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Serving the communities of Massena and Potsdam, New York

Gray: Massena Memorial Hospital has an ‘unsustainable (business) model’

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MASSENA - The town supervisor says shortly after he took office he made a suggestion that could have helped Massena Memorial Hospital avoid some of the fiscal problems.

Supervisor Joseph D. Gray said that shortly after he took office about two and a half years ago he suggested that MMH officials use the hospital foundation to hire employees for the facility, a move that could have limited the costly annual contributions to the state’s retirement system.

The suggestion came at a time when changes in the health care field meant more physicians being recruited to come to Massena wanted to be hospital employees rather than having to open their own practices.

By creating a separate corporation or utilizing an existing one to hire employees, MMH could have avoided the costly benefits for its highest paid employees. Mr. Gray said MMH’s current policy of directly hiring individuals is an “unsustainable model.”

“I sounded the alarm two and a half years ago, but for some reason (Chief Executive Officer Charles F. Fahd II and the hospital’s board of managers) chose not to research it,” Mr. Gray said. “First I was told there was no basis for my concerns, but unfortunately over time those concerns turned out to be right.”

Mr. Gray said it may be too late for the hospital to hire individuals through a separate corporation as a full solution to solve its fiscal troubles.

Joseph Ward, a former nurse and former president of the New York State Nurses Association union local at MMH, charged part of MMH’s fiscal woes are a result of mismanagement of finances.

He believes that in the difficult financial times of the last few years the hospital should not have spent approximately $2.95 million to purchase the Seaway Orthopedics Facility last year or $175,000 to purchase the former Linder Veterinary Clinic in 2011. He also pointed out that while the hospital is running millions of dollars in the red each year, the board recently approved a 14 percent salary increase for Mr. Fahd.

Last October, MMH’s board of managers approved a contract that increased Mr. Fahd’s salary from just under $245,000 to $280,000 for this year and to $295,000 in 2014. Several months prior to that decision, Mr. Ward said he negotiated a contract for MMH’s nurses union that gave them a 1 percent salary increase for the remainder of 2012 and a 2 percent increase for both 2013 and 2014.

“We thought we did our part” to help the hospital offset its budget gap, Mr. Ward said.

Mr. Ward acknowledged Mr. Fahd had been considering retirement and said the MMH board officials increased his salary in an effort to convince him to remain in his current post.

But MMH’s board leadership never conducted a search for a potential successor before opting to give the current CEO a double-digit percentage pay raise, according to Mr. Ward.

“I think it’s a whole mismanagement of money,” Mr. Ward said. “I love Massena, but I just think the whole thing is going in the wrong direction.”

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