safety-net health-services mission of the hospital. 4 Together, we retained the services of an 5 accomplished health-care consultant, and finance 6 consultant, Fred Hyde, who has run distressed 7 hospitals, consulted with other unions, and teaches 8 health finance at Columbia and business at Fordham. 9 And, in the interest of time, I reduced my 10 comments to what we believe are the required 11 elements in a SUNY Downstate sustainability plan. 12 First of all, we believe that you must retain 13 a strong academic medical center which controls its 14 own, and its affiliated clinical facilities, as a 15 central organizing principal of urban health care in 16 Brooklyn. 17 You cannot retain the quality, the breadth of 18 the medical education, without having a fully 19 integrated clinical services and hospital. 20 And loss of that control, loss of that 21 fidelity to the education mission, would degrade the 22 quality, and threaten the -- would threaten the 23 mission of all the five schools at Downstate. 24 We are cognizant that we must move towards 25 more ambulatory care in these underserved 1 neighborhoods. 2 As you heard, one-third of the residents in 3 this area lack access to primary health care. 4 And that's why we propose, that as part of a 5 sustainability plan, that over the next three years, 6 SUNY Downstate should develop up to four 7 decentralized, freestanding primary- and 8 ambulatory-care satellites. 9 Each of these satellites should have academic 10 service and community components, all tied to the 11 full-time emergency departments at the 12 University hospitals of Brooklyn, and staffed by as 13 many as 600 or more health professionals currently 14 employed in the UHB in patient hospital settings, 15 all with medical-school control and appointment 16 authority. 17 These employees should remain as public 18 employees and retain their current 19 collective-bargaining representation. 20 We also believe the sustainability plan 21 should fund these satellites by monetizing the 22 net-asset value of real estate acquired with the 23 Long Island College Hospital, while still operating 24 LICH as part of the health-care facilities. 25 Two-thirds of that net-asset value of the 1 LICH real estate could be devoted to the subsidy of 2 UHB operations during a three-year transition and 3 development period. 4 These satellite emergency and urgent-care 5 centers would help SUNY Downstate recover some of 6 the lost inpatient volume from UHB, including losses 7 experienced by the former LICH. 8 If inpatient census had declined at LICH and 9 at UHB only at the Brooklyn-wide average rate, there 10 would be 6,000 additional discharges per year in 11 these hospitals. 12 We also believe that it was evident, looking 13 at the research, that between 2010-2011, the bad 14 debt and uncollected revenue doubled. 15 It went, essentially, from 1X to 2X; from 16 about 37 million to about 77 million dollars. 17 So, obviously, we're recommending: 18 That there should be a chief operations 19 officer added to Downstate management, that can help 20 Dr. Williams, who's done a great job in terms of 21 the strategizing, that can handle the operational 22 hurdles that remain to be dealt with; 23 That there should be metrics and 24 transparency, including publication of revenue-cycle 25 goals and measurement of progress toward their 1 achievement; 2 Declining personnel expense in UHB inpatient 3 services as new jobs with new sources of revenue are 4 developed in decentralized emergency centers. 5 What we're saying is, in a nutshell: 6 That you have this tremendous unmet 7 health-care need in Brooklyn, with very high 8 incidence of poor-health outcomes, so, let's kill 9 two birds with one stone. 10 Let's confront the financial-stability 11 problems at Downstate by also addressing those 12 health-care needs. 13 We believe that these freestanding 14 emergency-department, full-service centers could 15 break even, some make money in other settings, and 16 that you could, therefore, save 600 employees who 17 are badly needed, to be redeployed, and some extent, 18 retrained, to meet those health-care needs, rather 19 than causing mass layoffs, loss of employment, in a 20 high-unemployment community, and then, kill off the 21 human capital you need to meet the health-care 22 challenges in Brooklyn. 23 We believe, also, that you can't just solve 24 the problem by creating a convening body, but that 25 you must first solve the business-sustainability 1 problem. You have to fix the business model at 2 Downstate, shore-up the loss of the traditional 3 market share. 4 So, I'm going to conclude my opening remarks. 5 And, we've submitted testimony that I will 6 not read or summarize for Andy Pallotta, our 7 executive vice president. 8 SENATOR LAVALLE: Great. 9 Does anyone on the panel have -- we should 10 have asked SUNY -- the -- what the real estate is 11 worth at LICH? 12 Does anyone have that number? 13 DR. FRED HYDE: Mr. Chairman, there have 14 been -- this is Fred Hyde. 15 Thank you for the opportunity to respond to 16 your question, and look forward to more. 17 There have been -- there's been a wide 18 variety of speculation on that question. 19 For all of these unions, we created a 20 website, and the address is: 21 twoproblemsonesolution.org, just the way it sounds. 22 And the password is "public employees." 23 And you'll find what's called a "sensitivity 24 analysis," and an amortization schedule, so that 25 your staff can play with that and make their own 1 assumptions: If this, then that. 2 In other words, if the real-estate value is 3 such-and-such, with regard to monetizing it, to 4 support both the continued operations of LICH, which 5 we support, and the continued operations of UHB, 6 both of them needing transformation into more 7 outpatient-focused, but still legitimately 8 educational activities. 9 Your staff can make assumptions along with 10 us. 11 We chose 250 million, which we think is very 12 conservative, but, anybody can name a price, and 13 until it actually brings that value, by way of a 14 sale lease-back, not a change of the operation, not 15 a selling of the hospital, but trying to monetize 16 the real-estate value which otherwise is not going 17 to be realized. 18 So, your staff is more than welcome, even 19 though it has a so-called password on it of 20 "public employees," all smaller case, at 21 "twoproblemsonesolution.org." 22 And, your guess is as good as ours at this 23 point, but at least we can see changed assumptions. 24 SENATOR HANNON: How about -- first of all, 25 thank you, because your somewhat of a unique 1 approach to this, which is, you have a concrete 2 plan. 3 I don't know if the concrete plan's going to 4 be concrete, or, whatever, but, at least you have a 5 plan. 6 It seems to me that this is a plan directed 7 solely at the mission of keeping Downstate LICH 8 operating viable entities. 9 So it does -- and it does not attempt to go 10 beyond that which was, frankly, what we had asked 11 for in the hearing notice. 12 DR. FRED HYDE: Mr. Chairman, you are 13 absolutely correct. 100 percent correct. 14 And our plan aims at something that you 15 actually articulated earlier in this hearing, and 16 that is the achievement. 17 A well-run hospital today is about 50 percent 18 net revenue from inpatient, about 50 percent from 19 outpatient, roughly. 20 We're looking, as Steve and the rest of his 21 colleagues will tell you, at a three-year process, 22 not to lay people off, but to create meaningful jobs 23 for them in the ambulatory setting. 24 The model for this, even though it's a little 25 grander than we think, is that of the smartest, we 1 think, at least I think, group you currently have on 2 Long Island, and, in fact, anywhere in 3 New York State; and that is a freestanding emergency 4 satellite about to open in April of 2014, sponsored 5 by North Shore-LIJ. 6 It needs an educational curriculum. It means 7 meaningful jobs. This is not giving a laptop to a 8 laid-off auto worker. 9 SENATOR HANNON: Which freestanding groups of 10 all the things they're doing? 11 DR. FRED HYDE: For us? 12 SENATOR HANNON: No, North Shore. 13 DR. FRED HYDE: North Shore-LIJ in the 14 West Village. 15 SENATOR HANNON: Which one -- West Village? 16 Okay. 17 DR. FRED HYDE: Yes, correct. 18 SENATOR HANNON: This is to take the place 19 of -- 20 DR. FRED HYDE: Taking the place of 21 St. Vincent's. 22 Now, we're not taking the place of anything. 23 We're adding to the reservoir of jobs that are 24 meaningful jobs in the health-care field, for people 25 who have been nurses on the inpatient side, to 1 become nurses on the outpatient side. 2 But not to pretend that's going to happen 3 without an orderly plan. 4 SENATOR HANNON: I presume your website has 5 the further assumptions, calculations, and 6 spreadsheets that are necessary to take a look at 7 all of this? 8 DR. FRED HYDE: That's correct, 9 Mr. Chairman. 10 And in addition, just so you can walk in our 11 shoes, you will find 10 years' audited financial 12 statements for LICH, for University hospitals. 13 You'll find everything that you would want if 14 you were in my shoes, courtesy of all of the work 15 that these folks have done to obtain that 16 information. 17 SENATOR STAVISKY: Could I just follow up? 18 SENATOR LAVALLE: Yes, go ahead. 19 SENATOR STAVISKY: Quickly, North Shore-LIJ 20 health-care systems was what I had in mind when I 21 asked Dr. Williams earlier today if they've 22 contacted any other hospitals. 23 Because they have an extensive network in 24 Manhattan, as well as Queens County and 25 Nassau County. 1 I know they have an affiliation with Hofstra 2 that's about to take off with a medical school. 3 But at any rate, I find that very 4 interesting. 5 DR. FRED HYDE: Senator, as an extremely 6 poignant question for me: 7 Yesterday, at the behest of my colleagues 8 here, I met with a similarly situated person, a 9 staffer, academic, well respected in the 10 private-sector unions. 11 And I said to him what had happened with 12 regard to the selling of LICH. 13 He specifically related a conversation with 14 leaders at North Shore, and said, "that it had been 15 remarkably casual." 16 Okay? 17 So if you, from the point of view of where 18 you are, think that the State can do better, now 19 looking forward -- not throwing bricks backward, but 20 looking forward -- either monetizing the asset 21 value, or, disposing of the hospital to someone who 22 wants to run LICH, because we want LICH to stay 23 open, UHB is a basketball player; LICH is a 24 Kardashian. 25 We want them both to be in business here. 1 [Laughter.] 2 DR. FRED HYDE: If you want that to happen, 3 you're going to have to articulate a process, at 4 least as well known to you, as to me, through which 5 we get the financial professionals in this state on 6 that particular case. 7 It can't be casual. 8 This hospital had booked $167 million loss in 9 2011, because of the acquisition. 10 So, it's not -- it's not trivial what the 11 outcome is, with that value. 12 SENATOR HANNON: What are the immediate 13 financial needs to your plan? 14 DR. FRED HYDE: I missed a word. 15 SENATOR HANNON: What are the immediate 16 financial needs in order to implement your plan? 17 What would be the monies needed to make this 18 go forward? 19 DR. FRED HYDE: The first stage is remarkably 20 inexpensive, and that would be, we estimate 21 something less than $15 million to set up a training 22 program that has a budget, that has leadership -- 23 Dr. Williams is perfectly capable. 24 And by the way, we think very highly of him. 25 -- and that has a reporting schedule, so 1 that, as we go through a process of diminished 2 inpatient activity, and expanded outpatient 3 activity, we don't lose track of the human beings 4 who have the former jobs and we want to have the 5 latter jobs. 6 That's remarkably inexpensive. 7 Secondly, the monetizing of LICH doesn't take 8 money. It produces money. 9 In other words, if you're with me, all over 10 the country, we have hospitals that are saying: Do 11 we really need to have real estate on our books, or, 12 can we do something to help in this transformative 13 process, to go from here to there, by raising some 14 equity? 15 And there are plenty of people in an era of 16 less than 2 percent 10-year treasury bonds, who are 17 willing to invest at 3, 4, 5 percent in a sale 18 lease-back or in a retyping investment. 19 Plenty of people willing to do that, we just 20 need to set up the opportunities. 21 So, the amount of money is on, actually, 22 Appendix B in my report, by year, in terms of the 23 expectations for diminished employment in the 24 hospital, expanded employment outside. 