2011-08-19 / Front Page

The Brink Of Extinction

MediSys Drops PHC Like A Hot Potato
By Howard Schwach & Miriam Rosenberg


Demonstrators walk in front of the troubled hospital. Demonstrators walk in front of the troubled hospital. A mid protests and political maneuvering, MediSys will drop all its affiliation with the Peninsula Hospital Center this coming Monday, August 22, the same day that a rally to save the hospital is scheduled for the St. Francis de Sales schoolyard.

After more than two years as its corporate sponsor, the healthcare giant is splitting with the troubled Rockaway hospital.

On August 11, in a letter to Joel Miele Sr., the chairman of the board of PHC, Bruce Flanz, the CEO of MediSys wrote, “MediSys Health Network hereby notifies Peninsula Hospital Center and Peninsula Nursing Home that, effective August 22, 2011, MediSys is withdrawing as the sole corporate member or sponsor of the Peninsula entities. MediSys and its affiliates are terminating the provision of administration of shared services to the peninsula entities. In addition, MediSys hereby demands immediate payment from the Peninsula entities for all amounts due for services provided by MediSys and its affiliates.”


Dr. Sadhano Gupta speaks to the crowd as Lew Simon looks on at the Saturday rally. Dr. Sadhano Gupta speaks to the crowd as Lew Simon looks on at the Saturday rally. Ole Pedersen, a spokesperson for MediSys, told The Wave on Tuesday that his organization should not be considered the villain in the hospital closing, as it often has been portrayed by many in Rockaway.

“We put money into the hospital that we will never see again,” Pederson said. “We tried to insure that payroll was available and the benefits paid. We went to significant effort to put in new programs, new staff and improve the billing situation. We were too late.”

Pedersen said that MediSys had no choice but to cut ties with PHC.

“We could no longer take money from other hospitals for PHC,” he said. “We had no alternative.”


100 Precinct Community Council President Danny Ruscillo and his wife, Linda, took part in the rally. 100 Precinct Community Council President Danny Ruscillo and his wife, Linda, took part in the rally. Pedersen said that the PHC board had initially voted to close the hospital but then rescinded that vote, “taking themselves out of the equation.”

“They could go into bankruptcy, as some have suggested,” he added. “That sounds simple, but has become quite expensive and complicated since the new rules have gone into effect – since St. John’s went through their own bankruptcy.” A hospital employee who has moved on, but who asked not to be identified, said that since June, Local 1199 had a lien on state payments to PHC, effectively seizing all of the state money coming to the hospital. That lien allows the union to recover some of the money owed by PHC, the former employee said.

“That was the last straw,” the former employee added. “Once the money was seized, there was no way to make payroll.”

A number of trustees are trying to keep the hospital open by moving towards bankruptcy if they cannot find a “white knight” to keep it open.

“A last ditch effort to keep the hospital open is underway,” said trustee Lou Caucig.

Caucig and other board members worry that any decision they make this week can still be vetoed by the MediSys board, at least until Monday, August 22, when all ties are cut.

“They could even veto a bankruptcy filing [until that time],” Caucig said. “We’re dog-paddling to stay afloat, and they’re dragging us down.”

Trustees say they are trying to delay the hospital’s closing through an involuntary bankruptcy that could be filed as early as next week.

Peninsula board members have met with bankruptcy counsel to decide whether to file for bankruptcy. They have also heard a proposal from a physician-led group that hopes to keep the hospital open.

In addition, insiders have told The Wave that Frank Paterno, the CEO of Alvarez Marsal, a large healthcare group that may be interested in taking over the hospital and rehabilitating it, is in New York City and will take part in a meeting with the other parties sometime this week or next, but that could not be confirmed with a company spokesperson.

State Department of Health officials recently imposed a Friday, August 19 deadline to submit a financial plan to the state detailing how the hospital can meet payroll for the next 30 days, as well as how it can “maintain patient health and address employees’ needs.”

In an August 12 letter, health department Deputy Commissioner Richard Cook notified Peninsula CEO Robert Levine that Peninsula had until August 16 to submit a detailed financial plan identifying the specific funds available to meet payroll “and maintain the health and safety of its employees and patients” for the next 30 days. That has now been extended to August 19, and insiders say that there is a possibility that it will be extended again if a deal to keep the hospital open is close at hand.

