2011-12-02 / Columnists

East End Matters...

More Questions Than Answers
Commentary By Miriam Rosenberg

Two weeks ago I advocated for Revival Home Health Care and Peninsula Hospital Center to reverse course and not evict a treatment program for special needs children, run by the Joseph P. Addabbo Family Health Center. Revival demands it leave the space in PHC by January 1. But Dr. Peter Nelson, Addabbo’s CEO, has said that it would take six to eight months to find new space, renovate it and get city and state approvals. So why not wait until the end of the current school year as a deadline for the program’s removal? You got me. Revival was supposed to be the savior for PHC and the community. They promised the hospital would remain a non-profit. They promised to “reinvigorate Peninsula with programs and services to make your access [to health care better].” Yet, it isn’t acting that way. This month 60 layoff notices were sent out. Many of those notices went to people who live here in Rockaway. Crain’s Business has reported that CEO Todd Miller has said that PHC might, at some point, become a for-profit hospital.

A November 7 Crain’s Business article has called into question the governance structure of PHC. So much so that New York State regulators are investigating what the relationship between Revival and PHC really is. Is it an investment by Revival as was reported when it came to PHC’s rescue? Is it a takeover, which would have originally required a Department of Health review? And who is running PHC?

Well, let’s follow the bouncing ball that Crain’s Business has uncovered. The article raised doubts about Revival’s claim that its involvement in PHC is an investment. The State Department of Health did not originally investigate the bailout of PHC by Revival because it was not called a takeover. Now the DOH is asking why there is no management service contract between the parties, as is required by law for the type of arrangement between PHC and Revival.

Next, in a letter from Miller to Deputy Health Commissioner Richard Cook the CEO said that Steven Zakheim, the husband of Revival’s owner, has been “providing unpaid consulting services to the management of Peninsula, but he is not a member of the board of directors or its operating committee.” In 2005 Zakheim did not disclose a misdemeanor conviction on an application to acquire a nursing home. At that time, he signed a pledge “not to have any direct or indirect involvement with the operation, management or control [of Revival].” Joel Miele Sr., PHC board president, revealed to Crain’s that the board is “not in full control” of the hospital, which Miele said was a condition to gain Revival’s financing.

Other conditions were for all board members to tender their resignations and to hire Miller. The board has no authority over hiring or firing and Miele told Crain’s that “no one has to go through the board.”

Miele said, “Are we comfortable with it? No. It is an awkward situation [because the board has fiduciary responsibility], and yet I’m not in full control of it because of the agreement with Revival.”

In Miller’s first interview with The Wave he said, “We plan on maintaining Peninsula Hospital as a not-for-profit hospital; strong community hospital operating to meet the needs of the community from both a cultural and clinical perspective.” Bankruptcy Court has not yet approved the deal with Revival or the hiring of Miller or any other advisers. At a court hearing on December 5, creditors will argue against the deal saying that it completely favors Revival and leaves creditors and PHC out in the cold in terms of “benefits and protections [of bankruptcy].”

Board members should return to making decisions for PHC immediately because serious questions remain if things are left in Revival’s hands. What happens if the court rules for the creditors or the state probe finds that laws have been broken or the deal was misrepresented to them? Will the probe or court ruling find that Revival has no legal right to be making decisions for PHC? Caught in the middle are 16 special needs children who may be the symbol of whether Revival really wants to be part of this community and its health care or cares more about the bottom line.

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