25 And you will see that, at three years, we get 1 down to the number that you asked about at the 2 beginning of the hearing, which is: What should be 3 the State subsidy? What should be the baked-in 4 state subsidy? 5 You know, what? It's actually an easy 6 question. 7 It's about the bad debt. 8 It's about what the facility does, that is 9 unreimbursed, because, at the end of all of the 10 Patient Protection Act, and after the exchanges, 11 we're still going to have, CBO says, 31 million 12 uninsured people. 13 A lot of them are going to be your 14 responsibility as public servants, and the 15 responsibility of these employees as public 16 servants. 17 The question is: What else do you need? 18 The answer is: In a well-run hospital, 19 frankly, not much more. 20 SENATOR LAVALLE: I just want to follow up on 21 a basic question, and this is something that we will 22 ask SUNY. 23 But, have there been discussions, in terms 24 of, with SUNY, "This is our plan?" and, did they 25 say, "Gee, looks good. Get lost!"? 1 Anything? 2 STEVE ALLINGER: No. 3 We've had two meetings with SUNY. 4 SENATOR LAVALLE: Who, in -- who, 5 specifically? Lora? 6 STEVE ALLINGER: With Lora Lefebvre, 7 Stacy Hengsterman, and Chairman McCall, about a week 8 ago. And, at the end of last week, we had another 9 meeting that included Chancellor Zimpher. 10 And, frankly, I think that they were open to 11 the presentation. They were respectful. 12 It was not -- they didn't commit, but they 13 felt that their plan, in what we were -- elements of 14 our plan were not incompatible, that they could 15 coexist. 16 That's not the same as saying we've gotten to 17 yes, but I felt that we were given an open 18 reception. 19 And also, you know, we have praise for, Lora 20 and Dr. Williams were very open in terms of 21 furnishing us the background material we needed to 22 do proper analysis. 23 So, we do want to thank them for that. 24 SENATOR LAVALLE: Well, you know, I'm 25 hopeful, because the dialogue has been established. 1 And I think -- from my own perspective, I 2 think there has to be a number of discussions that 3 go on contemporaneously, and then, at the end, we 4 have to weave together and create something that 5 will work. 6 And you heard earlier, in terms of 7 Commissioner Shah, expects to make an evaluation of 8 the plan, and there's a stake there, you know. 9 So I think, as I have had said, this is the 10 beginning of a process. 11 A beginning. 12 So this gives me some good hope. 13 FRED KOWAL: Senator LaValle, if I might add 14 something to Steve's comment on that. 15 The difference that I see is that, with SUNY, 16 there isn't the appreciation for what I see as a 17 necessity for an enhanced Downstate Medical Center 18 really being at the core of health care within 19 Brooklyn. 20 From what I have seen, and what I have heard 21 from SUNY, is they see a downsized, perhaps they use 22 "rightsized," but, regardless, we are talking about 23 retrenchments, layoffs. 24 The number that they have used is upwards of 25 600 people retrenched at Downstate alone. 1 They have talked about exiting from LICH. 2 Just in terms of UUP, that means 400 of our people 3 there. 4 They seem to see that Downstate Medical 5 Center will have a role within a network of 6 health-care providers under the auspices of a not 7 very clearly defined public-benefit corporation. 8 For us, the focus is much clearer, and that 9 is, that the challenge is to enhance 10 Downstate Medical Center, so that they can continue 11 to provide what is a world-class series of health 12 care, or health care in general, to the population 13 in Brooklyn, and, build around that, as Fred Hyde 14 was talking about, the idea of feeder health-care 15 systems. 16 SENATOR LAVALLE: Senator Rivera wants to ask 17 a follow-up question? 18 SENATOR RIVERA: Yes, because I think -- I'll 19 be, actually, very direct. 20 So, do you disagree with the contention of 21 the folks that were here earlier from SUNY, that the 22 only way for SUNY Downstate to survive, is to form 23 this coalition or consortium type of situation? 24 FRED KOWAL: From my perspective, first of 25 all, we need a lot more details as to what the 1 consortium would involve. 2 My own initial read of it is, I'm very 3 concerned about a discussion about, literally, 4 parceling out health-care services amongst different 5 hospitals. 6 The fact of the matter is, as you did hear, 7 Dr. Williams did state this eloquently, that 8 Downstate Medical Center is the sole source of 9 medical care for thousands of people in Brooklyn. 10 And some of the services that are provided 11 there are the only place where they're going to be 12 able to get them. 13 And, in fact, there are some services that 14 public hospitals provide because they simply are not 15 profitable for private hospitals to provide. 16 And that's a question that I would love SUNY 17 to be able to answer. 18 But beyond that, I think Dr. Hyde may -- 19 DR. FRED HYDE: Just one note, I want to 20 underline, I have known Ms. Lefebvre for years; a 21 high-class, high-quality public servant. 22 We think very highly of Dr. Williams. I've 23 found we've had people in common. 24 Mr. Morganstern at the other end of the 25 table has been my guide, and we're getting to know 1 the individual chairman in the hospital, and the 2 hospital director. 3 So anything we say is not a reflection, 4 frankly, on any of the people. 5 I have been four decades in this field. 6 And for better or worse, have 3 graduate 7 degrees, and have taught 13 years, and I've run a 8 couple of hospitals. 9 I have never heard of this model anywhere in 10 the American health-care system. 11 It would be novel. 12 DON MORGANSTERN: If I could -- I'm sorry. 13 SENATOR RIVERA: But I would like to -- 14 obviously, you're going to follow up in a second, 15 but just, since you said, it is -- so it is very 16 novel, but, in your estimation, and you just stated 17 your credentials, 3 -- 30 years, or 40 years, you 18 said, 3 different -- 19 DR. FRED HYDE: Unfortunately, forty. 20 SENATOR RIVERA: 40, and 3. But there was a 21 "3" in there; there was 3 different graduate 22 degrees, obviously. 23 DR. FRED HYDE: You got it. Correct. 24 SENATOR RIVERA: And I'm actually looking at 25 the website that you pointed us to right now, and 1 I'm looking at -- there's a lot of information here. 2 DR. FRED HYDE: You bet. 3 SENATOR RIVERA: Including a bunch -- I guess 4 the Excel files are there, so that we can plug 5 different numbers in, and have it -- 6 DR. FRED HYDE: That's exactly why they're 7 there, sir. 8 SENATOR RIVERA: So I'm going to be doing 9 that at my computer upstairs in a second. 10 But, in your estimation, then this novel 11 approach of -- is not -- is certainly not the only 12 approach, because I figured that this -- that this 13 is at least an outline here of how you can have 14 that -- this particular institution. 15 Maybe what you're saying, is that it -- it's 16 not that you should -- that we should not look at 17 trying to get it together with a consortium with 18 other institutions, but that there are ways to have 19 the institution itself, to enhance what it does, to 20 be able to have it survive on its own? 21 DR. FRED HYDE: Everything you've said I 22 would agree with. 23 There's a business problem that has to be 24 solved. 25 If you don't fix that business problem, 1 you'll be doing this again. 2 If you do fix that business problem, you may 3 or may not need a compulsory coordination, if you 4 will, for lack of a better phrase. 5 If you come to that compulsory coordination, 6 weakened, you will lose, and the physicians will 7 lose, and the state of New York will lose. 8 You won't have the powerhouse that you need. 9 If you come to that compulsory coordination, 10 if it takes place, strong, with a balanced 11 inpatient-outpatient program, with -- 12 And this hasn't been mentioned, but 13 Dr. Williams is acutely aware of it. 14 -- an outpatient program the residents 15 actually want to go to. 16 That's not what we have today anywhere in 17 this country. 18 Four years, the accreditation bodies have 19 hammering the schools of medicine to come up with 20 meaningful curriculum. 21 And the residents don't like what they find. 22 SENATOR STAVISKY: What -- you're talking 23 about the doctor residents? 24 Not the local residents, but the doctor 25 residents? 1 DR. FRED HYDE: The physician residents, 2 that's correct. Exactly. 3 Thank you for clarifying. 4 What happens is, you've got some time, go out 5 to this clinic. 6 We'll get a bus out there. 7 All the talks are back here. 8 All the education is back here. 9 All the big faculty are back here. 10 When you go there, you end up doing 11 scut work. You're not really doing anything which 12 is educational for you. 13 And that's what you're trying to do; you're 14 trying to prepare, as a physician, or a nurse, or an 15 allied health professional, so that the rest of your 16 career, you can be trusted to have a license to take 17 care of people. 18 You've got to maximize your educational 19 activity. 20 You can't do that without structure and 21 thought and an entire process. 22 And the centralization of this is what we're 23 trying to get, trying to move SUNY to putting that 24 in the center: Fix the business problem by fixing 25 what also is an educational problem. And then, 1 perhaps, you may be in a much stronger position to 2 do whatever you want. 3 SENATOR RIVERA: And I know that the 4 gentleman wanted to add something. 5 DON MORGANSTERN: Don Morganstern. 6 What I just wanted to add is, is 7 Dr. Williams testified, he -- Downstate has 8 agreements with other hospitals, to send our 9 residents there, to send our interns there. 10 In the same way he has that ability, he 11 already has the ability, if he wants to get together 12 with Brooklyn Hospital, with Interfaith Medical 13 Center, and sign agreements that say: Look, let's 14 negotiate together, with Blue Cross/Blue Shield, 15 with this health-care system, to set rates. 16 They do not need to set up a public-benefit 17 corporation to do this. They already have that 18 ability. 19 And Senator LaValle, obviously, is not going 20 to remember me, but, 5 years ago, 10 years ago, I 21 met with him and the heads of the SUNY Stony Brook 22 Campus, in his offices, discussing this, because 23 this is already the second or third or fourth time 24 over the past 10, 15, 20 years, that SUNY has come 25 up with: Let's set up a public-benefit corporation. 1 The only thing this time is, you know, 2 they're saying it will not operate the hospitals. 3 But if SUNY is given the inch, if there is a 4 loophole in the law, they will find a way to use 5 that public-benefit corporation to privatize the 6 hospitals. 7 SENATOR LAVALLE: So what's happened over the 8 last 10 or 20 years with the -- 9 DON MORGANSTERN: Fortunately, and with your 10 assistance, and the Senate's and the Assembly's 11 assistance, they were not given the approval to set 12 up their public-benefit corporation. 13 SENATOR STAVISKY: Can I just add one other 14 thing? 15 I was somewhat critical of the concept of the 16 public-benefit corporation. 17 And as I listened to the SUNY testimony, I 18 came to the conclusion that what they really want, 19 the reason they want the public-benefit corporation, 20 is to issue bonds; to borrow money. 21 And it seemed to me, and I asked the 22 Chancellor the question: Isn't this -- isn't 23 everything else really the role of SUNY and the -- 24 and Downstate? 25 "Do we need the public-benefit corporation?" 1 is my question. 2 STEVE ALLINGER: Senator, we probed this 3 pretty thoroughly last week, and -- on two 4 occasions, and you heard the Chancellor today, that 5 there -- that is not a motivation right now, 6 according to them, the issuance of bonds, or using a 7 PBC as a debt -- for debt instruments. 8 And I think, in a question here, they said 9 they would not recommended it at this time, I think 10 when they were queried about what should -- what 11 should be in the PBC legislation. 12 DR. FRED HYDE: Senator, let me add one 13 thing, because this is something you know, but you 14 may not know how it compares to the 49 other states. 15 New York State hospitals are the most heavily 16 indebted in the world. 17 I tell my students that debt is not always 18 good. 19 Debt accounts for more than 85 percent of our 20 capital formation in the hospital field anyway, but 21 it increases the risk profile of organizations, such 22 that, when revenue falls below expectations, they 23 have to do wacky things, like throwing people 24 overboard. 25 So, debt is not, in and of itself, 1 necessarily a good for a New York State hospital. 2 What you'll find in our plan, is equity. 