Without a workable plan, the health department would let the closure proceed, Cook wrote.

For now, Peninsula management is preparing to implement a closure plan. Under that plan, the emergency department was supposed to remain open an additional week, however the hospital will now close on August 22.

Bankruptcy for Peninsula became more likely because of a series of recent events. Last week, the MediSys Health Network said it will withdraw its corporate sponsorship of Peninsula Hospital. It reacted after Peninsula’s board last week voted to rescind the closure letter it had previously sent to state health officials.

At an emergency meeting held late last month, the Peninsula board was told by MediSys executives that the hospital could not meet payroll and should file a closure plan. The board voted to issue a notice of mass layoffs, following state law, and agreed to develop a closure plan.

But according to one Peninsula source, the board thought the closure plan would be used only if needed, and that it would be given the opportunity to review and revise the plan before it was submitted to the state. The board’s intent was to instead work out a plan to keep the hospital open.

But once MediSys submitted the closure plan to the state, the Peninsula board voted on August 9 to rescind the closure request.

A former hospital official, who spoke on the promise of anonymity because the official has no permission to speak with the press, says that the MediSys move to cut PHC loose might be the last nail in the coffin for the hospital.

“Freestanding hospitals cannot survive in today’s market,” the source said. “You have to be either endowed by a non-profit with lots of money, or you have to be connected to a large network of hospitals, such as North Shore Hospital or Long Island Jewish.”

The source said that nearly ten years ago, Peninsula was offered a chance to affiliate with a large hospital network, but that Joe Miele and the board turned it down because it would have meant taking board seats from locals and giving them to outsiders affiliated with the larger hospital.

“Because Miele did not want to give up control of board seats, the deal died, the hospital eventually went with MediSys and we are here today,” the source added. “Had Miele acted differently, then we probably would not be here.”

Records show that the hospital center owes upwards of $30 million to its corporate sponsor and a like amount to its union’s benefit funds.

Doctors at the hospital were told not to schedule any elective surgery after Thursday, August 18.

That would anger many residents, who are hoping to keep the hospital center alive.

On Saturday morning, 300 residents and staff members gathered outside the hospital for a demonstration of their desire to keep Rockaway with two hospitals.

They urged Governor Andrew Cuomo to investigate the circumstances surrounding the closing of the hospital and to keep it open while the investigation is ongoing.

The protestors, which included many hospital staff members and doctors, believe that the hospital could be saved if officials of the union, the state Department of Health, the hospital and MediSys could come together and make a plan.

“Going into bankruptcy would allow the hospital to stay open and the workers to keep their jobs,” one of the protestors said, reacting to a story in last week’s Wave that detailed a deal between MediSys and Local 1199 that would close the hospital so that the two could recover what is owed to them at the expense of 1,000 jobs and vital community health care.

The union did not return phone calls for comment on this story.

Two of the nurses at the hospital’s growing Hospice unit, which has grown exponentially since it began three years ago, are sponsoring a rally for the west end on Monday night, August 22, at the St. Francis de Sales schoolyard. The rally will begin at 6 p.m.

“We know that there’s only a slim hope that we can keep the hospital alive,” says Nurse Mary Liz Grosseto, who has been at the hospital for 16 years. “We know that our hospital is not state-of-the-art like some hospitals in Manhattan and Long Island, but we are there when the residents need us so that we can stabilize them before they move on to those other hospitals.”

“We love this hospital,” added Nurse Laura Rayder, who has been there for 25 years. “We have been there for the long haul. We are there when people need us. The Hospice has been enormously popular with not only Rockaway residents, but from around the entire city and Long Island.”

The two hope that people will come to the rally and relay how the hospital helped them and their relatives.

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Corporate & personal greed

Corporate & personal greed once again devours the little guy, in this case the little guy being most of our peninsula! The fact that MediSys can close the hospital no accountability to where all the $$ has gone is preposterous!Especially when there is hope in the horizon! I hope people will turn out to suppor MaryLiz & Laura at the rally on Monday. Brava ladies, BRAVA!!!! Maureen Del Vecchio


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