Hosp’s $$ Rx a cure worse than disease: audit

SUNY Downstate Medical Center in Brooklyn paid a “restructuring” consultant $34 million to develop plans for cutting costs, but the deal was a bust, a stinging audit alleges.

Pitts Management Associates claimed the restructuring plan saved the struggling Brooklyn hospital $128 million. But state Comptroller Tom DiNapoli re- jected that claim as illusory and said the hospital “did not get what it paid for.”

“Specifically, we could not verify the accuracy of $65,442,000 in savings PMA claimed for labor reductions because PMA’s methodology was flawed and Downstate could not provide sufficient information,” the audit charged.

Some of the reported savings were inflated or misleading, according to auditors. At best, Downstate realized $32 million in savings, about $2 million less than what it paid PMA, the audit said.

For example, the consultant claimed $4.9 million in savings for a reduction in length of patient stays. But, according to the auditors, “In-patient length of stay actually increased during the exami- nation period (2012-2014).”

SUNY Chief Financial Officer Eileen McLoughlin defended the reported labor savings cited by PMA, but agreed with auditors that reported reductions for patient stays were “miscalculated.”

PMA was criticized in a 2016 audit for billing the state more than $83,000 in lavish travel, lodging and dining expenses.