3 We're trying to monetize something which is 4 sitting there in Cobble Hill, which is the net-asset 5 value of some very nice property right off the BQE, 6 "leaving a hospital in place" -- leaving a hospital 7 in place, but taking advantage of the fact that the 8 land is doing nobody any good right now. 9 And it won't do anybody any good until, down 10 the road, if that ever happens, somebody shuts the 11 hospital. 12 We want to do some good with that land value 13 while the hospital is there. 14 SENATOR LAVALLE: You want to do a 15 lease-back? 16 DR. FRED HYDE: That would be a model, yes, 17 sir. 18 SENATOR LAVALLE: 250 million, or 19 thereabouts? 20 DR. FRED HYDE: If you play with the 21 alternatives -- 22 SENATOR LAVALLE: Let's assume. 23 DR. FRED HYDE: You can get -- you can 24 guarantee a 4 or 5 percent return. 25 And I've put the rental -- in other words, if 1 the State were to say, "We want to lease this 2 property to the ABC Hospital Corporation, to run 3 LICH," that income is sufficient to run the 4 transformation process. 5 If you did the opposite, and you said you 6 wanted to sell, and then lease back, and have the 7 State of New York guarantee the lease, we've put the 8 lease expense into our proforma. 9 Either way, you managed to get either a large 10 amount of equity, or support for a transition. 11 SENATOR LAVALLE: I'm assuming that before we 12 get to that, you've said you got to -- you have to 13 fix the business problem. 14 DR. FRED HYDE: Correct. 15 SENATOR LAVALLE: So, doesn't that need to 16 be -- I mean, you can't go out -- 17 DR. FRED HYDE: This is -- no, no. 18 This is part of fixing the business problem. 19 If you think that all business problems are 20 people, space, money, and equipment, you have to 21 start with people. 22 And, the people; the way you start with the 23 people: They get 600 human beings off the payroll 24 at UHB, and whatever number after an appropriate 25 examination takes place at LICH, and on to the 1 payroll of a satellite outfit, with a job that is 2 meaningful. 3 Okay? 4 Before you can do that, you need to say: How 5 are we going to create the facilities and the 6 equipment in order to do that? 7 So, it's a simultaneous equation, but unless 8 you begin with the people, you'll layoff 600 here 9 and you'll hire 600 there. And they won't be the 10 same people. 11 And, rather than losing that institutional 12 memory, that clinical expertise, our point of view 13 is: 14 All right, we'll play with, we'll go along 15 with, we'll lead the way for, a transformation. 16 Just make sure it's a real transformation, and not 17 just shutting things down in hopes that they'll 18 spring up. 19 SENATOR LAVALLE: I assume you have been at 20 the meetings that Steve talked about? 21 DR. FRED HYDE: Yes, sir. 22 SENATOR LAVALLE: And, you're now a 23 professional, you've done this lots of times, 24 sitting down with people, looking at plans? 25 DR. FRED HYDE: Yes. 1 SENATOR LAVALLE: Was there receptivity -- 2 DR. FRED HYDE: Yes. 3 SENATOR LAVALLE: -- to what you were saying, 4 or was it going in one ear and out the other? 5 DR. FRED HYDE: It's halfway in between. 6 And the point that was made, which is, that 7 we would like SUNY to make central, fixing the 8 interrelated aspects of this business problem, and 9 not necessarily concentrate on a solution which is 10 perhaps in search of a problem. 11 We'd like to move it onto the center page, 12 recognizing that there may, in the very near future, 13 be terrific reasons to do something like this. 14 But, you don't want to walk in with 48 cards 15 in your hand. You're not going to do well. 16 Somebody is going to say: Why do you need 17 orthopedics? We'll take the orthopedic residents. 18 And next thing you know, the orthopedic 19 resident are someplace else. 20 So that's -- that's our point of view, which 21 is, I understand your question, and I'm -- 22 SENATOR LAVALLE: Yeah, I get -- 23 DR. FRED HYDE: -- honestly, it's halfway 24 in -- more or less, in between. 25 But making central that mechanical set of 1 things -- 2 Setting up a center for this kind of 3 transformational activity; 4 Having a realistic budget; 5 Space; 6 Where are we going to develop these things? 7 Are we best off going in this direction, or 8 that direction? 9 -- let's look at the hot spots. 10 This Brooklyn Health Improvement project is 11 fabulous resource. They know where these things 12 should be. 13 STEVE ALLINGER: Senator, I think we would be 14 remiss if we also didn't point out that, although 15 there were -- you know, there were miscalculations, 16 obviously, and it's water over the dam on which 17 acquisition, there were Medicaid cuts, the State 18 appropriations to the hospitals has also played a 19 role. 20 I think, in 2007, we were at $42 million for 21 Downstate. We're down -- and then, in 2011, it was 22 17. 23 That it is a significant, you know, part of 24 the operating gap. 25 And the reason I'm raising this, is there's 1 last always going to be a -- there is a public 2 mission in this hospital that deserves public 3 appropriations. 4 You have a 2400 physician shortage in primary 5 care, and it's growing, while you're having a large 6 increase in insured people who, theoretically, are 7 going to, therefore, access health care more than 8 you have today, with a growing shortage. 9 We feel that deserves a State appropriation. 10 Moreover, the teaching research hospitals get 11 the highest federal reimbursement. And they were a 12 driver and an engine for economic growth and 13 development in the state. 14 And that's a comparative advantage the state 15 has, and we think it would be penny-wise, 16 pound-foolish, not to have a properly sized 17 appropriation for that public mission, including the 18 safety-net mission. 19 As Dr. Hyde said, we're gonna have residual 20 population that will be uninsured. 21 And it's estimated at, I believe, anywhere 22 around a million, New York State, and it will be 23 disproportionate in this part of Brooklyn. 24 And, therefore, we're not saying the State 25 doesn't have a role in appropriating funds. It 1 has -- this is a proper role for the State, and it 2 has a profound public mission in supporting this 3 school. 4 SENATOR LAVALLE: I just want to state for 5 the record that, and Senator Hannon can weigh in, 6 any of the conversations that we've had, when we 7 spent time this morning talking about the past, 8 because the past is important, and that you're not 9 going to go down the same road and make the same 10 mistakes. 11 But we are focused on the future; fixing the 12 problem: What will work to make this work? 13 So, I don't want anyone to think that because 14 we were looking at what brought us here, our 15 Committees are focused on, we ought to get to where 16 we need to get, to give the people of the borough of 17 Brooklyn good health care, save Downstate. 18 And you can't have -- realistically, you 19 can't have a medical school without its laboratory 20 and its clinic, which is its hospital. 21 STEVE ALLINGER: Senator, if I could beg your 22 indulgence. 23 We have people here who were ready to 24 summarize some of their statements at this time. 25 SENATOR LAVALLE: Let them go. 1 FRED KOWAL: Okay. 2 Senator Hannon, Senator LaValle, I just -- 3 I'm just going to summarize. You have my written 4 testimony. 5 And, this is actually a distinct honor for 6 me, because I just became president two days ago -- 7 well, three days ago, June 1st. 8 So, this is my first hearing, and, it's 9 incredibly important for our 35,000 members of UUP. 10 What happens at Downstate, we are fearful, of 11 course, that plans of downsizing, privatizing, 12 though we are confident that will not occur at 13 Downstate, we are always concerned that that could 14 be a template, certainly, for the other hospitals, 15 and perhaps even some of the non-hospital campuses 16 that we have. 17 I would hope that, as you examine the plan 18 that SUNY has proposed, well, perhaps you'll pay 19 attention to some of the specifics that has led me 20 to ask some questions. 21 For instance: 22 As Downstate is downsized, how many people 23 would lose their jobs? 24 And when there is discussion about the 25 exiting of LICH -- 1 Which, the wording that sometimes is used is, 2 on the one hand, amusing; on the other hand, 3 terrifying. 4 -- will that also mean a severe impact on the 5 staff there, including, as I said earlier, the 6 400 UUP members? 7 Also, those job cuts will mean a reduction in 8 health-care services. 9 Specifically, which of those services will be 10 reduced? 11 And how will these planned cuts impact the 12 teaching aspect of the hospital? 13 The reality is, that, from our perspective, 14 from UUP's perspective, and it's one that is shared 15 amongst all of the bargaining units, any 16 sustainability plan for the delivery of medical 17 services in Brooklyn must be centered on an enhanced 18 Downstate Medical Center. 19 This will serve to move Brooklyn and New York 20 in a direction of the present national trend of 21 academic centers becoming the centerpieces of urban 22 health care in the United States, particularly with 23 the full implementation of the Affordable Care Act. 24 Let's remember too, that despite recent 25 financial difficulties, Downstate Medical Center 1 remains the preeminent health-care institution in 2 Brooklyn. 3 The hospital provides many unique and 4 nationally recognized medical-care treatments, 5 including kidney transplants, dialysis care, and 6 Alzheimer's-disease treatment. 7 Which of those services will be lost through 8 the plan that SUNY has proposed? 9 SUNY Downstate is also the only safety-net 10 hospital in Brooklyn that satisfies the enormous 11 demand for health-care services for the indigent and 12 chronically ill. 13 Downstate Medical is also a pipeline for 14 doctors and medical providers. One out of every 15 three doctors in Brooklyn is a Downstate graduate, 16 and more New York City doctors graduate from 17 Downstate than from any other medical school. 18 This is especially crucial when one considers 19 that the state of New York is facing a growing 20 shortage, as Steve alluded to, of over 21 2400 primary-care physicians. 22 I need to be convinced, Senator, that the 23 plan that SUNY has put forward will, first, continue 24 to provide the health care that Brooklyn needs; and, 25 second, protect the jobs and income of our members 1 who have served the state, and the population of 2 Brooklyn for so very long. 3 In conclusion: The solution to the crisis 4 facing health-care delivery in Brooklyn and the 5 financial difficulties at DMC, is to properly fund 6 the hospital, restructure it to bring about an 7 increased emphasis on primary care, as called for in 8 the Affordable Care Act, and ensure that the 9 training of physician at Downstate Medical Center's 10 medical school continues to be a hallmark component 11 of the educational mission of SUNY. 12 Thank you. 13 SENATOR LAVALLE: Okay, you're on. 14 JOHN BELMONT: Just two quick points from 15 CSEA. 16 I mean, CSEA feels that SUNY is missing an 17 opportunity to provide primary care in the 18 communities now, rather than one to three years from 19 now, which it will take for a PBC to get up and 20 running, according to their plan. 21 It's been talked about today, that there is a 22 need to provide primary care. 23 And through these satellite offices that are 24 talked about, they're also avoiding layoffs. 25 So this is the time for a transformation 1 rather than just a simple downsizing. 2 These employees can transition into these 3 community satellite centers, and still provide 4 economic activity into the community as well. 5 So, just something to keep -- to be reminded 6 of. 7 DON MORGANSTERN: Okay, and Don Morganstern. 8 Again, Susan Kent apologizes for not being 9 able to be here today. 10 I'm an executive board member of PEF, and the 11 council leader at SUNY Downstate Medical Center, 12 where we represent about 650 employees, the vast 13 majority being nurses in the hospital. 14 I've been there since 1974, as a research 15 scientist in the department of cell biology. 16 My research, I'm a molecular biologist, and 17 my research interests have been in muscle and 18 cardiac cells. 19 And, I am proud of the fact that, directly, 20 thousands of researchers around the world are using 21 things that I've discovered; and, indirectly, 22 thousands of patients are being treated by work that 23 I've done. 24 If Downstate's plan goes through, I will be 25 one of those laid off. 1 Dr. Desingarao Jothianandan is also a 2 research scientist at PEF -- at SUNY Downstate, a 3 PEF member. He's been there 40 years. 4 He is a co-author on most of the papers that 5 were done by Robert -- Dr. Robert Furchgott, who 6 is our Nobel Prize winner. 