Nassau County Hospital Seeks Another Round of Turnaround Advice
Nassau County Hospital Seeks Another Round of Turnaround Advice
(Bloomberg) -- A Long Island hospital that treats some of the area’s most vulnerable residents is seeking another round of turnaround advice after an earlier recommendation to shut its inpatient unit and sell its nursing facility.
Nassau Health Care Corp. this month issued a request for advisers to help boost revenues and performance at the 530-bed Nassau University Medical Center and its 589-bed skilled nursing facility.
Like other so-called safety net hospitals, most of Nassau Medical’s patients are on publicly funded insurance -- about 80% according to a December report issued by Alvarez & Marsal, the advisers previously hired.
Medicare and Medicaid typically reimburse at a lower rate than private insurance, and A&M projected that the hospital would lose close to $200 million this year. Because it’s operated by the county, filing for bankruptcy isn’t an option without authorization from the governor or legislature.
Vacant Beds
With a shift to outpatient care and 2,300 vacant beds in the county, the hospital “fails to address the changing needs of the community,” the A&M report said. “The status quo is simply not an option,” and without changes “the survival of NHCC remains doubtful.”
Nassau County Health Care Corp has $150 million municipal bonds outstanding. The bonds are guaranteed by the county and carry an A+ rating from S&P Global Ratings Inc., according to data compiled by Bloomberg.
The situation lays bare the challenges facing hospitals that care for some of the sickest and poorest Americans, as care moves to outpatient settings and federal reimbursements fall short. The pandemic exacerbated the situation by halting profitable elective procedures and raising expenses, costing U.S. hospitals more than $323 billion last year, the American Hospital Association estimated.
The most cost-effective option would convert the center into a behavioral health facility and shutter its emergency and inpatient rooms, the A&M report said. In addition to more than $156 million in debt, the hospital has more than $700 million in other obligations, A&M said.
The hospital took issue with the conclusions, saying the report didn’t account for operating improvements it had recently made or an expected rebound post-pandemic. It projected adequate funding through early 2024.
“Closing Nassau University Medical Center (NUMC) would be an extreme action which would leave the entire region of Long Island without a Level I trauma center and burn center,” the center said in a March statement. “Concurrently, eliminating the Emergency Department would have serious and dangerous ramifications not only for our first responders, but to the surrounding communities.”
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