NUMC has struggled financially for years. Healthcare leaders and experts have some ideas.

From its crumbling physical plant to its debt-riddled finances, Nassau University Medical Center's problems are well known.

Finding solutions to the taxpayer-funded hospital's difficulties comes at a time of soaring healthcare costs and a stream of low-income patients. The future holds more competition with NYU Langone announcing plans for a new hospital in Melville. 

So how does NUMC heal itself?

NUMC has been tasked with completing a plan by Dec. 1 with proposals for strengthening the safety-net hospital's operations and finances. It's not yet known what that plan will include, but Newsday has scoured consultants' reports, examined hospital and nursing home data and pressed healthcare leaders and experts for ideas. 

State officials, hospital administrators and experts agree that transformation is necessary. 

"There are going to have to be some major changes," Richard Kessel, the recently appointed chair of the Nassau Health Care Corporation board, which oversees the hospital, said in an interview. "Whether that's infrastructure, financial, what services it provides — there are a whole host of things that we're going to have to look at."

He added, "The hospital can't stay the way it is and survive."

Fixing the hospital will not be a simple task. Any large-scale changes could have significant impacts on NUMC's patients, neighbors, and employees — impacts that hospital leaders will need to consider. 

"Any restructuring, affiliation, partnership, or change in operations must include a plan to protect our members, preserve jobs, maintain our benefits and contractual rights remain intact," Shakira Settles, the president of CSEA Local 831, which represents hospital staff, said in a statement. "Ultimately, protecting the workforce must be part of the strategic plan."

Newsday has spent much of the past year examining the East Meadow hospital’s fragile finances and operations. The series of stories has examined how the facility is among the most financially troubled in the state; how it serves a disproportionate amount of patients on public insurance; how efforts to add specialized and profitable services have failed; and how a foundation intended to support the facility spent thousands on parties.

Here are five changes that NUMC could make to ensure it stays open well into the future.

1. Sell or lease real estate

The Nassau Health Care Corporation, the parent company of NUMC and A. Holly Patterson Extended Care Facility,  owns two campuses totaling roughly 115 acres in the middle of Nassau County.

NUMC’s main building is a 19-story, roughly 1-million-square-foot tower — the tallest building in Nassau County — on a 51-acre campus in East Meadow. A. Holly Patterson, in Uniondale, spans nearly 500,000 square feet and sits on a 63-acre campus. NUMC has 530 beds, while A. Holly Patterson has 589.

Over the years, hospital administrators, consultants and outside officials have repeatedly said that those facilities are far too large.

In 2020, a report by consultant Alvarez and Marsal noted that NUMC’s tower even had two "shell floors" that were never even "built out (and doing so would be at substantial cost)."

Even those floors that contain beds are not full. According to state data accessed in August, NUMC has had nearly half of its beds unoccupied for much of the month — nearly double the statewide rate. Occupancy rates fluctuated between 60% and 70% from 2011 to 2023, according to federal data.

What's more, the existing facilities are in bad shape, with the hospital plagued by stress cracks, leaking pipes, and faulty heating, ventilation and air conditioning, Newsday reported recently. Thomas Stokes, the hospital's president and CEO, told Newsday last month that building a new hospital would be cheaper than repairing all of its crumbling infrastructure.

On the hospital's campus, "there's so many vacant buildings right now that, frankly, need to be condemned," Stokes said. "And they were just kept in place because of the cost of condemning them and knocking them down, I assume."

Unloading some of the hospital’s real estate could also provide a much-needed cash injection. In 2020, consultants noted that a recent appraisal had valued the land at over $100 million — a figure that has likely increased in Long Island’s red-hot real estate market.

Selling or leasing some amount of that land could provide much-needed cash flow to the hospital, experts say: "The current real estate portfolio within NHCC is a substantial asset that can play a role in meeting operating and financing liabilities of NHCC," according to the Alvarez and Marsal report.

2. End low-volume services

Nassau County sits in one of the most competitive healthcare markets in the country, where patients have a large menu of healthcare facilities to choose from.

In that environment, Nassau County’s expenditures on specialty services raise questions. The hospital treats relatively few patients in many of its specialized service lines, according to expert analyses and the hospital’s own data — a fact that has troubling implications for the quality of those services.

"It's generally considered that, from a quality perspective, if you do a high volume of services, your quality tends to be better," Wendy Darwell, the president and CEO of the Suburban Hospital Alliance of New York State, said in an interview. "Repetition makes everybody better."

With multiple highly-rated hospitals just a short journey away, consultants have argued for years that NUMC should trim service lines that draw few patients.

You want to leverage the strengths that you have, and look for where there are opportunities in the market that aren't already being met.

— Wendy Darwell, Suburban Hospital Alliance of New York State president and CEO

"While NUMC has numerous specialty clinics, and while NUMC maintains Level I Trauma Center designation and operates specialty units (Burn Center, Hyperbaric Chamber), the volumes of patients treated in those specialty settings is relatively small," reads a 2004 report by the healthcare law firm Manatt, Phelps & Phillips.

The report recommended that NUMC consider cutting a slate of specialty services, including neurosurgery, ophthalmology and plastic surgery.

More recently, one of the options considered by the 2020 Alvarez & Marsal report involved ending ophthalmology, pediatric and OB-GYN services.

