April 6, 2005

COUNTY STEPS UP TO THE PLATE TO JUMPSTART OPERATION CURE FOR MEDICAL CENTER

Board of Legislators Chair Bill Ryan, County Executive Andy Spano and Board Budget Committee Chair Michael Kaplowitz announced that Westchester County has a revised financial plan that will remove the dark cloud of fiscal uncertainty hovering over Westchester Medical Center, most seriously in the past year. When implemented, the plan will result in a county infusion of $27 million in cash for use by the medical center on an "as needed" basis and a county assumption of $10 million in operations costs. This amounts to $17 million more than the $20 million the county was asked to contribute by management in its Operation Cure plan, released in February by hospital management, as a strategy to return the Medical Center to fiscal stability.

"This monetary commitment isn't a shot in the arm, it's a life-saving transfusion," said Ryan. "The patient isn't out of the woods yet, but the vital signs are about to become much stronger."

Ryan, a member of the Medical Center's Financial Improvement Committee, said, "Without the immediate cash flow crisis hanging over its head, the Medical Center's interim management team can continue the substantial progress it's been making. Many critical changes have already occurred at the Medical Center and more are on the way. We can't allow things to stop. We can't allow the Medical Center to fail because we didn't provide it with enough time for further improvements and enhancements to take root."

The county will raise $27 million by refinancing the County's "tobacco securitization bonds" originally sold in 1999. The bonds originated from settlement proceeds from litigation against tobacco manufacturers.

Kaplowitz, who also chairs the Board's Oversight Subcommittee on the Medical Center, called the plan "a triple play," saying, "With lower interest rates, it makes sense to refinance, just like millions of homeowners have done with mortgages. Further, we're able to shift more of the risk that the tobacco companies will reduce their payments from our taxpayers to the tobacco bond holders. Finally we're able to free up money that had been held in reserve and use it to help save our Medical Center. Everyone benefits from these actions."

The refinancing and infusion of cash now will allow the other measures called for by Operation Cure to be realized. These include a management projected $20 million in efficiency savings; $20 million in concessions from the hospital's unions; $20 million contribution each from the the state and the federal government; and, a hoped-for extension of an existing 1/8 percent sales tax in the Hudson Valley region in the seven counties the hospital serves.

Spano said his fellow county executives from the other six counties in the Hudson Valley region that depend upon the Westchester Medical Center were in agreement that the Medical Center was a vital regional institution. "The Medical Center is a regional hospital with 40 percent of its patients coming from outside Westchester. The long-term solution must be a regional one," Spano said.

The plan is for the seven Hudson Valley region county executives to press the the state legislature for the sales tax extension, impressing upon them the fact that this hospital isn't just about Westchester, it's about the health and welfare of the entire population of the Hudson Valley.