Copy of Letter to Boards of HHC, Coney Island Hospital and Univ. Group Medical Assoc. RE: Postponement of Board Vote

    COMPTROLLER OF THE CITY OF NEW YORK 

! CENTRE STREET 

NEW YORK, NY 10007-2341 

(212) 669-3500 

ALAN G. HEVESI 

COMPTROLLER November 7. 1996 

Board of Directors 
Health and Hospitals Corporation 

Board Members 

Coney Island Hospital Community Advisory Board 

Board Members 

University Group Medical Associates, P.C. 

Dear Colleagues: 

The HHC board is about to vote on whether to transfer Coney Island Hospital to Primary 
Health Systems. The vote will be taken without a reasonable opportunity for interested parties -- 
including the board itself -- to fully review the written agreements, and to get outstanding 

questions answered. I request that the board postpone its vote until interested parties have had 
sufficient time to review the relevant documents -- including, at minimum, the sublease and the 
collateral agreements. I hope that the HHC board shows real independence and withholds its 
approval until the outstanding questions have been answered. 

I have attached my analysis of what the outstanding questions are. Others could probably 

expand on it. In particular, I request that the Coney Island Hospital Community Advisory Board 
(the “CAB”) and University Group Medical Associates, P.C. (the “P.C.”) provide me and the 
HHC board with their own analyses. In their roles as representatives of Coney Island Hospital 
patients and doctors, the CAB and the PC are in a unique position to comment on whether the 
proposal is likely to meet medical and other needs of the hospital’s patients. 

Maria Mitchell said that this is an “historic” agreement. I agree with her. That is why 
HHC should not rush into it before the affected parties have a chance to review it for themselves. 

The sublease was first released to the entire HHC board on October 24, and to the 

hospital’s Community Advisory Board, October 30. The administration never officially 
distributed the sublease to other interested parties. To the best of my knowledge, this includes, 
among others, the Brooklyn Borough President, the hospital’s medical staff, HHC’s Council of 
Community Advisory Boards, the City Comptroller, and the City Council. 

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Moreover, the board’s October 24 and 30 briefings referred to additional agreements that 

are not stated in the sublease as distributed to the board -- such as the price of the sublease, the 

conditions for closing and PHS-NY” capital commitments. These items are apparently covered in 
additional, collateral agreements. But the documents stating the additional agreements have not 

yet been released -- even to the HHC board. For example, through informal channels, my office 
previously received the August draft of both the sublease and an additional document stating 
agreements with PHS. The board’s briefing book includes the current version of the sublease, but 
not the current version of the other document. What happened to it? 

Last month, there was a joint public hearing of HHC and the City Health department. 
Shortly before the hearing, HHC released a summary of the proposed sublease, but not the actual 

document. This is unfortunate because the sublease contains major provisions that were not in the 

summary. These include, for example, 

° the provisions relating to PHS’ authority to take out a mortgage, 

» its authority to sublet to another health care provider 
J its “right to manage Access to health care in such manner as it may deem 

appropriate so as to avoid Excess Incurrence” of indigent care. 

Additional details were subsequently released at the October 31 HHC board meeting -- most 

notably, PHS-NY’s policy statement on charity care, which indicates its definition of who is “able 

to pay” and the associated sliding scale. 

I call for a new public hearing, where the community can comment on the actual 

documents, and not just the administration’s summary. 

There are a large number of questions that are still unresolved. I have been raising many 
of them for over a year now. I just received the sublease, but, even after an initial review, it is 
already evident that the document does not resolve my questions -- e.g., whether PHS-NY will 
maintain Coney Island’s mission of providing care to everyone who needs care regardless of 
ability to pay, and whether PHS-NY will provide all the services the community needs, or simply 
those services that are profitable. 

A year ago, in an analysis of the Offering Memoranda, I warned that a process had been 
created whereby “the City will take ‘the best offer’, whether or not it results in lower costs and/or 
better service. That is because the Memoranda set no objective standard for evaluating offers and 
determining the impact on the City's costs and on service delivery. The offers will just be 
measured against one another, and the best one will win, whether or not it reduces costs and/or 
improves service.” Unfortunately, the results appear to have confirmed that warning. 
Furthermore, we appear to be privatizing for the ideological purpose of privatizing. 

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The following items are attached: 

» My most recent analysis of fundamental issues that have yet to be resolved. Listed 
under each are examples of specific questions that still need to be answered. No 

decision should be made until these questions are satisfactorily answered. 

° A table attached to PHS’s testimony at the October 8, 1996 hearings of the New 

York State Assembly. The table contains the Cleveland hospitals’ estimates of 
their indigent care costs between FY93 and FY96, which show that PHS is 

providing less indigent care than the prior owners. The HHC board was given the 

testimony, but conveniently not the attached table. 

° My office’s analysis of the PHS table, dealing with changes in the costs of indigent 

care from 1993-94 to 1996, which shows that care for the working poor (those 
above the poverty line who generally do not have any health care insurance) fell by 

about 30% at St. Alexis and about 39% at Deaconess. The table also shows a 

drop in total uncompensated care. This includes not only the working poor (those 

above the poverty line), but also the most destitute (those who are below the 

poverty line). For total uncompensated care, the drop at St. Alexis was 17% and, 

at Deaconess, 47%. . 

» A listing of Coney Island Hospitals clinics and the levels of service these clinics 
have provided during each of the last ten years. If PHS-NY were to maintain the 
current level of out-patient services, this is what they would have to maintain. 

Thank you for your consideration. IfI or my staff can be of any further assistance, please 
let me know. 

Sincerely, 

  

Alan G. Hevesi 

AGH:sn:brs 

Encl. 

cc: Mayor Giuliani 
Speaker Peter Vallone 

Borough Presidents 

Chairwoman Mitchell 

President Marcos 

HHC Council of Community Advisory Boards