7 If this goes through, he will be laid off. 8 And the reason why I brought up these two 9 things, other than putting a face to some of the 10 layoffs, is the fact that what SUNY is not telling 11 you, is that they are also downsizing the medical 12 school and the colleges. 13 So there have been significant numbers of 14 people who are being laid off, or have been targeted 15 for layoffs, on lines that are fully funded in the 16 budget. 17 So when you pass the budget for the medical 18 school, there are these lines that are funded, not 19 dependent upon the hospital for reimbursements, but, 20 these people are being laid off. 21 I want to next, and again I'm summarizing 22 because you have the written testimony, in terms of 23 Downstate and some of the problems which we have: 24 Where did the deficit come from? 25 How did it get to grow so badly? 1 One of the things I wanted to mention was the 2 bad debts. 3 $77 million of uncollected debts in 2011, 4 which is the last year we have. That's 14 percent 5 of revenue, the funds were not collected. 6 Most hospitals -- 7 That's 14 percent. 8 Most hospitals, their bad debt is somewhere 9 in the range of 3 to 5 percent. 10 So if you can reduce the bad debt by even 11 50 percent, get it to a range of 7 percent, which is 12 still a little bit high, you're closing out a 13 significant amount of Downstate's problems. 14 In the three years, including 2011, and just 15 prior to that, the bad debt totaled $150 million. 16 So there is a problem with billing, or the 17 collection of billing. 18 At the same point in time, at the other end 19 of the spectrum, with the DRGs, that's the coding 20 done by CMS for Medicaid and Medicare of what a 21 hospital can charge for services. 22 When you compare the three SUNY hospitals, 23 Downstate is the lowest in its billings, but, yet, 24 is in the highest cost area. 25 So what they should be billing should be more 1 than the other SUNY hospitals, and other similar 2 hospitals; and, yet, they are billing less. 3 So you have at both ends of the billing 4 spectrum. 5 And if these problems were solved, a 6 significant portion of Downstate's debt would be 7 taken away, right then and there. 8 SUNY also mentions about the employee 9 problems. 10 I mean, it's highlighted in Dr. Williams', 11 and I do respect him greatly, he mentions how the 12 fringe-benefit costs were listed as increasing 13 43.6 percent over a 5-year period. 14 That's well within the normal range, but it's 15 an attempt to blame employee costs on some of 16 Downstate problems. 17 He mentions the employee retirement system 18 increased, the payments to it, by 100 percent over 19 5-year periods, to 19.6 million. 20 Well, if it increased over 5 years by 21 100 percent, to 19.6 million, that's a $10 million 22 increase over 5 years; hardly the cause of 23 Downstate's financial problems. 24 And, in fact, as we know, with the economy 25 doing better, with Tier 6, with increased revenues, 1 any employee-retirement system, what Downstate is 2 going to be required to pay for retirement payments, 3 and also for fringe-benefit payments, because, with 4 the new union contract, those are going to be 5 decreased greatly. 6 In terms of, we've already spoken about the 7 public-benefit corporation. 8 And the fears that I have, that once SUNY -- 9 that something SUNY has wanted, to privatize, and 10 that they will, again, take any foothold to do that. 11 I'm also concerned by a question which 12 Senator Rivera asked, which was about the consulting 13 firms that they have. 14 Dr. Williams answered his questions and 15 said, and he was technically right, in that, it is 16 not the same people. 17 However, it is the same firm. 18 And it's our belief that, it's Pitts was 19 in -- the Pitts Consulting Firm was involved with 20 the LICH takeover, and the planning for that, and 21 now it is LICH -- it is Pitts Consulting Firm that's 22 at the opposite end, trying to straighten up after 23 the takeover occurred. 24 Maybe different people, but it is the same 25 company. 1 And that worries us. 2 Thank you. 3 SENATOR LAVALLE: Anyone else? 4 Okay, thank you very much. 5 Really, thank you. 6 STEVE ALLINGER: Thanks. 7 SENATOR LAVALLE: Next person is 8 Helen Schaub, vice president, New York director, 9 1199 SEIU. 10 Who is your assistant? 11 HELEN SCHAUB: This is one of our members, 12 who's a respiratory therapist at LICH. She's just 13 going to be joining for a portion of the testimony. 14 SENATOR LAVALLE: Okay. 15 JEANNIE SIEGEL: Hi, my name is 16 Jeannie Siegel [ph.]. 17 How do you do? 18 SENATOR LAVALLE: Thank you for telling us 19 your name. 20 Okay, Helen. 21 HELEN SCHAUB: Am I supposed to see a light? 22 SENATOR LAVALLE: Yes, there should be. 23 HELEN SCHAUB: Can you hear me all right, 24 or -- 25 SENATOR LAVALLE: Just tap it. 1 HELEN SCHAUB: So we'll share this one. 2 So thank you very much, Chairman -- 3 Chairman Hannon, Chairman LaValle, and 4 Senator Stavisky, for having us here this afternoon, 5 and for sticking it out for a long hearing, but, 6 obviously, a lot of useful information, I think, for 7 all of us. 8 We're here representing the 230,000 members 9 of 1199 SEIU United Health-Care Workers East in 10 New York State, including 30,000 hospital-worker 11 members in Brooklyn. 12 SENATOR LAVALLE: Helen, speak into the 13 microphone. 14 HELEN SCHAUB: Sorry. Is that better? 15 SENATOR LAVALLE: Well, I can hear you, but I 16 think for the people in the back. 17 HELEN SCHAUB: Great. Okay, thank you. 18 So I'll be brief. 19 You have our written talking points, and I 20 know a lot of the points we're making here, other 21 people have made. 22 I guess I wanted to make two separate points. 23 One is, I think an earlier speaker had 24 referred to the public-consulting process over this 25 plan as "rigorous." 1 And I'm not sure many of us would 2 characterize it that way. 3 You know, the requirement for the 4 sustainability plan was obviously passed in the 5 budget at the end of March. 6 And, the first public indication of what SUNY 7 was going to put on the table was 10 days ago in the 8 public hearings. 9 We have one conversation, and I know that's 10 true of a number of other community organizations 11 and labor organizations. 12 So, I'm not sure that that process was 13 particularly rigorous. 14 And, frankly, it's been difficult to review 15 everything that was posted on a website last night 16 and be prepared to respond to it today. 17 I will point out one thing that is 18 particularly frustrating, which is that, in the plan 19 that was proposed, in the analysis, SUNY repeats an 20 error, or a mischaracterization, that has been 21 repeated a number of times, about the bed capacity 22 at LICH and about the occupancy rate at LICH, which 23 is, that they're are claiming that there's a 24 50 percent occupancy rate, I believe in 2009. 25 The only way you get to that number is if you 1 use the number of licensed beds in the facility, not 2 the number of staffed beds in the facility. 3 So, it really perpetuates a misconception, 4 you know, about LICH specifically. 5 That, it's just unfortunate that, at this 6 point in the process, and after this much dialogue, 7 we're still in a position where those sorts of 8 things are being repeated. 9 But, LICH is very close to its staffed-bed 10 capacity, and -- which was voluntarily reduced from 11 the licensed-bed capacity at the -- with the 12 permission, and at the behest of, the Department of 13 Health a number of years ago. 14 So, again, we need, I think, through this 15 process, as much transparency as possible, and as 16 much consultation as possible with all stakeholders 17 of the process. 18 And there are ways in which I believe that 19 has not been true up to this point. 20 That said, I think, you know, the diagnosis 21 of the problem, which many people have put on the 22 table today from all sides, we know is true about 23 the difficulties in Brooklyn health care, about the 24 needs of the population in Brooklyn, the delivery 25 system not being able to provide the quality care 1 that people need, you know, for a number of reasons: 2 from budget cuts, from changes in the reimbursement 3 structure, from, frankly, you know, mismanagement 4 and profiteering at a number of institutions. 5 We're in the crisis. I think everybody knows 6 what the crisis is. 7 And that we do need, as has been said, a 8 planning process that asks institutions to think 9 outside of their kind of narrow, selfish interests, 10 and towards a transformed health-care system that 11 can actually provide the care that Brooklyn needs. 12 Whether or not this public-benefit 13 corporation can be that planning process, I think is 14 a real open question, for all of the reasons that 15 people have raised today. 16 So we would say, the diagnosis is correct of 17 the problem in Brooklyn, and the prescription that 18 institutions need to behave differently, is correct. 19 Whether this PBC can drive that conversation, 20 I think is a real open question. 21 I wanted to, before I turn it over to 22 Jeannie, just say quickly, in terms of LICH, you 23 know, we represent 2,000 employees at LICH. 24 We're very pleased, after all this process, 25 that the closure plan was withdrawn. 1 We think it should be a recognition of the 2 financial viability of the hospital, which does have 3 the second-highest rate of commercial-payer 4 discharges in Brooklyn, has a lot of unique 5 services, which Jeannie will mention, but, we're not 6 out of the woods yet. 7 And that's something that brings all of us, I 8 think, here today, to express our concern. 9 JEANNIE SIEGEL: Senator Hannon, 10 Senator LaValle, Senator Stavisky, thank you for 11 allowing me to speak. 12 I'm not good with facts, and I get flummoxed, 13 but, I feel very passionate about the hospital I 14 work at. 15 I'm a respiratory therapist at LICH. I've 16 worked there for 23 years, and I work with wonderful 17 people, wonderful clinicians, people who care about 18 their patients. 19 We've had patients come from other hospitals, 20 and say, "Thank God I'm here." 21 We really do the job, and go the extra mile 22 to the greatest -- to the greatest percentage, I'd 23 say, of the workers there. 24 And while we were very relieved to see that 25 the closure plan was withdrawn, there have been so 1 many other indications of undermining happening, 2 that at this particular juncture, we're looking at 3 the house staffing withdrawn in a very short time, 4 and no clear way of how we're going to proceed 5 without that basic structure that allows our 6 150 years-plus teaching hospital to be the hospital 7 it has been. 8 There is some -- there's many rumors, 9 actually, and we've been living with rumors for the 10 last six months, in addition to all the lobbying and 11 fighting and petitioning and raffle-raising, and 12 coming to work every day to take care of our 13 patients. 14 We're a hospital under siege. 15 And we have just been working and working and 16 fighting to keep ourselves and our patients going. 17 And our patients are frightened, and we're 18 frustrated. 19 And we will continue to fight this fight, but 20 we need you to know that, as much as there's a 21 professed indication on SUNY's part that they're 22 allowing an exit strategy, and that there is no more 23 closure plan, I don't know that there's really a 24 truly viable continuance plan going on. 25 I never -- none of us ever wish to see 1 Downstate do badly, but we want all hospitals and 2 all patients to do well. 3 And I would hope that the State would be as 4 interested in seeing a hospital that serves 5 seven neighborhoods where there is no other hospital 6 close by, as well as seeing the jewel of Downstate's 7 academia, do well. 8 That patients in Red Hook are not served by 9 any other hospital except ours. And we serve the 10 court system. 11 We serve all of these new colleges that are 12 popping up, all of these new yuppy buildings; 13 there's more overbuilding in our neighborhood. 14 I've lived in Brooklyn for 60 years. I'm a 15 second-generation Brooklynite. I never thought I'd 16 see so much overbuilding of a borough. 17 I don't even recognize it anymore. 18 But, we serve the old Italians. We serve the 19 Red Hook residents. We serve the new yuppies. 20 We serve so many populations. 21 We've got 90-year-olds coming to us. 22 We've got the youngest people. 23 We've got all these amazing saves, that 24 Denis Hamill writes about in his columns. 25 I mean, we do amazing work. 1 And, we're happy and proud to do it, but we 2 can't be cut off at the knees and still do it. 3 And, we need more than a cursory glance and 4 "Yes, we won't close you, but, on the other hand, 5 over the shoulder, but we'll take away your 6 residents, and we'll make little stop gaps here and 7 there, and, we'll see if you can still get on, but 8 without this, and without this, and without this, 9 and without this." 10 Existing in an atmosphere of rumor and fear 11 is very difficult. 