Spiros Hatirus - CEO of the HUMC
A few things were clarified:If the hospital were to fail, the City would only be on the hook for the bonds (around $62 Million) and not such things Union contracts of the private entity that provides the hospital services. Kudos to politically active tax-payer Leon Gold for phrasing the question in a matter of fact non-threatening light.
The cash balance or cash on hand figure of $48,000 was a snapshot from a previous month of September. That is a moving figure due to cash inflows and outflows. The month of October it was $165K. In actuality, at points this fund may be up to 2-4 million and that number needs to be understood as a moving target due to checks in transit. Still, the cash on hand is precarious and a larger reserve would be required to set the citizens of Hoboken at ease on the Hospital's financials.
According to Spiros Hatirus the Hospital will need to close a projected revenue gap of $12 million dollars for 2010 and attempt to do it by mostly trimming expenses:
1) Negotiate with Unions.
2) Negotiate for better re-imbursement rates.
3) Seek Affiliation to increase bargaining power over re-imbursement rates.
4) Apply and politic for as much of the $10.7 million stabilization money as possible to help with current operations.
5) Somehow figure out how to get more patients to come to the HUMC rather than go out of town.
The main issue I see with these comments is that layoffs were not the mentioned as a priority. As employee expenses are a big chunk of the expenses these should be on the table. I do understand the sentiment of trying to save jobs but if the hospital is to survive, it must somehow change the way it does business. Perhaps scaling back where it isn't going to do well enough (besides the essential ER which is a loss leader anyway you slice it in an urban area).
A few things still need to be clarified:
Are the HUMC bonds insured? That would mean the City of Hoboken is not necessarily on the hook. The speculative answer given by some of my friends who know more about bonds is probably not.
Are the bonds callable? If they were callable that would mean bond investors could ask for the money at any point in time which could precipitate further financial stress on the hospital.
Update: Answer from reader Katie_Scarlett: "Callable bonds are callable by the the issuer, not the holders. So that is not a concern".
Many hospital workers were there last night and a few citizens to give their support to the Hospital. More on this meeting later tonight.
Perhaps I got a little sense of optimism last night. Primarily this is due to the fact that I assess Spiros Hatirus appears to be genuinely concerned and dedicated to turning the hospital around. I don't see him as a take the money and run type but I have been wrong before. He doesn't have all the answers yet but the record of outside intervention has not been very good in this Hopsital's recent past. Don't get me wrong, I think the Hospital is in a very tough situation now as the economics are just not favorable. At least I left the meeting with the impression that Spiros will try his best to turn this thing around or fail to do so while sticking it out. A lot of jobs and citizens of Hoboken have a lot riding on this one.
Video has been fixed; sorry for the delay!
Spiros Hatirus on the HUMC financials:
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