January 23, 2013
Joe Maniscalco

The completion of New York State Comptroller Thomas DiNapoli's much-anticipated audit of SUNY Downstate Medical Center's troubled finances has the unions representing almost 7,000 workers at the Brooklyn institution saying, "We told you so."

After a six-month probe begun last July, the comptroller found that basic mismanagement and bone-headed decisions have led to years of financial losses, even as the medical center's top 15 administrators raked in handsome annual salaries of $200,000 or more.

“The comptroller’s report confirms what UUP has maintained for more than two years—that bad management decisions and lack of transparency and accountability caused Downstate’s financial trauma," said Phillip H. Smith, president of United University Professions.

According to Smith, the unions consistently raised alarms about SUNY Downstate's ill-advised expansion to Bay Ridge and Long Island College Hospital and offered other ways to cut losses, but to no avail.

"Our members at Downstate have repeatedly offered suggestions to improve hospital operations, including changing its patient billing practices, only to be ignored by the Downstate administration," Smith said.

SUNY Downstate Medical Center is the 4th largest single employer in Brooklyn, but instead of fighting to save as many jobs as possible, organized labor now faces the daunting task of just trying to keep the doors open on the institution – which is on pace to run out of money by the summer.

“The audit of SUNY Downstate Medical Center released by New York State Comptroller Thomas DiNapoli supports what PEF has been saying all along," said Susan Kent, president of the Public Employees Federation. "And that is, management’s poor financial decisions, especially the partnership and acquisition of two other hospitals based on faulty business assumptions and the decrease by millions of dollars in direct State support, has resulted in the dire fiscal condition now facing SUNY Downstate Medical Center."

While the SUNY System Administration insists that it is diligently working on a so-called "restructuring plan," the comptroller's report has concluded that "present actions and plans to deal with the hospital’s looming insolvency are insufficient to restore financial stability."

DiNapoli is instead urging an "all hands on deck" approach to saving SUNY Downstate Medical Center. The audit itself calls on "The SUNY System Administration, state policymakers, union officials and the Brooklyn community to identify and implement solutions that balance the hospital’s fiscal stability with health care and economic needs of the community and the strategic goals of Downstate Medical Center."

Despite these findings, however, labor groups maintain that the present hospital administration continues to shut them out of the "restructuring" process.

"While Comptroller DiNapoli recommends Downstate management continue to work with union representatives to identify solutions, Downstate management omits unions as entities to work with in its response to the audit’s recommendations," Kent said.

Smith argues that if appropriate oversight and accountability had been the rule all along,    the venerable institution would not now be in very real danger of becoming financially insolvent.

According to the audit, SUNY Downstate Medical Center is losing about $3 million a week, and could possibly run out of enough cash to meet its liabilities as early as May.

“We urge the governor and Legislature to take action to ensure the long-term financial stability of SUNY Downstate and to keep it a full-service public hospital," Smith said. "The 400,000 patients who receive treatment at Downstate every year deserve nothing less.”

Hundreds of Downstate  workers have already received layoff notices. At the same time, SUNY Downstate signed new president John Williams to a fat annual contract in August totaling about $700,000.

"We are calling on the SUNY System Administration and State policymakers to find a solution to keep Downstate solvent, so that the Brooklyn community can continue to receive the quality public health services it needs," Kent said.

Read the full audit


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