Collins using $70,000 in campaign funds to oppose hospital merger
Says current proposal is a bad deal for taxpayers
County Executive Chris Collins on Thursday jumped into the dueling ad campaigns in the Kaleida Health and Erie County Medical Center consolidation.
He said he will spend about $70,000 of his private campaign funds to pay for television commercials in opposition to the current plan for merging the institutions.
Collins, who wants the county completely out of the hospital business, said the proposal moving forward is a bad deal for taxpayers.
It gives a state-appointed board overseeing the consolidation a busy hospital in ECMC that is making money and has a cash reserve of $180 million, yet it leaves the county with the medical center’s significant long-term liabilities, he said.
Those liabilities include $101 million of debt, an obligation to cover all annual losses after 2009 and a large share of the cost of retiree health care for ECMC’s workers.
“County taxpayers will not subsidize Kaleida Health on my watch,” Collins said.
Proposed state legislation to consolidate the hospitals attempts to relieve the county of the annual subsidies, but Collins said the bill would be ineffective.
Robert D. Gioia, chairman of the board, suggested that Collins submit new legislative language.
“This is something that can and should be resolved,” he said.
Kaleida Health countered by saying that it doesn’t need or want ECMC’s cash.
“We support the county executive’s efforts to get the taxpayers out of the health care business. However, his false accusations and lawsuits against Kaleida Health are a distraction at this most important juncture for the future of health care,” said spokesman Michael P. Hughes.
Hughes suggested that ECMC use its cash now to pay off the debt and other costs that concern Collins.
Then-County Executive Joel A. Giambra in 2004 converted ECMC into a public-benefit corporation to give it more management flexibility but also used the conversion to raise cash to delay a budget crisis.
In the deal, the county agreed to repay the debt, which now stands at about $101 million, not including interest. It also agreed that starting in 2010, the county will give ECMC a subsidy equal to however much the hospital loses annually.
After decades of chronic losses, ECMC has performed well financially in recent years, but Collins fears that the subsidy will grow substantially larger.
The cost of retiree health care is expected to increase significantly in the future. Collins and ECMC also fear that the combined organization will slowly strip the medical center of profitable services as programs are combined, making ECMC unable to increase revenues enough to cover rising costs.
He contends that ECMC’s higher benefit costs will compel such moves, risking even greater losses and the need for larger subsidies. Moreover, he says, the board needs ECMC’s cash to help fund a planned center for heart and vascular care next to Kaleida’s Buffalo General Hospital on High Street.
Gioia said that there is no desire to harm ECMC and that the board’s policies and structure will prevent it, anyway. But concerns led ECMC in December to start boycotting board meetings and demand a contract specifying what role the medical center will play in the combined organization.
The board originally planned to change state law to eliminate the public status of ECMC and allow it to merge fully with the private Kaleida Health.
But public-sector unions, including the influential Civil Service Employees Association, oppose privatization. As a result, the board proposes to keep the hospitals separate under a parent corporation with authority over major decisions. This change also requires legislation but is believed to have a better chance of passage.
Collins called the approach “half-baked.”
He advocates a true merger, a transaction that also would give the county access to ECMC’s cash reserve to pay off the debt and help resolve the retiree health insurance costs. He proposes pre-funding a trust to pay a large portion of retiree health insurance similar to the deal arranged between automakers and the United Auto Workers.
“If we can guarantee retiree health, I don’t see how workers will oppose dissolving the public benefit corporation,” he said.
The Commission on Health Care Facilities in the 21st Century, also known as the Berger Commission, ordered ECMC and Kaleida to form a unified, nonpublic entity that includes the University at Buffalo and to build a heart-vascular center.
The commission, which set June 30 as the deadline for obtaining hospital consolidation legislation, did not specify the business structure of the new entity. But it did call for the elimination of the public-benefit corporation that runs ECMC.
Collins said the bill to consolidate the hospitals offers to pay the subsidy but won’t work because the subsidy is governed by a contract.
If so, Gioia said, Collins should suggest changes that do work.
“We are on his side. We will defend what he wants,” Gioia said.
Asked about seeking changes in the bill, Collins said that it would be difficult.
“We need someone to step forward and accept all of the hospital’s liabilities moving forward,” he said.
Gioia and six other members of the board overseeing the overhaul of the health care system traveled to Albany on Thursday to encourage Western New York lawmakers and others to pass legislation for consolidating Kaleida and ECMC.
The board members want the measure passed before the end of the legislative session June 23.
“We had what I would consider to be very positive and very interactive meetings with not only our delegation, but also the leadership in the Assembly and the leadership in the Senate,” Gioia said.
“Our entire delegation is engaged and understands the issues and is very committed to getting something done before the end of the session,” he said.
Also Thursday, Gioia said that UBMD Physicians Group announced its support of the heart-vascular center on the downtown Buffalo Niagara Medical Campus and praised the way it allowed doctors to play a large role in planning it.
UBMD is a group of 450 physicians affiliated with UB. The group urged the board to create an integrated hospital system with continued physician input based around centers of excellence in different specialties, including the regional trauma center at ECMC.
News Staff Reporter Maki Becker contributed to this report.
