2012-03-02 / Front Page

PHC Lab On Life Support

Facility Ruled A ‘Danger To Patients’
By Howard Schwach


The Peninsula Hospital Center was closed on February 26 by the states health department because of critical problems in the clinical laboratory. Photo by Howard Schwach. The Peninsula Hospital Center was closed on February 26 by the states health department because of critical problems in the clinical laboratory. Photo by Howard Schwach. On Friday afternoon, February 24, it sounded as if another heavy aircraft had crashed into Rockaway streets. Sirens wailed and private ambulances sped on local boulevards, transporting patients away from Peninsula Hospital Center to hospitals in Brooklyn and Nassau County.

For the second time in the past seven months, the state Health Department has ordered that Peninsula Hospital Center in Far Rockaway admit no new patients — this time because it found “serious deficiencies” in the institution’s clinical laboratory.

The previous day, Health Commissioner Nirav Shah directed Peninsula Hospital Center to no longer admit any new patients, either through its emergency room or from physicians, transfer inpatients who are dependent upon laboratory services, and immediately cancel all surgeries.


On Friday, private ambulances wait to take evacuated patients to other hospitals. Photo by Miriam Rosenberg. On Friday, private ambulances wait to take evacuated patients to other hospitals. Photo by Miriam Rosenberg. “The Commissioner is of the opinion that the continued operation of the Peninsula Hospital Center without the services of its clinical laboratory poses a danger to current and future patients,” Shah said. State health officials documented a long list of deficiencies at the lab, noting, for example, that an individual worked alone at the blood bank in January after receiving just two days of training. Because of this, officials said, she did not perform quality controls or take the required daily temperatures to ensure that blood was stored in appropriate conditions.

Also at the blood bank, officials said, “No testing, quality control, temperatures or maintenance is reviewed by laboratory administration.”

The lab also has no backup for its information and, if the computer system fails, the data will be irretrievable, officials said. The hospital has substantial sickle cell and oncology populations that receive multiple transfusions, and health officials said an ability to retrieve their information is “critical to ensure safe transfusions.”

The list of problems found in the clinical laboratory ran to eight pages and many of them were critical problems. Those interested in reading the entire report can do so here.

Health officials said the lab would be closed for no more than 30 days provided the hospital can remedy the situation.

Crain’s New York Business reported on Tuesday that Peninsula Hospital Center executives were warned in late December of deficiencies in the hospital’s laboratory so serious that the state Department of Health had grounds to shut the lab down.

The business newspaper reported that Peninsula officials commissioned an outside consultant to analyze its lab at the end of 2011, and the result was a blistering December 26 report, a copy of which was obtained by Crain’s. Crain’s reporter said that the report’s language “Could not have been more direct: Patient health is being jeopardized every time a test is performed,” the consultant wrote.

Despite the call to action, the new management team at Peninsula Hospital, which is in Chapter 11 bankruptcy proceedings, did not show a sense of urgency in correcting the deficiencies, Crain’s reported.

Asked on Monday about the findings of the December report, CEO Todd Miller said he “had been told there were issues with the lab. I thought we were taking the appropriate steps.”

Miller spoke with The Wave on Wednesday, saying that the hospital has been working hard since September, when Revival Health Care took over its operations, to “fix all aspects of the hospital, including the lab.”

“We are going to modify what we have been doing, as many hospitals our size have done. We are going to outsource our laboratory functions, using an outside lab,” Miller said. “We expect to present our plan to the department [State Department of Health] early next week. We have been working with the department on the concept and they will come in and do an inspection when that concept is in place. We have no control over the timeline once they do the inspection, but we would like to think it would be a relatively short time.”

Miller added that the partial closing might have a negative impact on the hospital’s credibility, but he hopes not.

“I would like to think that having a new lab plan in place will help our credibility. We have to turn this negative into a positive.”

By 3:30 p.m. on Friday, there were few patients left in the hospital, Liz Sulik, the spokesperson for the hospital told Wave reporter Miriam Rosenberg, adding that the few that were left would be leaving shortly.

