Dan's Papers - August 17, 2007 - Is Southampton Hospital To Be On The Move?

Over the past ten years, Southampton Hospital has had a total of five Presidents, all of whom have taken their big salaries and golden parachutes, said or done almost nothing and then moved on.

Now we have a president, Dr. Robert Chaloner, who has hit the ground running. And the things he has in mind are quite fascinating.

He says that the current Southampton Hospital, which sits on a hodgepodge of property totaling about a dozen acres in the middle of an upscale residential area, is getting obsolete and within a few years WILL be obsolete. He said that the hospital was built in the 1930s, when hospitals had to have a lot of rooms with patients in them and then a few treatment and rehab rooms for surgeries. Now the focus is on big rooms where the expensive technical medical equipment can be housed and operated and lots of treatment rooms and emergency rooms with just a few beds and overnight facilities.

On that score, he says that Southampton Hospital needs to be replaced or seriously renovated within the next ten years. It is true that the hospital is not only obsolete, but also in poor physical condition. Also, there is not enough parking. And thought they are licensed as a 140-bed facility, they only use 100 of the beds because that is the most that their currently configured staff can handle. Also the emergency room is too small and the Intensive Care Unit is too far away from the emergency room for them to share staff.

Dr. Chaloner is quick to say that all this is just in the fact-gathering stage and no decisions have been made. But his staff has found, while doing the fact gathering, that building a brand-new hospital somewhere nearby would actually not cost any more than the great renovation that would need to be made to the current facility to get it up to speed. Furthermore, a new building would be more energy efficient and that alone could save as much as 5% of its annual budget each year.

He's thinking of some other spot -- he doesn't say where -- that would be accessible to the Montauk Highway, but not necessarily in an upper-class residential zone. He's looking slightly westward. More than 400 of his 600 employees live to the west of the Shinnecock Canal, and the commute is a hardship for them. At least three of them in just this past year had to resign because the delays in getting to work from the west were just too much for them.

What was completely left out of Mr. Chaloner's speech was the great elephant in the room -- the huge, overhanging financial obligation the Hospital has to a whole group of banks. Ten years ago, under the aggressive, enthusiastic and imaginative leadership of Dr. John Ferry, the hospital expanded dramatically. A concierge was put in place. They had valet parking for a while. The whole interior was redone to make it look like an expensive hotel. And before anybody knew it, the handsome, always smiling Dr. Ferry had blown through the $10 million endowment that the hospital had husbanded for years and had spent its way into a $40 million debt, which was papered over so nobody would know about it by the simple expedient of running the place into the ground and financing it at high interest rates with banks. Blame it on the board of trustees, who just never bothered to notice what was going on -- for years.

Since that time, a whole string of presidents have come to the hospital, noticed this huge debt and its annual $3 million interest obligation that basically dropped the hospital into a hole it could not get out of and then walked away. Hard times had come. And unless the banks were going to forgive the debt, which bankers never do, the hospital would just have to stagger from pillar to post until hell froze over.

The banks did have all the land, after all, as collateral.

Well guess what? Dr. Chaloner, in just his first 60 days here, has looked down and noticed that the land he is walking on is very, very, very expensive stuff. It is near the ocean. It is in an upscale neighborhood. Buy property somewhere else, where real estate prices are low but the location is convenient, sell this expensive acreage and the big old hospital building to developers and you will still have enough left over to both pay off the bank and finance the building of a new hospital on a cheaper plot.

Bingo. End of problem.

This is such a huge idea, it seems to me, that at the present time, Dr. Chaloner is doing what marketing people call "preparing the ground." It's just an idea. The current building is falling apart. It's set up wrong. There's no parking. We're going to have to do something soon. But honestly, I don't know what. Maybe we'll muddle through. Oh, well. (Wink, wink.)

It's a wonderful idea, actually. But from the idea to the bricks and mortar there are a great many pathways down which it is probably not a good idea to go. The hospital shouldn't wind up too far to the west. But if it does anyway, then it should have a beefed up medical unit in East Hampton. Getting hurt really badly to the east of Amagansett is really not a good idea these days. You're too far from Southampton Hospital to get there in a decent amount of time. The traffic is awful. In an emergency, they can chopper you out, but then you might spend the extra ten minutes and zip over to Stony Brook Hospital. So our original old mortar and brick building, set up for 300 patients in 150 rooms, is a bride left at the altar.

I think this can all be done. It is going to take a little while to get it through all of our thick heads that this has to happen, but if we focus hard and all stick together with that goal in mind, we can do it. And we'll all be healthier and safer and better for it.