The parent company that runs Nassau University Medical Center reported a deficit of $1.4 billion at the end of last year, prompting auditors to cast "substantial doubt about the corporation’s ability to continue" for the seventh year in a row.

A draft financial statement obtained by Newsday paints a dreary picture of the troubled hospital, which lost $144 million last year — $2 million more than it lost the year before — threatening its ability to treat a large share of Nassau's low-income and uninsured patients, according to auditors.

Newsday obtained the records on the heels of state officials approving a plan to take added control of the hospital board, giving Gov. Kathy Hochul the power to appoint a new chair as soon as June 1. That move follows a tumultuous several months, with Nassau County Executive Bruce Blakeman ousting former hospital chairman Matthew Bruderman after he alleged someone broke into his Centre Island home and stole documents tied to an FBI probe of the hospital.

"The bottom line is that the governance and management at that hospital need a complete reset," said Richard Kessel, president of the Nassau Interim Finance Authority, the county’s fiscal watchdog agency that oversees NUMC's finances. "This hospital is bleeding."

Tom Basile, a spokesman for NUMC, said the hospital's deficit in part stems from employee salaries and benefits that were negotiated long before the hospital's current leadership took over.

"You can't help create a problem, blame someone else and then claim to be the solution, but that appears to be what NIFA and the state intend to do," Basile wrote in a statement, adding that the hospital's care load has increased by 20,000 patients in the last year.

CEO Meg Ryan led the hospital in increasing the hospital's operating revenue by 6% from 2022 to 2023 by collecting payments on unpaid bills ignored by past leadership, Basile said. The state has also depleted its cash aid to the Nassau Health Care Corp., NUMC's parent company, awarding $188 million in 2017, then $48 million in 2022 and $0 last year, he added.

NUMC reported that its obligations exceeded assets by $1.2 billion in December 2023, just before Ryan became interim president and CEO the following month. By the end of 2024, as Ryan became the permanent CEO, that deepened to $1.4 billion, a warning sign according to auditors about the hospital's overall fiscal health. The hospital's operating losses, a closer look at its business operations, also grew from $142 million in 2023 to $144 million last year — putting the organization at a 24% loss margin. Its total operating revenue dropped from $615 million in 2023 to $599 million in 2024, records show. 

"Taxpayers are putting money into a money pit," said Ge Bai, a professor of health policy and management at Johns Hopkins University.

"If this was a private entity, a 24% loss margin would indicate imminent financial troubles," she said, adding that the hospital faces a "huge" bankruptcy risk. "It's not like there's not enough money ... It's being poorly managed."

The hospital will eventually need to lay people off and shut down departments that are not considered profitable to continue operating, like obstetrics and gynecology, Bai said.

But operating at such a deficit is not uncommon for public hospitals, and a state takeover is not likely to improve NUMC’s financial health, she added. Hochul also approved $50 million in aid to NUMC earlier this month.

NUMC is one of the state’s so-called Disproportionate Share Hospitals, meaning it is legally entitled to special funding to cover costs for treating low-income and uninsured patients. It is the only such hospital in Nassau County that treats patients regardless of their ability to pay for care.

Erie County Medical Center, another DSH-designated hospital upstate, ran a 20% loss margin last year, records show. Westchester Medical Center ran a 1% loss margin in the same time frame, reporting a net loss of $496 million last year.

NUMC executives have in part blamed state officials for the hospital’s fiscal downfall, filing a $1 billion lawsuit last year alleging the state has for years withheld funding it is legally entitled to for treating a large share of low-income patients. The hospital launched a media campaign against Hochul, stirring rumors that the hospital would shut down without an injection of state money.

State officials threatened to fine the hospital last week for dodging reporting requirements. According to a letter obtained by Newsday that the state Department of Health sent Ryan, NUMC officials stopped reporting data on open patient beds, ICU capacity and COVID patients — data the state monitors daily to prepare for emergencies. The hospital has resumed required reporting since receiving the letter, officials told Newsday.

NIFA also sent a letter to the hospital last week, demanding the board's new chairwoman, Dr. Irina Gelman, not "interfere with the transition to new leadership" and warning her that the hospital’s parent company "is required to preserve its documents."

"I’m very concerned about what the current administration is doing and I wanted to put them on notice that we’re watching," Kessel told Newsday.

The letter also reminded Gelman of a state law requiring the hospital board to have the required number of members present before passing legislation in its monthly meetings. The board voted on legislation in its last meeting on May 8 despite not reaching the requisite number, instead passing measures in executive session.