2012-03-09 / Front Page

Times Of Trouble

PHC Lab Closed, ‘Temporary’ Layoffs, Federal Trustee On Tap
By Howard Schwach


PHC CEO Todd Miller will be replaced by a federal court-appointed monitor, sources say. PHC CEO Todd Miller will be replaced by a federal court-appointed monitor, sources say. The last few weeks have been tough ones for the Peninsula Hospital Center. Since the first of the year, the state has closed down the hospital’s clinical laboratory, calling it a “danger to the health of the hospital’s patients,” a move that caused all of the hospital’s patients to be moved to other facilities and ambulances to be diverted.

That closing brought the “temporary” layoff of up to 240 employees. It also caused the federal court to appoint an independent trustee to oversee the administration of the troubled institution.

And, added to all of those problems, there was the disclosure of a damaging December 2011 report that showed that hospital administrators knew about the problems with the clinical laboratory and did little to remediate them.

After surviving complete closure late last summer, the hospital seemed to be moving ahead under its new owners, Revival Home Health Care and its new CEO, Todd Miller. Then, on February 23, the state’s Department of Health issued a scathing report about the hospital’s clinical laboratory and closed it down.

The state provided an eight-page litany of problems, including mistyping blood, problems with supervision, aging and outdated equipment and improper handling of blood.

With the lab closed and the inability of the hospital to do any clinical testing, 87 patients were moved to other facilities,

And, the hospital says, without those patients, it no longer needed the in-patient staff to address those patients.

“We had to make some concessions that we are not happy about,” said board member Joe Mure. “We are hoping to have those people back on payroll as soon as possible.”

While the hospital calls it a temporary layoff, many of those laid off for the second time in less than a year are less sanguine.

“This is getting old,” one nurse, who asked not to be identified, said. “We can’t stay on this roller coaster and we are not even sure that Revival wants to keep the hospital open. They knew about the problems in the lab, but did not want to spend the money to fix them. I love this hospital, but it’s time to look elsewhere, someplace more stable.”

On March 1, at the same time the layoffs were being planned, officials of the hospital center and the board consented to the appointment of an operating trustee appointed by the bankruptcy court.

The hospital had been resisting the appointment, saying that an “outsider” would just get in the way of solving all the hospital’s problems.

Attorney Howard Fensterman, who represents the hospital, told the Daily News, that PHC finally relented to save time and money.

“Engaging in a protracted litigation with the U.S. Trustee’s Office was not in the best interests of the hospital.”

That trustee would reportedly take over the hospital administration from CEO Miller and the local board of directors.

Mure told The Wave that the board was “unsure” of what the role of the operating trustee would be.

“The trustee hasn’t been appointed yet, and the court and our lawyers are working out what the role of the trustee will be. The person could come in and take over all the administrative functions or come in and work with the current administration and the board. We are not sure.”

Insiders, however, say that it would most likely be an attorney with some knowledge of hospital administration.

Miller says that the hospital now has the necessary people and equipment to rectify the problem, adding that the construction of a new lab, with new equipment, was almost completed. Last week, however, he told The Wave that the hospital’s plan was to outsource the lab functions to an outside facility.

Miller and other hospital officials were stung last week by the leak of an internal December 26 report that pointed out many of the problems with the lab that were noted by the state in closing the facility.

The report, authored by Dr. Jack Deutsch, pointed out that the lab had no management structure at any level and that its organization is “outdated.”

He also pointed out in his five-page report that the lab computer was “30 years out of date.”

“These are a representative listing of some of the deficiencies that were found,” he concluded. “If a state inspection were to take place in the near future, the laboratory would be shut. As it is, patient health is being jeopardized every time a test is performed.”

A month later, his predictions came true.

What was going on in that intervening month?

“At the end of December 2011, the hospital began the process of addressing the necessary lab improvements through a remediation action plan,” Miller said. “That included revising and updating policies and procedures, ordering upgrades to equipment and maintenance routine as well as upgrades to staffing. It’s a big job, but we are working around the clock to get all of the necessary changes completed.”

Few, however, were completed prior to the February state inspection, health department officials say.

Mure admitted that the board had no idea about the damning December report that pinpointed the dangerous aspects of the lab and predicted the state would close it down if an inspection were held.

“That report was clearly a red flag that needed to be addressed, and I wish that the board had been told about it,” Mure said. “I wish that I would have seen it. I knew there were issues [with the lab] but I did not know how serious those problems really were.”

Mure added that he still had confidence in Miller and his team, and that the fact they had not been shown the report did not show that Revival was trying to withhold the fact from the board.

“Miller is not Revival,” he said. “The board is still in control of the hospital and Miller works for us, not Revival. Revival is just a lender who gave us the money to [stay] in operation. That is the important point to remember.”

There are those Rockaway residents, however, who are skeptical of Revival’s commitment to the hospital and to the Rockaway community.

“The residents of Rockaway deserve better,” one resident with connections to the hospital, who asked to remain anonymous, said. “Revival will lose nothing if the hospital closes. As a condition of its loan to PHC, the nursing home was put up as collateral, and Revival will get the nursing home if the hospital closes or if a trustee is appointed.”

Sources at Revival declined to comment on that contention.

Meanwhile, the hospital is rushing to ready the new lab.

“We have built a new lab with new equipment,” Mure added. “We are now running tests on the new equipment and training people to use it. Within the next couple of days, we should be ready to show the state what we have and we hope they will allow us to reopen the lab.”

“We have one aim,” Mure concluded, “and that is to keep the hospital open.”

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