Testimony of

Public Employees Federation,

AFL-CIO

Kenneth Brynien,

President

before the

New York State Senate Health Committee

Public Hearing on the Final Report of the

State Commission on Health Care

Facilities in the 21^st Century

December 1, 2006

Albany

Thank you, Chairman Hannon, members of the Senate Health Committee for providing the Public Employees Federation (PEF) the opportunity to testify today.

I am Kenneth Brynien -- PEF president.

PEF represents approximately 900 nurses and other health care professionals at SUNY Upstate Medical Center and another 2,000 health care professionals at SUNY Downstate and SUNY Stony Brook – these are all facilities that would be impacted by the Commission’s recommendations.  

We at PEF are very concerned about the Berger Commission’s report.  Throughout the report is an underlying bias against the public sector. 

First, the Commission went well beyond the scope of its mission when it proposed that the privatization of the three SUNY teaching hospitals be studied, and at the same time proposed the privatization of SUNY Upstate Medical Center.  These contradictory recommendations underscore the Commission’s confusion about its authority to recommend the privatization of SUNY hospitals.

The Commission was not given the authority by the Legislature to recommend changes in the operating structure of SUNY hospitals.  Decisions to privatize along with decisions to close or merge hospitals should not be made by a Commission that is unaccountable to the public and appointed by an outgoing Governor.

Moreover, privatization is not supported by any data in the report … and no evidence shows that it would cut costs or increase efficiency.  In fact, based on current trends, private hospitals tend to increase compensation in order to attract an employee, which makes it difficult to believe that privatizing a hospital will significantly cut labor costs.

The report simply adopts the ill-considered, one-word concept repeatedly proposed by the Pataki administration over the past decade – privatize.

Each time the Governor has proposed the privatization of the SUNY hospitals, it has been rejected – and for good reason -- by the Legislature.

No facts, no data, no evidence -- favor the privatization of SUNY hospitals.

Several years ago, SUNY hired a health care consulting firm to gauge the financial health of SUNY teaching hospitals and recommend actions to maintain their fiscal viability.

The PriceWaterhouseCoopers study confirms that three SUNY Hospitals operate more efficiently than 75% of their academic peers.  The report also specifically regards SUNY Upstate Medical Center’s management of its revenue cycle process as a “best practice” among the SUNY hospitals. The Berger Commission makes no reference to PriceWaterhouseCoopers study and offers no evidence to refute its conclusions

Meanwhile, Crouse Hospital – the hospital recommended to take charge of SUNY -- has had a history of financial troubles.

Crouse recently emerged from bankruptcy after running up 91 million dollars in debt.  The hospital must now repay 62 million dollars.  Its occupancy rates meanwhile, are on average under 50 percent.  SUNY Upstate Medical Center, on the other hand, has an average occupancy rate of 80 percent and is financially sound.

We have no issue with the public and private sectors cooperating in their efforts to provide the best level of health care to all New Yorkers. We do not object to the coordination of services or an affiliation between the SUNY Upstate and Crouse but we are opposed to merger under Crouse’s private management– it makes sense that this be done under the aegis of the successful State operating model.

We cannot risk putting the health of profits above the health of our residents.

Too much is at risk.

SUNY teaching hospitals are an important part of SUNY’s educational mission because education and research in the health sciences are an integral part of SUNY’s mission.

Such vital elements must not be left to the private health care sector.

The SUNY Upstate Medical University is Onondaga County's leading employer, and it is where patient care, education, and biomedical research blend to benefit patients locally and worldwide.

The SUNY Upstate trauma center and burn center provide a vital service to the community and 17 surrounding counties, but they provide these services at an operating loss.  A private hospital would unlikely absorb such losses, and would put in jeopardy essential trauma and burn center services in Central New York. 

The Commission, itself, recommends that “New York State reaffirm its historic commitment to health care for the poor and other vulnerable populations,” but fails to acknowledge the important role that teaching hospitals play in providing one of the most unprofitable services to the community – caring for the uninsured and underinsured. 

SUNY Upstate, alone, provided approximately $65 million in uncompensated care.  Who would care for the uninsured if profits were put above people?

The public service that these state teaching hospitals provide does not stop at providing for the poor – these facilities and the physicians that they train provide the latest and most advanced medical care and equipment to their communities. 

While the practice of teaching physicians inherently increases the overall cost of patient care – the physicians that are trained at these facilities tend to stay in New York, providing care to New Yorkers throughout the state. 

Finally, privatization would also have a dramatic impact on employees because they would lose their status as State employees.  This would mean the loss of pension rights, union contract rights, and Civil Service Law protections.  In addition, the communities they serve might lose important health care services if the new private operators felt them to be unprofitable.

Again – no evidence has been presented that privatization of the SUNY hospitals would improve efficiency or the quality of services to the public. The Legislature should once again reject this proposal to transfer the SUNY hospitals to the private sector.  These hospitals should remain part of the SUNY system.

PEF also represents many of the employees who work at Lockport Memorial Hospital. The Commission has recommended that Lockport Memorial Hospital and Inter-Community Memorial Hospital at Newfane engage in a full asset merger and reconfiguration of services.  The employees at both hospitals are represented by different bargaining agents and any merger should protect the hospitals’ employees’ rights to remain with their current bargaining agent.

Thank you for the opportunity to speak on these important issues.  I urge you not to let the Berger Commission take away your authority to decide whether or not SUNY hospitals should remain in the public sector.