LICH Employee Sends Open Letter To Governor Cuomo

The following is an open letter sent by Associate Director of Financial Aid of SUNY Downstate Medical Center James Hayes to Gov. Andrew Cuomo on Friday, Feb. 1, calling upon him to find a solution to help save Long Island College Hospital in Cobble Hill, Brooklyn.

The Honorable Andrew M. Cuomo

Governor of New York State
NYS State Capitol Building
Albany, NY 12224

Dear Governor Cuomo;

Re: Audit, Citing Mismanagement, Finds SUNY Downstate in Dire Fiscal Straits

I have worked at SUNY Downstate for the past 12 years. Many employees of SUNY Downstate have many unanswered questions regarding the failed acquisition of Long Island College Hospital (LICH) and the issues raised by the Comptrollers report.

In the SUNY 2011-12 Office of General Counsel Report  dated June 2012 it states regarding the LICH acquisition, On page 16: "Accordingly, over the past year, Downstate, with outside counsel Hogan Lovells LLP, continued to diligently pursue completion of the seemingly infinite number of required steps and agreements necessary for the deal to close. OGC attorneys (mainly Kevin O’Mara, Jason Weiss, and Michael Morgan) negotiated and brought to completion an Asset Purchase Agreement and other material transaction documents for regulatory approval. "

In the New York State Comptrollers Report he states: "A major cause of the Hospital’s fiscal stress is the acquisition of LICH on May 29, 2011."

The NYS Comptroller added in his audit report: "The acquisitions of LICH and Victory Memorial in the midst of known underutilization and recurring operating losses suggests an overall lack of leadership and governance in planning the future of Downstate. Specifically, Downstate had not prepared comprehensive financial analyses supporting these acquisitions. Instead, current Hospital officials provided consultant studies prepared for and accepted by former Downstate management, indicating that LICH could become financially viable in the future. These studies were flawed, as they were based on business assumptions that were inconsistent with the realities faced by the Hospital and the broader Brooklyn health care community. "

One of the Comptrollers recommendations is: Ensure that any decisions to acquire or expand hospital locations are thoroughly supported with documented financial analysis demonstrating the financial viability of such decisions.

With that said: How did SUNY get past all the NYS checks and balances that are supposed to exist for Downstate to acquire LICH?

The Comptroller reported LICH has lost money for 17 years in a row.

Did/has someone at SUNY reviewed the financial statements of LICH?

The answer: In the 2011 SUNY Financial Report page 4, the auditor KPMG said, "We did not audit the financial statements of certain discretely presented component units, the auxiliary service corporations, theDownstate at LICH Holding Company, Inc., the Alfred University College of Ceramics and the Cornell Statutory Colleges which represent 53% of the total assets and 47% of the total revenues of the aggregate discretely presented component units and 14% of the total assets and 12% of the total revenues of the University’s business-type activities. Those financial statements were audited by other auditors whose reports thereon have been furnished to us and, our opinions, insofar as they relate to the amounts and disclosures included for those component units, the auxiliary service corporations, the Downstate at LICH Holding Company, Inc., the Alfred University College of Ceramics and the Cornell Statutory Colleges, are based solely on the reports of the other auditors.” Dated November 17, 2011

So the answer perhaps?  

This may cost New York State hundreds of millions of dollars before all is said and done. This will affect all the taxpayers from Buffalo, to Rochester, to Albany, to Long island paying for this mistake.

New York State should have an open hearing examining how SUNY was able to push through the Long Island College Hospital acquisition. If there was wrong doing, there should be criminal charges. New York State failed in it's fiduciary responsibilities to insure the acquisition of Long Island College Hospital was sound fiscally!

What happened to the "seemingly infinite number of required steps and agreements necessary for the deal to close." Did no one from N.Y.S. look at the fiscal issues before giving an okay to this deal?

Instead of looking for simplistic answers like mergers, or hiring consultants for millions who know nothing about Brooklyn or its problems. New York State and SUNY should follow the Comptrollers recommendations: Work with the consultant, SUNY System Administration, state policy makers, union officials and the Brooklyn community to identify solutions that balance the Hospital’s need for fiscal stability with the strategic goals of Downstate as well as the health care and economic needs of the community.

Have someone actually talk to the people of Brooklyn, the people who work here, live here, and utilize the health care system for possible solutions. We don't bite!

Governor Cuomo step up and take part in these discussions and possible solutions to Brooklyn's Health Care problems. Come to Brooklyn and see and meet the people of Brooklyn. Two past governors of N.Y.S. went onto become immortal Presidents of the United States. They did that by fighting for the working person, fighting for peoples rights, fighting for people who are unable to speak for themselves. We carved one, his likeness into a mountain, the other we know by his initials. The path to the White House is not be abandoning Brooklyn or delegating Brooklyn's health care problems to others.    

Sincerely

James Hayes