“They have been transferred to other accepting facilities based on their acuity levels, where there are beds available, and where they can get the appropriate care,” Sulik said. “That has been going on since yesterday in compliance with the DOH order.”

Sources say that a total of 78 patients were moved to other facilities.

The order gives the hospital 30 days to make the changes necessary to satisfy the DOH.

Some portions of the hospital, those that do not depend on laboratory services, such as radiology, ophthalmology, dentistry and the family health center, will remain open.

It is unclear what the closing will mean to employees. Some will work as usual, some will take vacation days and others will be paid for a half day of work, sources said.

Local political representatives decried the closing.

“After coming so close to the brink of closure last year, Peninsula was just getting on its feet,” said Councilman James Sanders Jr. “Now, another setback will further throw the future of the hospital into question. There can be no doubt that this was a simple failure of proper oversight and careful administration. I remain confident, however, that the new management and excellent staff at PHC will rise to meet this challenge and normal patient care will resume after the facility is reinspected in a month.”

Assembly Member Phillip Goldfeder said, “Putting patient safety at risk is outrageous and unacceptable. Our hospitals and other health care facilities must be held to the highest standard to protect the health and safety of our families. I will work with my colleagues and the Rockaway community to insure the medical and health care needs of our unique community is met.”

The closing comes in the wake of a 50-page report issued by Richard McCord, an attorney who was hired by the Federal Bankruptcy Court to address the question of the relationship between Revival and Peninsula Hospital Center.

Under state rules, a for-profit corporation such as Revival cannot operate a hospital without explicit state permission. Revival was allowed to run PHC on the grounds that it was simply providing a loan to keep it open and would have nothing to do with the administration of the hospital.

McCord interviewed 39 people and reviewed documents prior to writing the report. Faye Zakheim, the sole member of a number of Revival entities, including the company that leases the pharmacy, told McCord that Revival Funding was incorporated on August 31, 2011, just days before it made an agreement with PHC’s board of directors and took over the hospital. She told McCord that it was a “shell corporation.”

Many of the new executive hires at PHC, McCord pointed out, came directly from Revival, including CEO Todd Miller; Sara Safier, formerly Revival’s Director of Marketing and Admissions; James Ligorski, the IT Manager; Josh Gross, the Director of Purchasing; Yossi Askelrud, Chief Information Officer; and Ben Reisman, the Procurement/ Purchasing Officer.

“It certainly appears that Revival is running the hospital and feeding the major portions of the hospital to its own subsidiaries and business,” said one employee, who asked not to be identified for fear of retribution.

“Certainly, the transaction described in the Revival Acquisition Letter Agreement [and subsequent events] contemplated a de facto takeover of the hospital and nursing home by Revival Acquisition proscribed by the provisions of the Bankruptcy Code and DOH regulations,” the report said.

Todd Miller, in his capacity as COO of Revival Acquisitions, wrote to Steven Kramer, the executive vice president of Local 1199, advising him, among other things, that Revival was “finalizing an agreement with Peninsula to assume responsibility to management of Peninsula Operations.”

Miller received a salary from Revival through November 2011, while drawing a salary and living expenses from PHC, the report says. He testified that he had turned over the payments from PHC to Revival, but McCord says that he could find no evidence of those transfers.

He concluded, “Based on the results of the examiner’s investigation to date, there is at least the minimum of an appearance of conflicts of interest between current management (Revival) and the Debtors (PHC Board of Directors).”

On Tuesday, at a contentious hearing in bankruptcy court, officials debated the possibility of appointing a trustee that would oversee the administration of the hospital, overriding the decisions made by Miller and the local board of directors.

“The DOH is in the best position to determine whether the debtors are being properly managed,” a court-appointed trustee wrote in court papers.

An attorney for the hospital said that Miller and his team were doing a good job and that “adding a stranger to the mix would only complicate matters.”

Another court hearing is scheduled for Monday, March 5.

A spokesperson for the state’s Department of Health declined to comment on McCord’s findings except to say that an investigation is “ongoing.”

— Additional reporting by Miriam Rosenberg.

Those interested in reading the Health Department's entire report can do so here.

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