Newsday reported earlier this year on the hospital’s expensive and ill-fated attempt to start up a premier neurosciences unit — highlighting the difficulties of competing with nearby hospitals with well-established specialties.

"You want to leverage the strengths that you have, and look for where there are opportunities in the market that aren't already being met," Darwell said. "That's more challenging in a market like Nassau County that has many hospitals with very high level services."

3. Work with other healthcare networks

NUMC is an increasingly rare breed in the world of healthcare: it's a standalone hospital, rather than part of a larger hospital network.

Over the past several decades, healthcare networks — such as Northwell Health, Mount Sinai, NYU Langone, Catholic Health — have expanded across New York, snapping up independent hospitals and providers.

Being part of one of these networks comes with significant benefits. They are able to take advantage of efficiencies and economies of scale that single hospitals cannot — making it easier to buy equipment, drugs, software and more.

Perhaps most importantly, healthcare networks have much more leverage when it comes to negotiating with health insurance companies. That means that larger networks are able to command higher reimbursement rates, and thus greater revenue, from insurers.

For a member of a larger network, "you're in a bigger system that's negotiating insurance contracts with more leverage in the marketplace, buying its supplies as a bigger purchaser, taking advantage of physician and other clinical contracts," Darwell said.

For NUMC, a public, taxpayer-backed facility, such benefits would be significant. The state has even provided funding to incentivize safety net hospitals to partner with other healthcare organizations to help them become more financially sustainable.

"I think that's a great idea, if others would do it," David Nemiroff, the president and CEO of Harmony Health Care, a nonprofit network of community healthcare clinics that works closely with NUMC, said in an interview.

That’s a potentially tricky part: Making such a partnership worth it to the other partners.

But, "If you could bring in some of these systems, and they'd be willing to work with you, and understand who your payer mix is, and support in some way, shape or form, and do a little bit of a community benefit back to the hospital, and maybe the state would support in some way — then, yeah, why not?" Nemiroff said.

"The current governance structure needs to be fully examined and changed in order for any future operating model, including partnerships with other local providers, to succeed," a consultant report read.

4. Find a new operator for the nursing home

A. Holly Patterson is, like the rest of NHCC, operating below capacity. Over the past several years, its occupancy rate has stayed consistently below New York’s overall rate, according to data compiled by LeadingAge New York, a nonprofit that represents long-term care facilities. 

It has also consistently lost money: from 2020 through 2024, the nursing facility lost roughly $130 million, according to NHCC's audited financial statements.

"This is an enormous drain on NHCC resources for an entity that should be self-supporting," determined the 2020 Alvarez & Marsal report. "There are ample unoccupied long-term care beds in Nassau County that could readily absorb AHP residents."

Public and nonprofit-operated nursing homes are struggling, industry leaders say.

One of the main problems is that "what they do tends to be geriatric care for Medicaid-insured residents," Art Gianelli, who ran NUMC as chief executive from 2006 to 2014, said in an interview. "You cannot, cannot, cannot, cannot make money."

Many facilities have been sold to for-profit operators in recent years — a possibility that could provide a cash injection to NUMC, according to the Alvarez & Marsal report. "There is also an active market in New York for the sale of nursing homes," the report reads.

In light of that, Gianelli, now president and chief transformation officer at One Brooklyn Health, contends that NUMC should not even be in the business of running a nursing facility.

"I don't actually think there's an argument or a mission statement that's relevant" as for why NUMC should operate A. Holly Patterson in addition to a hospital, he said.

5. Revamp foundations

Newsday reported in July that one of NUMC’s two foundations spent over $150,000 on parties for staff and executives — a sum that includes $10,000 for a gala at Gracie Mansion and nearly $2,000 for a limo service to that event.

The hospital’s other foundation — the NuHealth Foundation, whose stated purpose is fundraising — has more or less gone dormant, Newsday reported.

From 2020 to 2024, the most recent year for which tax filings are available, the NuHealth Foundation raised and spent about $260,000 each year. On average, nearly 40% of that spending has been used to pay the executive director’s salary.

That raises questions about whether the foundation could be more effective.

The Erie County Medical Center Foundation, for example, which supports a hospital with a similar governance structure and number of beds, raised and spent an average of about $3 million from 2020 to 2024 and used an average of 11% of its spending for executive salaries.

To raise the most money, hospital foundations need staff who are professional fundraisers and a well-connected board, Kim MacPherson, a professor who teaches courses on healthcare at the University of California, Berkeley’s Haas School of Business, said in an interview.

That board should be a "separate board from the hospital board, and not political in the sense that they're appointed by the county or whomever, but political in that they know how to move in circles where the money is," she said.

MacPherson, who previously served on the board of a safety net hospital, noted that Nassau County — one of the wealthiest counties in the country — has plenty of potential donors.

Kessel, the chair of NUMC’s board of directors, said in an interview last month that the board has set up a committee to examine the foundations’ practices, and to determine whether or not to shut them down.

"If we can develop and put together a strong foundation with a strong mission, and interest some people who are philanthropic to contribute, that is a good source of revenue for the hospital," Kessel said. "But it has to be done right."

Former Newsday Associate Editor Joye Brown contributed to this story.