12 And, we'll see what happens at the end of 13 this month. 14 I know that, in February, the board that 15 licenses the residency program was told that the 16 residents would no longer be coming here. 17 So this was planned before we ever fought the 18 closure. 19 And I don't think of it so much, but, I'm 20 thinking of it now. 21 And I'm hoping that we can go forward, in 22 some fashion. 23 I love teaching the residents, I love working 24 with them. I love taking care of my patients. 25 And I hope the hospital can rebuild, because 1 we have been a great, great hospital, and I want to 2 see us come back from where we have gotten to, and 3 go back up to where I came from when I started 4 working there. 5 Thank you very much. 6 SENATOR LAVALLE: Good. 7 Thank you, Jeannie. 8 Good cheerleading. 9 [Applause.] 10 SENATOR LAVALLE: Thank you very much. 11 JEANNIE SIEGEL: Thank you. 12 SENATOR LAVALLE: Michelle Green, New York 13 State Nurses Association; 14 And Julie Semente, nurse, Long Island College 15 Hospital. 16 JULIE SEMENTE, R.N.: Can I start? 17 SENATOR LAVALLE: Okay, thank you for being 18 here and testifying before the Committee. 19 JULIE SEMENTE, R.N.: Thank you, Senators. 20 I've been a registered nurse at Long island 21 College Hospital since 1983, caring for patients in 22 the intensive-care unit and the critical-care 23 division. 24 I'm also an elected leader of the New York 25 State Nurses Association, which I know you're all 1 familiar with. 2 Today I'm speaking on behalf of my 3 colleagues, the NYSNA nurses at LICH, and my 4 patients, and thank you for affording me this 5 opportunity today. 6 Senator LaValle, you may remember me from our 7 fight to save the SUNY Stony Brook Southampton 8 Campus in 2010, and my daughter Tara who was one of 9 the six petitioners. 10 SENATOR LAVALLE: Yes, yes. 11 JULIE SEMENTE, R.N.: Well, just as we were 12 successful in preserving Southampton Campus for that 13 community, it is imperative that we succeed in 14 preserving Long Island College Hospital as the 15 full-service teaching hospital that has been so 16 important to the Brooklyn community for the past 17 155 years. 18 LICH nurses have been fighting for many 19 months to save our hospital, and we will keep doing 20 whatever we have to do to keep LICH open for care as 21 a full-service primary- and acute-care facility, 22 because we know that every day that we keep LICH 23 open, we are saving lives. 24 When SUNY withdrew its closure plan, we were 25 optimistic for LICH's future, but we also knew that 1 we had to keep working to transition to a new 2 operator because SUNY is no longer interested in 3 operating this hospital. 4 To keep LICH open as a full-service hospital, 5 we are ready to work with any new operator that will 6 put quality care for Brooklyn patients first and 7 foremost. 8 We're encouraged that SUNY's sustainability 9 plan included $129 million for the transfer of LICH 10 to a new operator, and that several operators have 11 expressed interest in running the hospital. 12 However, we haven't been informed of who they 13 are, or any intentions that there may be. 14 SUNY Downstate also still has not fully 15 disclosed their financial statements for LICH, and 16 they have continued to behave in a way that is not 17 transparent or democratic, including holding a 18 so-called "town-hall meeting" instead of 19 participating in meaningful consultation with NYSNA 20 and the our LICH stakeholders, to give us a voice in 21 the process as they have allowed for the 22 University Hospital stakeholders. 23 Downstate has also, in the midst of 24 withdrawing the closure plan, they withdrew our 25 residency program. 1 So, very nice that we are not going of have 2 the hospital closed, but I don't know how we'll keep 3 it open without doctors in the hospital. 4 And those physicians are UUP members. 5 As a LICH nurse, I can tell you that our 6 hospital is viable, and it's primary, acute, and 7 emergency services are very much needed in our 8 community. 9 As you heard, Brooklyn is the fastest-growing 10 borough in New York City, and most of the new 11 real-estate development is concentrated in the 12 downtown-area neighborhoods that specifically are 13 served by LICH. 14 In addition to all the new housing and 15 commercial development, the 18,000 seat 16 Barclay Center is nearby, and one-third of the 17 people needing emergency care at the stadium are 18 already being treated at LICH. 19 The revitalized and expanded 20 Brooklyn Bridge Park is just steps from our front 21 door. Even before the expansion, the park received 22 more than 60,000 visitors on any average weekend. 23 And LICH is the only full-service hospital in 24 this entire area serving a wide swath of Brooklyn, 25 with tens of thousands of residents, workers, and 1 visitors. 2 We should be investing in quality care for 3 our expanding population, instead of cutting 4 services. 5 In times of crisis, LICH has always been 6 essential to the Brooklyn community, and beyond. 7 From the time of the World Trade Center 8 attacks, the recent ferry crash in the docks at 9 lower Manhattan, LICH is the closest hospital 10 outside of Manhattan. 11 And, we cared for many evacuees from 12 "Hurricane Sandy," and, were able to accept many 13 patients that were in hospitals that were in harm's 14 way. 15 This past winter, from December to January, 16 over 1,000 patients were cared for at LICH as the 17 city suffered from the worst flu epidemic in recent 18 history. 19 It should be clear that in cities such ours, 20 we need more hospitals like LICH that are prepared 21 to handle large-scale catastrophes, not fewer of 22 them. 23 And as someone testified earlier today, that 24 hospital closures are based on whether the hospital 25 is utilized? 1 Well, our hospital is highly utilized, and 2 has a reputation for providing exceptional quality 3 care. 4 In the "2012-2013 U.S. News and World 5 Report," 69 LICH physicians were ranked as being 6 among the best in the nation. 7 The same report ranks LICH as the 8 second-safest hospital in Brooklyn. 9 Our pulmonary, neurology, nephrology, and 10 neurosurgery departments were ranked close to the 11 top and are nationally known. 12 LICH is consistently averaging an occupancy 13 rate of 90 percent capacity of its staffed beds, and 14 we serve patients, not only from the surrounding 15 neighborhoods, but from throughout all of Brooklyn; 16 also Staten Island and Queens. 17 Last year LICH's emergency room treated 18 58,710 patients, and 15,812 patients with discharged 19 from its inpatient units, many of them children. 20 Other Brooklyn emergency rooms are already 21 overcrowded and understaffed. 22 If LICH closes, or, ceases to be a 23 full-service hospital, this system in Brooklyn will 24 be stretched beyond capacity, and that borough's 25 patients will not receive the care that they need. 1 Hospital closures impact everyone, but they 2 do the most harm to low-income communities and 3 communities of color that are already medically 4 underserved. 5 Red Hook, Brooklyn, is a federally designated 6 health-care professional-shortage area, and it's 7 residents depend on LICH for all of their primary, 8 acute, and emergency health care. 9 Fifteen New York City hospitals have closed 10 in the past four years, and now four Brooklyn 11 hospitals are at risk, including LICH and SUNY 12 Downstate. 13 Hospitals across the city have faced 14 financial distress, and services have been cut 15 without regard to community needs like those of the 16 Red Hook residents. 17 We must keep LICH, Downstate University 18 Hospital, and our Brooklyn hospitals open for care. 19 We're encouraged that Governor Cuomo is 20 seeking federal assistance for financially 21 distressed hospitals in Brooklyn, and we will 22 continue to work with state and federal elected 23 leaders on solutions to secure funding to keep our 24 hospitals open. 25 We know that LICH is a good hospital, and 1 that it will continue to provide quality care to 2 Brooklyn patients as a full-service hospital for 3 another 150 years if it's marketed and managed 4 properly. 5 So let's work together to ensure that a new 6 operator can come in, and will be committed to doing 7 just that. 8 Any sustainability plan implemented by SUNY 9 and approved by the State must guarantee that our 10 full hospital at LICH, not just pieces of it, stays 11 open for care. 12 Our community needs its full-service 13 primary- and acute-care facility. 14 We cannot allow our hospital to be sold off 15 for its real-estate value. Our patients' lives are 16 more important than any real estate. 17 As a nurse, my job is to care for the 18 patients at their bedside, and it is also to 19 advocate for them in every way that I can. 20 And this year, I have done that through 21 blizzards and marching across Brooklyn, early 22 morning interviews with TV reporters, bus rides to a 23 hearing in Purchase, and a couple of times, coming 24 up to Albany to testify. 25 Brooklynites deserve access to quality 1 hospital services, and they should not have to go to 2 another borough to obtain that. 3 So, I'm here today for my patients. 4 I'm asking you to work with, my union, the 5 New York State Nurses Association, myself, and every 6 other advocate for Brooklyn patients, to preserve 7 LICH as a full-service primary-, acute-care, 8 hospital, and to keep LICH, SUNY Downstate, and our 9 Brooklyn hospitals open for the care of Brooklyn. 10 Thank you. 11 [Applause.] 12 SENATOR LAVALLE: Thank you. 13 Ms. Green. 14 MICHELLE GREEN: We'd be happy to answer any 15 of your questions. 16 SENATOR LAVALLE: No, I think we're -- I 17 think Julie nailed it. 18 JULIE SEMENTE, R.N.: Thank you, 19 Senator LaValle. It's a pleasure to see you again. 20 SENATOR LAVALLE: Whoa, whoa, wait. Wait, 21 wait. 22 SENATOR HANNON: Could I just ask a question? 23 JULIE SEMENTE, R.N.: Oh, yes, sir. 24 SENATOR HANNON: You're the first one to come 25 before us today who has actually been there for a 1 while. 2 JULIE SEMENTE, R.N.: Yes, sir. 3 SENATOR HANNON: And I'm just wondering if 4 there were any perceptions by those of you who were 5 there, and while you're working hard, as to what 6 they could have done better so they weren't 7 supposedly losing money. 8 JULIE SEMENTE, R.N.: They could have billed. 9 They could have collected the payments. 10 For the first -- for instance, for the first 11 18 months, since -- when SUNY took over in 2011, for 12 the first 18 months -- I mean, they announced not 13 too long after the first 18 months that they want to 14 close it. 15 But for the first 18 months, no patient in 16 our emergency room fast-track was charged for -- was 17 billed for a service. 18 They -- apparently, the administrative things 19 that had to be done to get our physicians on a 20 panel, so that insurance companies could recognize 21 them, and Medicare and Medicaid could recognize 22 them, and submit the payment, that didn't happen. 23 So none of our doctors were recognized by 24 Medicaid, Medicare, insurance companies. 25 And for 18 months, the emergency room was 1 providing free service. 2 SENATOR STAVISKY: Why? 3 JULIE SEMENTE, R.N.: That is not the only 4 issue, but that's the first one that comes to my 5 mind. 6 SENATOR STAVISKY: Why is that? 7 MICHELLE GREEN: They weren't credentialed. 8 SENATOR HANNON: There's a whole -- 9 MICHELLE GREEN: There wasn't credentialed. 10 There's also -- there is another billing 11 problem, which is, that there's contract with 12 Continuum to bill. 13 And for the last year that we have any 14 accurate records, that would be 2011, the accounts 15 receivable was 104 days. 16 In the business, it should be, 20s, 30s. 17 SENATOR HANNON: 30s. 18 MICHELLE GREEN: Yeah, and so we're talking 19 about a lot of money being left on the table. 20 I just want to add one other thing. 21 Julie and I attended a meeting with the state 22 comptroller, I believe it was in February? 23 JULIE SEMENTE, R.N.: February 6th. 24 MICHELLE GREEN: February 6th. 25 Thank you, Julie. 1 JULIE SEMENTE, R.N.: State comptroller's 2 associates. 3 MICHELLE GREEN: Yes, the staff of the state 4 comptroller's who prepared the report. 5 And one of things we learned, was that the 6 state comptroller was asking Downstate for -- since 7 last summer, for a business plan. 8 "What is your business plan?" 9 It was never produced. 10 If there was a business plan, it was never 11 provided to the state comptroller when they did 12 their inspection. 13 If there wasn't a business plan, it explains 14 a lot. 15 We saw no indication that there was a clear 16 business plan to run this hospital, to collect 17 money, to plan services. To change services, for 18 that matter. 