Faced with what Westchester Medical Center President and CEO Michael D. Israel called “a $60 million challenge,” the regional teaching hospital will close its skilled nursing home this spring and eliminate about 400 jobs in a first round of cost-cutting measures brought on by the state budget deficit and reduced Medicaid revenue for hospitals statewide.
The closing of Taylor Care Center on the Valhalla medical campus and the work force reduction there and at the Medical Center will trim $40 million from an anticipated budget deficit that could reach $72 million. The cost-cutting plan was part of an interim $766 million budget adopted last week by the board of directors of the Westchester County Health Care Corp., the public benefit corporation that operates the center.
More spending cuts are expected to follow, said hospital officials, who still are faced with a $22 million operating deficit in their interim budget while they wait to see how much state and federal aid will be forthcoming this year.
“This is a very painful step that we have to take,” a watery-eyed Israel said not long after the special Jan. 12 board meeting, where he spoke to families of residents at the 73-year-old Taylor Care Center. “My heart goes out to them. We have some very, very long-term residents here who consider this place their home.” Medical Center staff and the state Health Department, which on Jan. 9 approved the facility”™s closing, will assist the 100 residents there in relocating to other nursing homes in the region.
In 2007, the 321-bed skilled nursing home reduced its capacity by 140 beds under a mandate from the state Commission on Health Care Facilities in the 21st century. State health officials last year approved another downsizing to 91 beds at the money-draining facility, and 45 residents since then had voluntarily moved to other nursing homes, Israel said.
Despite the downsizing last year, the nursing home still operated at about a $10 million annual loss, Israel said.
The decision to close the nursing home had to with saving Westchester Medical Center”™s primary mission, he said. “Westchester Medical Center over the years has evolved into a very unique model” as a provider of highly specialized tertiary and quaternary patient care. “This is a regional care center. We don”™t do primary and secondary care ”¦ We do what the community hospitals don”™t do.
“The issue that we”™re dealing with right now is the ultimate survival of this institution”™s core mission and to do that we have to do some painful things,” he said.
Hospital officials said 185 to 190 positions will be eliminated with the April 1 closing. About 200 additional positions will be eliminated at the Medical Center. Officials stressed there will be no reduction in the number of bedside nurses. Israel said the planned cuts will reduce executive and management posts by 26 percent. For union members, the cuts will reduce Civil Service Employees Association jobs by 9 percent and New York State Nursing Association positions by 2 percent.
Israel noted that 500 jobs had been added at the Medical Center since his arrival three-and-a-half years ago as CEO of the deficit-plagued institution. The cuts still will leave the center with a net increase of 300 jobs. “As opposed to expanding, we”™re trying to figure out how to shrink those programs we”™ve added,” he said.
Before the cost-cutting measures, the initial 2009 budget showed the hospital going from an approximately $5 million surplus last year to a $60 million deficit this year, Israel said. “This is a direct result of the state budget issues.” The hospital stands to lose $40 million to $72 million in Medicaid reimbursement, depending on which of Gov. David Paterson”™s deficit-slashing proposals are adopted by the state Legislature. Of that projected loss, $40 million “is already written in stone,” he said.
“If things hadn”™t changed, for the fourth year in a row we”™d be generating a surplus.” As it is, if the hospital spends its full 2009 capital budget of $25 million and no state or federal revenue comes in to offset the projected deficit, “We will burn about 50 million of our dollars this year,” or half of the hospital”™s cash reserve.
“I don”™t want to point a finger. There are no villains here,” including the state, Israel said. “This is a story that will be repeated in numerous institutions.”
As for more cost-cutting steps, “We have to plan for the worst,” he said. “This is phase 1.”
Israel said the board expects to have a final budget in place by April 1. “I”™ve been in this business 32 years. This is the first time I have not been able to adopt a budget.
“This is as difficult as I”™ve ever seen it.”
