How much is Burdett really losing?
The Times Union editorial board pointed out a number of flaws in the plan to close the Burdett Birth Center, calling the work “downright sloppy” (“Closure plan falls short,” Jan. 17). I would like to mention another aspect of the proposed closure that could also be sloppy.
Since the announcement of the proposed closure, St. Peter’s administrators have claimed they are losing $2.3 million per year operating the birth center. That figure has been accepted by reporters, elected officials and closure opponents.
Hospital finances are a complex maze with multiple expenses, offset by multiple revenue sources, that ultimately produce a bottom line. Lacking the time and raw data to sort out these factors, we rely on the word of hospital administrators, who have an incentive to make the “loss” look as bad as possible. How do they accomplish that?
First, they look at how expenses are allocated. In addition to the direct cost involved in each birth, hospitals have expenses for administration, maintenance, utilities, bond payments, etc. It would be easy for the St. Peter’s administration to allocate a higher proportion of these expenses to the birth center.
Next, they look at revenues. In addition to the specific payments for births from health insurance carriers, Medicare and private co-pays, hospitals receive funds from wills, foundations, corporate gifts and individual donors that are not designated for a particular service or department. I doubt that the St. Peter’s administration used any of these funds to reduce the $2.3 million “loss” they attributed to the birth center.
Samaritan Hospital has a foundation with the mission of providing financial support to the community. The chair of that foundation revealed they have never been asked to raise funds to support the birth center.
St. Peter’s can try to make the “loss” numbers sound bad. I do not have a specific figure to counter their claim. However, I am certain the real number is much less than $2.3 million.
Jim Flanigan Wynantskill