19 There was nothing. Nothing out there. 20 SENATOR STAVISKY: And Continuum was aware of 21 this? 22 MICHELLE GREEN: It was SUNY who -- 23 SUNY Downstate, would have -- was running the 24 hospital. 25 University Hospital and LICH are one 1 hospital, in a sense, with two campuses. 2 It's actually a third campus, with the old 3 Victory Memorial in Bay Ridge. 4 So, yeah. 5 SENATOR STAVISKY: So SUNY was aware of this? 6 MICHELLE GREEN: They were doing, or not 7 doing it. 8 It was them. 9 SENATOR LAVALLE: Yeah, it was. 10 MICHELLE GREEN: Yes. 11 So our feeling was, before the closure plan, 12 we knew there were financial problems. They were 13 pretty obvious. 14 We felt that those financial problems were 15 not insurmountable. That a good business plan, a 16 smart business plan; there's some real assets in 17 this hospital. 18 One is the payer mix. 19 We have one-third -- the highest private 20 patient-payer mix in the borough of Brooklyn. 21 So there are some definite assets that could 22 have been played upon to improve the business 23 prospects of the hospital -- performance of the 24 hospital, rather. 25 SENATOR HANNON: That's been very useful and 1 insightful. 2 Now let me make it even more difficult, 3 though. 4 What before the acquisition of LICH by 5 Downstate, what was going on there that caused that 6 to be in financial trouble? 7 JULIE SEMENTE, R.N.: That -- well -- 8 SENATOR HANNON: And you -- by the way, this 9 is only observational, anecdotal. 10 JULIE SEMENTE, R.N.: Observational. 11 SENATOR HANNON: This is not part of your job 12 description all, I understand that. 13 [Laughter.] 14 JULIE SEMENTE, R.N.: Okay. 15 Well, the scuttlebutt was, what seemed to be 16 happening, was that, we were working, we were 17 bringing in patients, we were providing services -- 18 You're talking about when we were under 19 Continuum; right? 20 -- and we were seeing nothing for it. 21 It seemed that outpatients were being 22 redirected from our hospital, to Beth Israel, to 23 other Continuum facilities, and, it seemed like 24 that's where our money was going. 25 So what we feel, and I don't want to -- I 1 probably shouldn't say it, but I'm going to say it 2 anyway, we felt we were -- Continuum was raping, 3 pilfering, and plundering LICH. 4 And that -- I will not be the only one who 5 can tell you -- who would tell you that. 6 So that -- LICH was allowed to just lie 7 fallow -- 8 I stole your words. 9 -- lie fallow, and nothing was done with it. 10 And whatever we were bringing in, seemed to 11 be going to the flagship hospital in Brooklyn -- in 12 Manhattan. 13 So -- and then, just before the SUNY merge, 14 Continuum wanted to close down our maternity -- our 15 women's and children's and dentistry services. 16 And they were denied by the Department of 17 Health, who said that the -- those services could 18 not be adequately provided in the area by anybody 19 else, so, they would not allow those service to 20 close. 21 So then the second plan came about, to give 22 the hospital to SUNY. 23 SENATOR HANNON: Thank you. 24 MICHELLE GREEN: Thank you. 25 JULIE SEMENTE, R.N.: Thank you. 1 SENATOR HANNON: Very insightful. 2 SENATOR LAVALLE: Julie, I just wanted you to 3 know, since Senator Hannon opened the door, that I'm 4 well aware of Long Island College Hospital. I lived 5 in the shadow there, on Henry Street, so I'm well 6 aware. 7 And have stitches to prove it. 8 [Laughter.] 9 JULIE SEMENTE, R.N.: Assemblyman Thiele just 10 had his first grandson there. 11 SENATOR LAVALLE: That's right. 12 JULIE SEMENTE, R.N.: And had a wonderful 13 experience, and sent me a note. 14 SENATOR STAVISKY: And they both paid. 15 [Laughter.] 16 SENATOR LAVALLE: Okay, thank you. 17 SENATOR STAVISKY: Thank you, Michelle. 18 SENATOR HANNON: I'm sorry, I'm really going 19 to drive you crazy. 20 The question keeps coming up: Is Continuum 21 still there doing the billing? 22 JULIE SEMENTE, R.N.: Yes. 23 (Many gallery members say "Yes.") 24 JULIE SEMENTE, R.N.: That's a big part of 25 the problem. 1 SENATOR HANNON: You know, when you get all 2 these -- 3 (Many gallery members shouting out 4 comments.) 5 SENATOR HANNON: When you get all these 6 studies, and even when you get what the consultant, 7 Mr. Hicks [sic], did, and I've been looking 8 through his website, it's a fascinating amount of 9 statistics, you don't get the same feel that we've 10 just gotten to this testimony. 11 So I just wanted to ask that question. 12 Thank you. 13 [Applause.] 14 JULIE SEMENTE, R.N.: Well, thank you very 15 much. 16 Oh, yeah. 17 Dr. Williams mentioned that we were -- LICH 18 was in the hole for 4.5 million a month. 19 We're paying Continuum approximately 20 3 million a month to provide those criminally 21 negligent services. 22 SENATOR LAVALLE: Well, maybe that's 23 something, and I have some inside information. 24 So, your scuttlebutt, or however you want to 25 characterize it, is not far off the mark. 1 And maybe we have to drill down, as a 2 Committee, to find what's going on there. 3 MICHELLE GREEN: Well, thank you. 4 We would appreciate that. 5 SENATOR LAVALLE: Elizabeth Swain, who's 6 president, the Community Health Care Association of 7 New York State. 8 SENATOR HANNON: And let me add, 9 Elizabeth Swain, who was also part of the 10 Medicaid Redesign Team, and who is part of the 11 Brooklyn Medicaid Redesign Team. 12 So, thank you very much for taking the time, 13 and being so patient. 14 SENATOR LAVALLE: So which hat are you here? 15 Under your Community Health Care Association, 16 that's the hat you're wearing today? 17 ELIZABETH SWAIN: Yes. 18 SENATOR LAVALLE: Okay. 19 ELIZABETH SWAIN: I will -- I will clarify 20 that. 21 But, I appreciate the acknowledgment that I 22 did serve on the MRT, as well as the Brooklyn -- as 23 we call it, the "Brooklyn MRT." 24 We also hope that you all have a copy of the 25 planning document that we just released in April. 1 SENATOR LAVALLE: Yes, yes. 2 SENATOR HANNON: Yes, but I just saw it 3 today. 4 ELIZABETH SWAIN: Okay. We're trying to -- 5 we're, literally, launching it right now. 6 I'm going to talk about it today. 7 So, good morning -- oh, actually, sorry, good 8 afternoon. 9 My name is Elizabeth Swain. I am the 10 president and CEO of Community Health Care 11 Association of New York State. 12 Thank you so much, Senator LaValle, 13 Senator Hannon, and Senator Montgomery for being 14 here, to hear my remarks. 15 SENATOR HANNON: Elizabeth, let me tell you, 16 we're going to get nervous, because we're supposed 17 to have session in 15 minutes. 18 ELIZABETH SWAIN: Okay. So I'm going to go 19 through my remarks very quickly. 20 SENATOR HANNON: If you can give us the 21 highlights, as if you would be having a conversation 22 with us at the end of the day, telling us, 23 "These are the points I want you to remember." 24 ELIZABETH SWAIN: Yes. 25 SENATOR HANNON: It would be enormously 1 beneficial, and I promise to read the whole report 2 and all your remarks. 3 ELIZABETH SWAIN: Okay, wonderful. Thank 4 you. 5 So, I was going to wow with you the 6 accomplishments of the association, and the fact 7 that we are -- our primary-care network in 8 New York State provides care to 1 1/2 million people 9 across the state. And, we're also providing 10 services to Brooklyn residents, obviously. 11 We have -- 12 SENATOR HANNON: Can we just have one 13 conversation going on, because we want to listen to 14 Elizabeth. 15 Thank you very much. 16 ELIZABETH SWAIN: Thanks. 17 I didn't know whether I was -- 18 SENATOR HANNON: No, no. You were good. 19 You're good. 20 ELIZABETH SWAIN: So bottom line is, that we 21 don't talk about primary care enough. 22 And though the hospitals are now recommending 23 lots of primary-care initiatives, [unintelligible], 24 of course, that we're in the process of transforming 25 the system, and primary care has become the darling 1 now, when we were -- we never really discussed 2 before. 3 Community-based primary care that's not based 4 out of an ambulatory-care hospital setting is a very 5 different kind of model of care. 6 And we think that we need more of our 7 community-based, as well as hospital-based. I mean, 8 that's sort of getting to the nugget of what we want 9 you to understand. 10 Strengthening and expanding primary care is 11 in a [unintelligible] health-care-system 12 restructuring. 13 And we were concerned that we didn't see a 14 more detailed plan presented in the sustainability 15 plan that was presented by SUNY Downstate, that 16 would really link -- take up some of the 17 recommendations that the Brooklyn -- that the 18 Berger-Brooklyn folks made, and that we're also 19 making. 20 These things don't happen at the end of the 21 day. They really need be happening at the beginning 22 of the day. 23 And if they don't get built in at the front 24 end, then they simply get left out, because the 25 hospital-based services are so much more expensive, 1 and high volumes of ED utilization are not something 2 that I would brag about. 3 We know, through the Brooklyn report -- 4 through the Berger view of Brooklyn hospitals, that 5 half of the ED visits in Brooklyn are 6 ambulatory-care sensitive visits; i.e., they didn't 7 need to happen in an ED. 8 And that's continuing to get worse, not 9 better. 10 We're not doing anything to really get to the 11 heart of driving restructuring by incentivizing 12 high-quality primary care. 13 We're leaving it to the end of the 14 discussion. 15 You know, we thought we would have, 16 1115 Waiver dollars. There was one and a quarter 17 billion dollars to transform our primary-care system 18 in the state. We knew a lot of that would go to the 19 highest-need areas; i.e., Brooklyn. 20 That -- who knows what's gonna happen with 21 that, but we simply cannot not do this, 'cause we 22 continue to reinvent the problem, and -- rather than 23 the solution. 24 The good news is, that in the past several 25 years, since the feds started investing more in 1 primary care in New York, through the -- first 2 through the Stimulus Bill, and then through the 3 rollout of the Affordable Care Act, we've seen, in 4 2011, about 218,000 Brooklyn residents receive care 5 in -- at an FQHC, at our "federally qualified health 6 centers," which represent a 39 percent increase from 7 2006. 8 So we're seeing growth in our Brooklyn 9 FQHCs. 10 FQHC expansion was greater in the 11 six United Hospital Fund neighborhoods that 12 comprised the 21 ZIP codes in north and central 13 Brooklyn, which saw a 49 percent increase in FQHC 14 caseloads over those five years, compared to a 15 25 percent increase elsewhere in Brooklyn. 16 So we're actually seeing growth in the areas 17 where we need to see the growth; where the numbers 18 of the inappropriate ED and hospital admission and 19 re-admission rates are so high. 20 And by comparison, FQHC patient volume grew 21 by 36 percent citywide, and 31 percent statewide. 22 So, the good news is, it's growing -- we're 23 growing the FQHC volume all over the state. 24 The model of care at an FQHC is very 25 different than it is in an ambulatory-care setting 1 or a resident clinic in a hospital, because we're 2 providing a comprehensive set of services in an 3 FQHC, working -- so we're doing medical, dental, 4 behavioral health, substance abuse. We coordinate 5 care, and we manage chronic disease, with very 6 high-need, expensive, and very sick populations. 7 We're serving the hardest-to-serve, most 8 expensive people in the system at a fraction of what 9 it costs in another setting, and we're coordinating 10 that care with specialty in-hospital programs. 11 So when you incentivize a hospital, or 12 freestanding medical practice, to work with an FQHC, 13 you're buying that relationship, and all of that -- 14 all of those connections that have been established, 15 that provide the high -- the high -- you know, the 16 results that we're talking about. 17 SENATOR HANNON: So hard is to it determine 18 where you need new FQHCs? 19 You got to -- now, someone just took the map 20 down, but we had a map of Brooklyn. 21 ELIZABETH SWAIN: Well, it's -- if we had -- 22 we've have done that. This report does that. 23 SENATOR HANNON: You're familiar -- 24 ELIZABETH SWAIN: Yeah, yeah. 25 SENATOR HANNON: -- with the whole map of the 1 hospitals, knowing their discharge, knowing the 2 ERs, and then, where we have existing FQHCs? 3 ELIZABETH SWAIN: Yeah. 4 SENATOR HANNON: Is there a way of saying: 5 "Okay, the population that's going to an ER 6 someplace is coming from this neighborhood. We 7 should have an FQHC at that place"? 