MASSENA If the status quo remains, Massena Memorial Hospital will be bankrupt by 2017, according to a report from financial consultants hired by the hospital in November.
Right now there are not a lot of options, hospital CEO Charles F. Fahd II told the Board of Managers on Monday night.
We can continue to lose money and eventually go bankrupt. That bankruptcy will take place in a couple of years. We can ask the community to support the hospital through taxation. I dont think that is a viable option. Or we can cut millions and millions of dollars out of our budget. That would be a reduction of people and a reduction of services, Mr. Fahd said.
Certified public accountant Alan Gracie, a director with FreedMaxick Healthcare, said the firm has been working with hospital managers to assess the financial impact under a couple of scenarios: maintaining the status quo or converting from a municipally owned hospital to a 501(c)(3) not-for-profit organization.
On the other hand, Mr. Gracie said, the hospital would have a small operations loss in 2018, but would have $6.6 million in cash and equivalents on hand if it changed its status to a not-for-profit organization. The primary take-away is the not-for-profit scenario appears to offer a clear financial advantage to the institution, Mr. Gracie said.
Mr. Fahd projected the hospital would need to cut $4 million annually if it maintained the status quo.
According to the report provided to board members Monday, under a status quo scenario and with the projected deficit in 2017, the town of Massena would be required to fund the deficit through the tax rolls at an approximate tax levy increase of $3.2 million per year or risk bankruptcy or receivership.