LOWVILLE Lewis County General Hospital is seeking permission to remove its administrative team from the state retirement system to curb skyrocketing pension costs.
We have spent a lot of time recently looking at ways to strengthen the financial situation at LCGH while maintaining the services we provide to the community, said Eric R. Burch, CEO of the county-owned hospital, in a statement. The possible creation of an LLC (limited liability corporation) for administrative staff will save the hospital more than $100,000 each year. While this step alone wont overcome the challenges we face, it is a step in the right direction.
Hospital officials said they are looking to make the switch around Jan. 1 but first will need approval from the state comptrollers office and the state Department of Health.
The proposed corporation would include eight hospital administrators: Mr. Burch, Director of Nursing David Wood, Quality Assurance Coordinator Jean Dryja, Nursing Home Administrator Joseph Todora, Director of Plant Operations Thomas Ferguson, Director of Ancillary Services Michele Prince and Human Resources Director Timothy Ryan, along with whomever is hired as permanent chief financial officer.
Under the proposal, they would switch from county to private employees, with the hospital to contract with the group for administrative services.
No other hospital workers would be affected by the move.
The projected savings would come from moving the eight employees out of the state retirement system into a comparable private retirement package that would be less costly to the hospital.
The administrators, so long as they are fully vested in the state system, would retain any accumulated benefits but would not add to them after losing classification as public employees.
As with municipalities throughout the state, Lewis County General Hospital has seen a large spike in payments into the state retirement system over the past several years. Annual pension costs at the facility, payable to the state each December, have grown from $1.6 million in 2009 to a projected $4.8 million for this year.
The administrators, if removed from county employ, also would become ineligible for the countys health insurance plan.
While the hospital would provide an alternate health plan for active administrators, county legislators have already taken steps to ensure the seven current ones could retain the countys health plan upon retirement, giving them an incentive to stay on if the LLC comes to fruition.
Hospital workers who retire directly from county service after at least 10 years may retain health-care coverage under the county plan through their retirement. Lawmakers voted 10-0 on Tuesday to offer the same benefit to any of the seven who retire from the administrative LLC after 10 or more years of combined employment under the county and LLC.
The Board of Legislators hereby finds and determines that the savings from no longer making retirement system contributions on behalf of such administrators far outweighs the costs of amending the Lewis County Health Plan to provide such benefits upon the administrators retirement, the resolution stated.
The hospital has a year-to-date operating loss of more than $1 million.
Legislator Michael A. Tabolt, R-Croghan, chairman of the legislative Hospital Committee and a member of the hospital board of managers, said a preliminary report by the Bonadio Group consulting firm indicates that next year could also show a significant loss unless corrective actions such as the proposed administrative switch are taken.
This is just another step to secure Lewis County General Hospital so that it can remain a Lewis County hospital, he said.
Julie Glenn, president of the hospital bargaining unit of the Civil Service Employees Union Local 825, earlier in the meeting had urged legislators to keep the facility public, citing examples of formerly public nursing homes in Delaware and Fulton counties that have seen massive staffing cuts and even a shutdown after being privatized.