8 ELIZABETH SWAIN: Yes, we have -- we've now 9 established a data and analytics tool through this 10 work, that was funded by the New York State Health 11 Foundation, and through a partnership with the 12 State of New York. We can now do that. 13 So, we will go into a community in Brooklyn, 14 or in Buffalo, or in the Adirondacks, and we'll be 15 able to work with the community organizations, or, 16 provide them with the data that we've already 17 collected. 18 It's a lot of different data sets. 19 So we looked at, not just where we need new 20 services, but we've also looked at where there are 21 existing services that are underutilized; or, 22 understaffed, because we have a shortage of 23 primary-care providers. 24 So, you might have a health center that has 25 three vacancies out of four or five positions, so 1 you've got to look at staffing up. We've got to put 2 much more into focusing on getting the right 3 health-care providers into those settings. 4 We need to do new -- we found some 5 primary-care deserts across the state. We know 6 where they are, and we've outlined where those 7 completely unserved areas are. 8 But, in Brooklyn, you -- Brooklyn has a -- is 9 underdeveloped in primary care, but, we have to do 10 it in certain ZIP code areas where the folks are 11 going to go for care. 12 So, it's not just going to help to put a 13 whole lot of new resources in a part of Brooklyn 14 where folks don't -- aren't typically going to go. 15 So, we've looked at growth and 16 sustainability. 17 Sustainability factors include: What does it 18 take to get a health center stable, so that you're 19 not constantly losing -- you know, losing money and 20 struggling to keep your business open. 21 So we really -- sort of, we've done the 22 capacity and the sustainability factors, which is -- 23 So we plan to roll this effort out. 24 We're very interested in working with the 25 rest of the health system and the community in 1 Brooklyn to do that. 2 We're already doing that, so, we'll continue 3 to do that. 4 That's the reason we did the work. 5 Now is -- you know, we really believe now is 6 the time. 7 Waiver dollars or no waiver dollars, we have 8 federal dollars that are coming into the system, and 9 we have an exchange that's about to be implemented 10 and opened. And we've got a lot of newly insured 11 people who are going to be needing access to primary 12 care. 13 SENATOR HANNON: Is the way to establish an 14 FQHC too difficult because of the requirements; who 15 has to be on the board, and the plan, and all of 16 that? 17 ELIZABETH SWAIN: You know, we don't think 18 that there's a need to start a lot of new FQHCs. 19 An existing FQHC can build new satellites, 20 or, expand its service area. 21 There are few places in the state where 22 that's not true, like, you know, Long Island. 23 SENATOR HANNON: We have Hudson taking over 24 the Suffolk County clinics. 25 ELIZABETH SWAIN: Right, so Hudson is a great 1 example of an existing FQHC that's able to do -- to 2 take their license, if you will, and put it 3 somewhere else. 4 We don't think that we need to start a lot of 5 new FQHCs, and particularly in the city, in 6 well-populated areas. 7 We do have the Southern Tier, and some other 8 parts of the state, that are underserved, and we 9 need new organizations. 10 There's -- the only really brand new FQHC -- 11 and we got $25 million in new FQHC dollars last year 12 from the feds. That's an annual figure. 13 The only brand new one was out in western 14 New York. Brand new. 15 But, we want -- but we need to expand them, 16 and we need to create reasons why it would be a good 17 idea for some of these programs to consolidate 18 resources. 19 We don't want a lot of new, little, or big, 20 expensive administrative structures. 21 We have plenty of that. 22 And that's definitely the same issue we have 23 with hospitals. 24 We need to consolidate resources; come 25 together, do things in shared ways; integrate 1 services; get larger organizations, you know, to 2 take some risk; so that we're prepare for the new 3 model of care, which is really going to be 4 evaluating. 5 We're going to be providing services based on 6 what we can produce, what the outcomes of our work 7 are. Not how many services we're providing, but, 8 whether our population is healthier than it was last 9 year, or whether we're keeping people out of the 10 hospital. 11 And we have the same pressures at the 12 primary-care side that the hospitals have at their 13 side, so we're certainly in this together. 14 Let's -- you know, let's design systems that 15 are hard-wired together. 16 So, we, in response to the SUNY Downstate 17 sustainability plan, again, to restate what I said 18 at the beginning: 19 We would like to see a delivered effort to 20 build federally qualified health centers, with the 21 quality model that they represent, into any solution 22 in Brooklyn. 23 SENATOR MONTGOMERY: Could I just ask a quick 24 [inaudible], just to follow up with Senator Hannon's 25 question? 1 SENATOR LAVALLE: Senator, would you use your 2 microphone. 3 SENATOR MONTGOMERY: Thank you, Mr. Chairman. 4 To follow up on Senator Hannon's question: 5 Is there also a question of appropriate 6 reimbursement rates, related to the sustainability 7 of the FQHC facilities? 8 ELIZABETH SWAIN: FQHCs have a unique 9 Medicaid reimbursement rate, a cost-based 10 reimbursement rate, that's based on a federal law 11 that was established in 1988. 12 So, it's one the reasons -- one of the other 13 reasons why everybody is interested in creating 14 FQHCs, so that the reimbursement rate is there. 15 But remember what I said earlier: We provide 16 a whole set of services to folks, a comprehensive 17 set of services. We also care for 25 to 50 percent 18 uninsured people, depending on, you know, what 19 you -- where you're located. 20 So, the reimbursement rate that FQHCs have, 21 that's shared by the State and the feds, is 22 something that everybody wants, but it comes with an 23 expectation that you provide high quality. 24 And there are clinical benchmarks that you 25 have to establish. You can't -- and you have to 1 have relationships with hospitals in speciality 2 programs, so that your patients, particularly your 3 uninsured patients, are protected from -- you know, 4 from losing access to care as soon as they walk out 5 of your door. 6 So it's really a great set of services with a 7 lot of expectation. 8 And the feds and the State work together to, 9 keep it -- to monitor it, and keep it at a high -- 10 it's a 40-year-old model that started in the late 11 '60s. 12 SENATOR MONTGOMERY: Okay. Thank you. 13 Thank you, Mr. Chairman. 14 SENATOR LAVALLE: Thank you, Elizabeth. 15 For every hearing, there's a beginning, and 16 there is an end. 17 And the last person always gets the deepest 18 respect and admiration for being the last person. 19 This hearing has gone on for, what is it, 20 five hours? 21 Five hours. 22 So, Elizabeth Wong -- 23 GRACE WONG: Grace. 24 SENATOR LAVALLE: Pardon me? 25 GRACE WONG: Grace. 1 SENATOR HANNON: "Grace." 2 SENATOR LAVALLE: Grace. I'm sorry. 3 I'm sorry, I'm sorry. 4 Grace Wong, who's the vice president of 5 managed care and clinical business at SUNY 6 Downstate. 7 I'm sorry, Grace. 8 GRACE WONG: That's okay. 9 DOROTHY FIFE: And I am Dorothy Fife. I'm 10 associate vice president for policy and planning at 11 Downstate, and part of the BHIP study. 12 SENATOR HANNON: And, which school are you 13 part of there? 14 DOROTHY FIFE: SUNY Downstate Medical Center. 15 SENATOR HANNON: No, no. But, medical -- 16 you're medical? Not public health school, not -- 17 DOROTHY FIFE: No. 18 The central administration. 19 SENATOR HANNON: Central administration. 20 Okay. 21 SENATOR LAVALLE: Okay, Grace. 22 GRACE WONG: Okay, so, good afternoon. 23 I'm Grace Wong, the principal investigator of 24 the Brooklyn Health Care Improvement Project; and 25 also the vice president of clinical business and 1 managed care for SUNY Downstate Medical Center. 2 Prior to Downstate, I actually spent two 3 decades in hospital administration, public finance, 4 consulting, and I was a vice president of managed 5 care for a large hospital system in New York City. 6 So I'm here to support and advocate the 7 SUNY Sustainability Plan. 8 So, you know, for those of you not familiar 9 with the Brooklyn Health Care Improvement Project, I 10 just want to give you a little bit of brief 11 background. 12 I will summarize it for you, okay, so I'm 13 glad that you have that copy. I'm really happy 14 about this. 15 So BHIP was fund by HEAL NY -- by New York 16 State Department of Health -- back in 2009. 17 So the goal is to develop a comprehensive 18 community-planning process, and, to articulate the 19 health-care vision for central and northern 20 Brooklyn, and, also recommends how that vision is 21 going to be implemented. 22 So our final report, making the connection to 23 care in central and northern Brooklyn, was 24 introduced in August last year. 25 Now, central and northern Brooklyn, most of 1 you know, is covered for 15 ZIP code area, of 2 22.2 square miles. 3 Okay, these are the neighborhoods of east 4 New York, Crown Heights, Bushwick, East Flatbush, 5 [unintelligible], and, you know, among others. 6 The area had a population, a million, which 7 translate into 5.2 percent of New York State 8 population. 9 81 percent of the population are minorities. 10 Now, a substantial portion of which came from 11 lower socioeconomic status, and more than 12 35 language were spoken there. 13 Now, BHIP partners are composed of more than 14 30 organizations, including: 15 Six area hospitals; 16 Nine major insurance carriers; 17 You have the community-based organizations; 18 You have the federal qualified health 19 centers; 20 Brooklyn Chamber of Commerce; 21 Brooklyn Borough President's Office. 22 New York City Health and Mental Hygiene; 23 Primary Care development Corp.; 24 SUNY Downstate School of Public Health; 25 As well as, Brooklyn Health Disparities 1 Center; 2 And the pharmaceutical company, Novartis. 3 So, it's a multi-stakeholder. 4 Now, through our three years' concerted 5 efforts of coalition building, intense research, and 6 monthly meetings, we actually obtained approval from 7 all six hospital institutional review board; 8 We hire and train more than 100 surveyors; 9 We actually conducted a 15- to 20-minute 10 interviews, for 11,600 patients, and 400 providers, 11 in the ED at Kings County University Hospital 12 Brooklyn, Kings Brook Jewish, Interfaith, Brookdale, 13 and [unintelligible]. 14 Additionally, we conducted a block-by-block 15 survey of all of the health-care providers in the 16 study areas, and analyzed millions of records, from 17 the [unintelligible] dataset, and actually claims 18 data from our insurance-company partners. 19 What we found, is that more than 43 percent 20 of the patients surveying, they actually stated 21 that, they didn't come here for emergency care -- 22 non-emergent care. 23 The main reason, were that the prevalence for 24 one-stop shopping, and the difficulty in assessing 25 primary care. 1 ED utilization for this population was almost 2 double than the non-studied Brooklyn neighborhoods, 3 and the admission rate was 47 percent higher, and, 4 potentially avoidable hospital admissions is 5 actually even higher, at 65 percent. 6 It -- you know, although the health-care 7 dollars spent on this population is extremely high, 8 but, however, it has some of the worst health status 9 in the state. 10 It has the highest incidence of high blood 11 pressure, heart disease, diabetes, HIV/AIDS, and 12 infant-mortality rates. 13 17 percent of the ED patients who enroll in 14 the Medicaid Managed-Care Plan, has -- they didn't 15 know that they have a PCP. 16 We all know, by New York State law, if you 17 are enrolled in a Medicaid Managed Care Plan, you 18 have a PCP. 19 If you don't want to choose a PCP, the State 20 is going to auto assigned you one. 21 But, however, the law did not require you to 22 see a PCP when you qualify for Medicaid. 23 So, from our block-by-block survey, we find 24 out 22 percent of the provider they list in the 25 provider directory from the insurers, were 1 inaccurate. 2 So, why the patient are crying out loud for a 3 accessible quality care, our providers are also 4 crying out loud for more patients. 5 So we know the Brooklyn health care is indeed 6 broken, and urgently needs a game-changing solution. 7 The vision of BHIP is to ensure access to 8 affordable, quality, and timely care for all 9 residents of northern and central Brooklyn, 10 effectively eliminating disparities in health-care 11 outcome through a coordinated health-care-system 12 planning process, and engages and fosters 13 collaboration among multi-stakeholders. 14 Now, the SUNY plan offers real solutions to 15 implement our vision and transform the health-care 16 landscape in Brooklyn. 