Mayor Zimmer Announces Trenton’s Emergency Funding for Hoboken UMC
"This funding is very welcome news since it recognizes Hoboken UMC as an essential safety-net hospital and will allow much needed additional time to improve the hospital’s financial performance and pursue its recovery plan,” Mayor Zimmer commented. The Mayor added that more work needs to be done to ensure that the hospital will be financially self sufficient and she is confident the new CEO and his management team are taking all necessary steps to improve revenues and lower costs.
Mayor Zimmer and the hospital’s CEO, Spiros Hatiras, together thanked Governor Jon Corzine and Health Commissioner Heather Howard, as well as members of the Governor-elect Chris Christie Transition Team which supported the awards. She also expressed gratitude to Senator Robert Menendez, State Senator Brian Stack, Assemblyman Ruben Ramos, former State Senator Bernard Kenny and members of the Hoboken City Council for their advocacy and support of the hospital.
Mr. Hatiras previously announced a budget reduction plan with a goal of reaching a break-even financial result for 2010. The Stabilization Grant funding is a part of the recovery plan and does not lessen the need for the hospital to reduce its operating expenses.
He explained, “success of the plan will require shared sacrifice by everyone at the hospital; the senior management team has set an example and already taken a 10% salary decrease." Mayor Zimmer noted that Mr. Hatiras voluntarily led by taking a 15% reduction.
The financially struggling St. Mary Hospital was made a City entity in 2006. The City guaranteed $52,000,000 in bonds for capital projects starting with the new Emergency Room. Approximately $9 million has been used to fund operating expenses. The hospital lost $22.8 million in 2008 on a budget of $136,000,000.
Hoboken Municipal Hospital Authority Chairman Kevin Kramer expressed appreciation for Mayor Zimmer's advocacy on behalf of the hospital: "The Mayor's persistent hands-on lobbying for support was instrumental in getting this funding across the finish line."
My comment: This is great news on one hand as it at least gives the HUMC some time to regroup. Their cash on hand was approaching day to day if it was not already there. That organization must use this reprieve to cut total expenses by at least $1 million a month or this will end up being a case of throwing good money after bad. At least it won't be Hoboken taxpayer money and the worse case scenario would at least push back the possibility of the Hospital folding for most of 2010 if not all of it.
Time will tell if this money was a wise use of State money or not. Here is hoping that the current management can make it work. Kudos to the Zimmer Administration for giving the hospital one more chance by helping get this money. There were many others that she thanked in helping get the stabilization grant and they get my thanks as well. Keep in mind the HUMC will have to change its business model in order to survive long term by at least breaking even. The challenges are still there. ◦
