ONLY ON CLIFFVIEW PILOT : City council members informally agreed Monday night to back Hoboken University Medical Center’s bid for $10 million in state stabilization funds — albeit reluctantly — to stem the facility’s worsening financial crisis.
The hospital has sustained a cut in state aid, implemented three years ago, not to mention a bundle of poorly negotiated contracts, which, combined with the economic downturn, have contributed to a $22.3 million shortfall, said hospital CEO Spiros Hatiras.
Hatiras’s solution, submitted during a packed City Hall meeting, is the stabilization grant, an endowment created to prop up a hospital when it ceases to be financial viable in order to allow the institution breathing room to establish long-term solutions.
Administered by the Department of Health, the grant is awarded once a year. Jersey City Medical Center beat out Hoboken University Medical Center last year, and appears to be the favorite again, although Hatiras said his hospital meets every criteria of a hospital in need again this year.
“If we can’t put enough collective pressure on them, I don’t think we’re every going to be successful,” he said.
Council members balked at the idea, accusing hospital officials of having no contingency plan should the bid for state aid fall through.
Hatiras insisted Trenton wouldn’t let Hoboken’s only hospital fail. In one of several heated exchanges, he told Councilwoman Beth Mason: “The state has to pay up.”
“Good luck,” she fired back.
That previous chief officers remain on the payroll confounded the Council. For instance, former CEO Harvey Holzberg, who is on the books as a consultant, continues to receive checks on an $800,000 annual salarly until this December. Previous CFO Ron DeVito, who resigned in October after an audit revealed losses of more than $20 million, will be paid until April 2010.
The 2010 budget, still not complete, includes unspecificed cost cuts, Hatiras said, adding that hospital officials are exploring how to terminate several of the overly generous contracts.
“The whole idea is that we have to change the way we do things,” said Hatiras, who, at $400,000 a year, is one of the state’s lowest paid hospital CEOs.
He also spoke of possibly partnering with another medical facility or provider, although he declined to name names.
The matter now goes to the committee level for the drafting of a resolution.
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