17 The provider system in central and 18 northern Brooklyn is in dire need to be 19 restructured, rightsized, streamlined, simplified, 20 connected, and coordinated, to meet patient 21 health-care needs and become financially stable. 22 While the insurance market is consolidating 23 to achieve economy of scale and mass clout to deal 24 with large provider network, Brooklyn hospitals and 25 locations with better pay [unintelligible] aligned 1 with the rich resourced hospitals in Manhattan or 2 the Bronx. 3 Safety-net hospitals in our study area, 4 however, elect to struggle individually on their 5 own. 6 Without the bargaining power of network, 7 safety-net facilities not only suffer lower 8 reimbursement rates, the costs are actually higher 9 because the patient had more needs. 10 They may not have transportation 11 [unintelligible] charged, money for prescription, 12 and -- you know, or anyone to care for them when 13 they get home, which complicates discharge planning, 14 and actually leading to increased length for stay, 15 unnecessary admissions/re-admissions, and lots of 16 placement issues, which are not fully reimbursed. 17 Why the [unintelligible] did not squarely 18 address poverty, it is the [unintelligible] 19 health-care-system transformation. 20 Through the creation of a Brooklyn-based 21 provider network, that expands primary care, joints 22 contracting, IT linkages, and [unintelligible] 23 integration, we can start managing our population, 24 form the ACOs. and actually share the gain with the 25 insurers, by reducing admissions and utilization, 1 and for better health and better care. 2 The system cannot self-correct. It needs 3 new, fresh, resources and intervention. 4 New York State -- 5 SENATOR LAVALLE: Resources, like money? 6 Yes? 7 GRACE WONG: Yes. 8 SENATOR LAVALLE: Okay. 9 GRACE WONG: New York State can play a major 10 role, money and legislation, to do things. 11 New York State can play a major role, and 12 anchor entities, such as Brooklyn Health Care 13 Improvement Public-Benefit Corp., backed by the 14 in-depth research engine of SUNY, and leadership in 15 coalition building can lead this effort, and trap 16 performance and monitor progress. 17 Now, health-care transformation will not 18 succeed with active patient engagement, empowerment, 19 and education. 20 The Brooklyn Healthy [sic] Improvement 21 Public-Benefit Corp. can mobilize grassroots' 22 involvement, amount churches, schools, 23 community-based organizations, hair salons, and the 24 like. 25 SUNY Downstate will continue to train members 1 of this community to be health-care providers, who 2 most likely will stay and serve the community. 3 Health educators and patient navigators will 4 be trained to help our community in negotiating the 5 fast-changing health-care landscape and ever 6 confusing terms, such as, "Medicaid Health Home"; 7 "Hospital Medical Home"; "Patient-Centered Medical 8 Home." 9 Now, for our patient, as far as our patient 10 concerned, home is where you go to sleep. 11 And, registrars in the ED and admitting 12 office for the safety-net facilities, they all know, 13 for the homeless population, their home address are 14 the hospitals where they land. 15 Prior to SUNY Downstate, I was the 16 vice president of managed care of 17 New York Presbyterian Hospital and its affiliate 18 institution. 19 Also, the CFO of the New York Hospital 20 Community Help Plan, where I actually consolidate 21 all the managed-care departments of this 22 multi-hospital system into a single contract entity. 23 I know firsthand the difference between a 24 powerful network and standalone facility, and how 25 insurers treat them. 1 We can provide the same service, but require 2 more resources for our high-need population where we 3 get paid less. 4 It is a [unintelligible], the rich get 5 richer, the poor get poorer. 6 The SUNY plan is sound and well thought out. 7 As health providers and policymakers, we need 8 determination and conviction to execute the SUNY 9 plan, which will ensure the continuation of 10 medical- and health-professions education, and the 11 creation of a better health-care system, for one of 12 the most underserved community in the state. 13 Thank you for this opportunity to testify. 14 I trust, as public officials, this also your 15 passion to be in public service, to right the wrong, 16 to strike a balance between public interest, and 17 fight for equity, and justice for all. 18 It is our hope that you will endorse the SUNY 19 plan. 20 And the action -- the time for action is now. 21 Thank you. 22 SENATOR HANNON: One quick question. 23 GRACE WONG: Yes. 24 SENATOR HANNON: Did you tell the 25 Health Department about 22 percent of the provider 1 plans have listed the wrong people? 2 GRACE WONG: They know. 3 Yes, they are aware of that. 4 As a matter of fact, August last year, we 5 spent two hours on our BHIP report; actually went 6 through that with the Department of Health, you 7 know, to show them what can that happen. 8 Why this -- you know, when we go through the 9 neighborhood, we actually went through 10 block-by-block survey, with all of providers. 11 And we actually find out there's a location 12 they de-certed. There are no doctors there, but 13 it's listed in the directory. 14 So we actually communicated that with our 15 insurance partners, and saying, that: Look, guys, 16 you better start changing your directory, update 17 them. 18 We also informed the Health Department that 19 something is important. You know, you have a 20 provider directory, you look at it, you think that 21 you have a doctor, but when you call, there's no one 22 there. 23 And, of course, there is many, many insight 24 that we see when we go through the study. 25 I mean, you know, after you interview 1 11,600 people, and spend 15 to 20 minutes each, this 2 is real. 3 I mean, this is -- this is a study actually 4 for the people, from the ground up, because they cry 5 out loud for services. 6 It's not that you don't have enough FQHCs, or 7 anything else. It's because, FQHCs, they talk to 8 [unintelligible]. They say, We're open up 49 hours. 9 But there's 160 hours a week. 10 All right? 11 In neighborhoods, it's very hard to open up 12 certain clinic hours because, the neighborhood, the 13 security issue. 14 You all know our report, the "shooting" map 15 that we have. And we know that, in those areas, you 16 can pay the doctors 200 percent Medicare fee 17 schedule. They say, "My life is more valuable to 18 practice over there." 19 So, in a way, our costs are very high, 20 because in order to attract people to certain 21 places, and if you open up certain hours in the 22 off-hours, you actually have to pay the security, 23 and all of that, the staff to opened up there, to 24 see them. 25 So I think that when we going through the 1 process, is that, we built this coalition. And we 2 actually can work together. And when we work 3 together, we share a lot of best practices. 4 And that's why we're thinking about this 5 Brooklyn Health Care Improvement Corp., because we 6 talk to all this facilities. We talked to FQHCs. 7 And, you know, after we actually talk 8 together, our organizations, they were so gung-ho 9 about this thing, even though we [unintelligible] 10 money, they said: We must meet. We have to keep 11 the process going. 12 Because they learned so much from this 13 experience. They now have the connection of the 14 insurers. 15 The insurers actually meet with us, and we 16 actually try to figure out, how we going to say how 17 to work on Hot Spot 1? 18 Because we have Hot Spot 1, 2, 3, were 19 identified. 20 How are we going to do that without any 21 funding? 22 Because our grant is, really, like a little 23 bit short of a million dollars. 24 You know, we try to do that. 25 SENATOR HANNON: You heard Ms. Swain talk 1 about using the statistics, and being able to 2 identify places where you might have a productive 3 use of another FQHC? 4 GRACE WONG: Yes. 5 SENATOR HANNON: Do you concur with that? 6 GRACE WONG: We have data. We can actually 7 identify where we can use. 8 But, however, FQHC, is that, I think that, 9 according to what she said, is that you have enough 10 FQHC. They can expand. 11 And, actually, some of the FQHCs -- 12 SENATOR HANNON: Or an expansion of one. 13 But I'm talking a site providing the service. 14 GRACE WONG: I'm not sure that you need more 15 sites right now at this point, based on our study, 16 because assisting FQHCs, they want more patients. 17 And, you know, dealing with patients is 18 really interesting, because our existing FQHCs, some 19 of them, they don't -- you know, they can use a lot 20 more patients. 21 So what I am saying, is that, based on our 22 study, it's very insightful, in a sense, is that, 23 patients want certain things. They may not go into 24 the FQHC right next to their neighborhood. They may 25 go elsewhere, because, the confidentiality. 1 We have focus-group studies. 2 We have patients saying here in Bronxville, 3 Van Dike Housing, we were there. 4 Bronxville FQHC is right here. 5 They said: We don't use that because, they 6 have the employees, they live in my neighborhood. 7 If I have some DCs, I may not want to go there. I 8 might want to go farther. 9 So there's a lot of education about HIPAA, 10 they didn't know better, or whatever. 11 So what we saying is that, education is 12 critical. 13 There's -- we cannot change the system from 14 the high up. We actually have to engage the 15 population. 16 SENATOR MONTGOMERY: Just one quick comment 17 to something that you said, [inaudible] 18 Mr. Chairman [inaudible]. 19 You mentioned that the doctors don't want to 20 stay at the facilities late because it's so 21 dangerous, and -- 22 GRACE WONG: Certain areas. 23 SENATOR MONTGOMERY: There are a couple of 24 those FQHCs in my district, that are located in the 25 same area where I live. 1 So -- and I have to be there 24/7. 2 So, I don't buy that, in other words, as an 3 excuse. 4 And I also want to say, that it's very 5 disappointing -- and, of course, I support primary 6 community-based facilities, absolutely, of 5,000 or 7 so percent, but, I do want to say that it's 8 disappointing to note that many of them close down 9 the same hours. They act as if it's an office 10 building. 11 So that, if you have a job, or if you get 12 sick on the weekend, on a Sunday at night, late at 13 night, they are not there for you. 14 So that is a huge barrier to utilizing those 15 facilities. 16 And I don't know if that came out in your 17 survey -- 18 GRACE WONG: Yes, it did. 19 SENATOR MONTGOMERY: -- but, certainly, that 20 is a huge problem that, if we fix that, they could 21 increase the patient load, I believe, exponentially, 22 overnight. 23 DOROTHY FIFE: And that's where you get the 24 problem of patients going to the ED -- 25 SENATOR MONTGOMERY: Exactly. 1 DOROTHY FIFE: -- for a problem they 2 recognize as not emergency, but, where else can they 3 go? 4 SENATOR MONTGOMERY: Absolutely. You have no 5 other choice, if it's a certain day, certain hour. 6 SENATOR HANNON: It's convenient. 7 24/7? It's open. 8 DOROTHY FIFE: Has everything in it. 9 SENATOR HANNON: People are rational. 10 DOROTHY FIFE: One of the interesting things 11 are people, you know, are -- have some discernment. 12 They want to go to a hospital because there's 13 real doctors there. 14 So, there's is some education that needs to 15 be -- 16 SENATOR HANNON: We've also heard of the 17 security nature of it too. 18 SENATOR LAVALLE: Yeah. 19 DOROTHY FIFE: Yeah. 20 So there needs to be -- 21 SENATOR LAVALLE: I hate to -- 22 SENATOR HANNON: We have session. 23 SENATOR LAVALLE: And we have to vote. 24 SENATOR HANNON: And we've already started a 25 while back. 1 DOROTHY FIFE: Okay. 2 SENATOR LAVALLE: Thank you. 3 SENATOR HANNON: And I thank you very much 4 for your patience, and your great information. 5 GRACE WONG: Thank you. 6 SENATOR LAVALLE: One closing comment: 7 We're going to ask people, on an individual 8 basis, to come in, present certain information. 9 And, we may at the end, before any 10 legislation is finalized, ask SUNY to come back 11 again for additional questions. 12 DOROTHY FIFE: Gladly. 13 SENATOR LAVALLE: So -- but I think we're -- 14 you know, we're a bit away from that. 15 Thank you. 16 GRACE WONG: Thank you. 17 (Whereupon, at approximately 2:43 p.m., 18 the joint public hearing held before the New York 19 State Senate Standing Committee on Health and the 20 New York State Senate Standing Committee on 21 Higher Education concluded, and adjourned.) 22 ---oOo--- 23 24 25

Public Hearing: To Discuss SUNY Downstate Hospital and Long Island College Hospital in Regard to the Sustainability Plan Required by the 2013-2014 State Budget

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