Many officials project ‘catastrophic’ impact if Northside closes
Union officials at Forum Health are relieved by the announcement by the Pension Benefit Guaranty Corp. that it will pay the pensions of some of the hospital system’s 7,000 retirees and future retirees.
Buzz Pishkur Leaves Forum
Walter “Buzz” Pishkur, Forum president and chief executive officer, has resigned his post effective today.
Youngstown would lose about $1.5 million annually in city income tax.
By WILLIAM K. ALCORN
VINDICATOR STAFF WRITER
NEWS ANALYSIS
YOUNGSTOWN — Does the ouster of Walter “Buzz” Pishkur as Forum Health’s chief executive officer mean the closing or downsizing of the financially strapped Northside Medical Center isn’t far behind?
And if that happened, what would be the impact on the community and Forum’s employees?
Forum filed for protection under Chapter 11 of the U.S. Bankruptcy Code on March 16. An agreement reached between Forum Health and its creditors this past weekend would seem to provide a temporary measure of security for Northside.
Forum also operates Trumbull Memorial Hospital in Warren and Hillside Rehabilitation Hospital in Howland.
The deal led to Pishkur’s resignation and creditors taking off the table a termination plan for Northside and working with Forum toward a consensual reorganization plan expected to be finalized by the end of the year.
But Northside’s long-term future remains the subject of much conjecture. Northside is not just a medical facility; it also has 1,400 workers, making it one of the city’s largest employers.
Youngstown would lose about $1.5 million annually in city income tax if Northside closed, said city Finance Director David Bozanich.
“They’re a major economic driver in the city, particularly on the city’s North Side,” Bozanich said. “The employees have a tremendous impact on the small businesses around the hospital.”
Youngstown has a 2.75 percent income tax on wages earned by those working and/or living in the city, which is expected to fuel about $41 million in income tax collections this year.
The city already is facing financial hardships with city officials expecting the general fund to finish this year with a shortfall of more than $1 million.
The city’s finances would be worse if it didn’t recently lay off seven full-time workers and 11 part-timers, and make other cuts.
If Northside closes, there is no doubt the city would have to eliminate more of its employees and make deeper budget cuts to make up for the income tax shortfall, said Youngstown Mayor Jay Williams.
But losing the medical facility wouldn’t only be devastating to the city’s finances, the mayor added.
“It’s access to health care and the quality of health care that would be lost,” he said. “There’s not an institution, individual or business in this community not adversely impacted if the Northside Medical Center closes. No one in the Mahoning Valley would escape the impact of the closing of Northside.”
Those in need of medical care would go elsewhere taxing the area’s health-care system, Williams said.
The impact on others
The closing of Northside would eliminate jobs not just at the hospital, but also at suppliers, said Walt Good, vice president of economic development at the Youngstown/Warren Regional Chamber.
Even if some workers, such as nurses, found other jobs, the city would suffer an overall loss of jobs and income tax revenue, he said.
The chamber is working on determining the overall impact on the community, he said. Chamber officials may talk to some local suppliers to see just how many local jobs are at risk, he said.
“We’re talking office supplies, medical supplies, linens. Any service function we’re trying to look at,” he said.
“If Forum drops Northside ... the worst case is a vacant building. You would hope someone would come in and operate it to some extent. But, keeping all of Forum’s operations viable is the community focus at this point,” Good said.
Keeping the faith
Eric Williams, president of the Youngstown General Duty Nurses Association’s 400 members at Northside, said Pishkur did more to help Northside and Forum than all the other recent CEOs combined.
“We have a reorganization plan to become profitable for each of the next three years, based on union concessions, which are set to take effect this month, and other internal cost-cutting measures initiated under his leadership that have begun to bear fruit,” Williams said.
“The creditors’ plan has been all along to get rid of Northside, by selling or closing, which would then force liquidation of TMH so they [the creditors] could get at TMH’s money and get out of town. It appears the creditors wanted to act before Northside could prove it could be profitable,” Williams said.
Of the 1,400 jobs at Northside, more than 400 are nurses.
“The loss of Northside would devastate the local economy. These are good-paying jobs,” he said.
Williams confidence is buoyed by the hope that Forum and the creditors will reach consensual agreement on a reorganization plan that has Northside profitable for the next three years — 2010, 2011 and 2012 — with no layoffs involved.
Linda Warino, staff representative for the Ohio Nurses Association, said she refuses to even consider what would happen if Northside closes.
“I may be naive, but Michael Seelman [Northside chief operating officer] told us in front of a room full of community leaders and state legislators that the plan hasn’t changed, and I expect the plan to be followed,” Warino said.
‘You can’t operate at a loss’
Thomas Connelly, president of American Federation of State, County and Municipal Employees Local 2026, which represents 425 workers at Trumbull Memorial, including registered nurses, has a different take on the events of the past few days.
He said he was surprised at the way it played out, but considered Forum not filing a reorganization plan by the Sept. 15 deadline “tweaking the bankruptcy judge’s nose.”
“We feel, respectfully, that we’ve known all along what the plan is: Northside needs to be made smaller and economically viable and live within its means to get creditors off everybody’s back,” Connelly said.
Connelly believes there will be drastic changes at the Youngstown hospital; and is hopeful that the Warren hospital will continue to make improvements and stay on course.
“I don’t debate that we need two hospitals in Youngstown, and I don’t want to see Northside demolished and gone. But, you can’t operate at a loss. I don’t want to see anybody lose their jobs, but neither do I want to see everybody lose their jobs,” Connelly added.
“If the whole thing [Forum)] was to crash, the loss of jobs and revenue to the tax base would be catastrophic.”
What’s next for Northside?
In a prepared statement Monday, the creditors, through their spokesman Lance Ignon, said: “The agreement stems from a shared desire among all the parties, including the lenders, to develop a consensual reorganization plan that will stabilize Forum and allow it to continue serving the community for years to come.”
But, the agreement also grants the creditors’ wish that an interim CEO with health-care experience be hired to run Forum.
One of the knocks on Pishkur was that he came to the job without that experience beyond serving on the Forum Board of Trustees.
The nurses’ union at TMH issued a “vote of no confidence” in Forum’s management and board. In bankruptcy court filings, the creditors also criticized Forum’s leadership.
The new leader
“In conjunction with the employees, Buzz Pishkur did more to help position [Northside] as a viable entity than had been done by everyone else in the previous several years,” Mayor Williams said. “He was an unyielding force against those who wanted Forum to jettison Northside.”
Williams wants Pishkur’s replacement to have that same commitment to keeping Northside open.
“We need to be very cautious with who is chosen as his replacement,” Williams said. “I’m very concerned that a replacement not digress from the progress made by the employees and Buzz. We seem to have finally pointed the ship in the right direction. I’m concerned about the liquidation of Northside under new leadership.”
“I believe Forum is on the right path. The creditors have accepted the reorganization plan, but I’m not privy to what it is,” said Connelly, who thinks Forum will have an interim CEO in place by the beginning of October.
But, he said, “we are displeased this had to be necessary. Now, we are again faced with somebody coming in from the outside who will likely institute huge changes in our lifestyle and working conditions. It’s just one more part of the roller coaster ride we’re on,” he said.
Asked to elaborate on Monday’s prepared statement and discuss the likelihood that Northside would remain a part of Forum, Ignon remained guarded late Tuesday, writing “We would prefer to see Northside remain a part of Forum Health, as long as the restructuring committee and the new CEO can find a way to make the facility financially viable.”
alcorn@vindy.com
Contributors: Don Shilling, business writer, and David Skolnick, political writer.