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BUFFALO, NEW YORK; December 30, 2009-The Board of Directors of Erie County Medical Center Corp. and Erie County Executive Chris Collins announced today that the board unanimously approved an historic financial settlement reached between Erie County and the health system.  

The agreement, which settles a lawsuit ECMCC filed in 2005, resolves and clearly defines the county's future financial obligations to ECMCC, providing assurances for hospital leadership and county taxpayers.  The agreement also paves the way for ECMCC to move forward in its partnership with Great Lakes Health and ECMCC's plans to build a Center of Excellence in Organ Transplants and expand orthopedic services. 

Under terms of the agreement, the county's annual operating funding to ECMCC will be $16.2 million, as long as ECMC remains a public benefit corporation.  The 2005 lawsuit left that issue unresolved and could have resulted in county budget uncertainty in 2010 and beyond.  

The centerpiece of the new agreement involves building a replacement for the current Erie County Home in Alden.  The plan calls for a new facility on ECMC's Grider Street Campus at a cost of approximately $105 million that will replace the currently outdated buildings.  In addition to shifting jobs to Buffalo, the new facility will add development to the city's East Side.  

Also as part of the settlement, ECMCC agreed to reduce the county's current capital obligation to ECMCC from $23 million to $11.5 million and earmark it toward construction of the new facility on Grider Street.  ECMCC will continue to pay the bond debt incurred when the public benefit corporation was established in 2004. 

The settlement agreement includes the transfer of buildings and land between the county and ECMCC.  The parties have agreed to trade ownership of certain buildings on the Grider Street Campus and to demolish eight currently unused structures to make way for future development.  After construction of the new Erie County Home, the county will retake ownership of the Alden building.  The Erie County Legislature needs to approve the agreement. 

Finally, the parties reached agreement on retirement liability for employees at ECMCC.  The issue involved ECMCC's creation as a public benefit corporation in 2004 and the determination of who was responsible for retirement liability of employees hired when the county ran the system prior to 2004.  The agreement focused on the retirement of employees, rather than the hiring dates of employees.  The settlement agreement determines that the retirement liability of employees who retired prior to Jan. 1, 2004 is the responsibility of the county and the retirement liability of employees who retired after Jan.1, 2004 is the responsibility of ECMCC.  

"This settlement agreement is a win for this community in countless ways," said County Executive Chris Collins.  "For taxpayers, it assures a fixed subsidy and defined capital investment for ECMCC, taking a financial unknown off the table and allowing the county to accurately budget and plan for years to come.  For ECMCC, it provides an appropriate subsidy in recognition of ECMCC's growing obligation to care for our community's most vulnerable citizens." 

"For our aging population, the settlement agreement dedicates funding toward building a new nursing home with a mission of providing skilled nursing care to indigent seniors," continued Collins.  "And for the future of health care in Western New York, it allows ECMCC to move forward with its plans to build Centers of Excellence in Orthopedics and Organ Transplants, improving the level of medical care in our community." 

"As ECMCC works to create a new pre-eminent health care system with Kaleida and Great Lakes Health, this agreement brings financial certainty that will help us plan for better health care for our patients," said ECMCC CEO Jody Lomeo.  "I want to also commend the ECMCC board, because as a taxpayer I too am pleased that we can bring funding certainty to our county government when it comes to ECMCC as it continues to serve Erie County's residents." 

The settlement emerged after Collins appointed a panel late in 2008 to agree on county-ECMCC issues that needed resolution.  The panel met, identified the issues, and sought to have counsel for the respective parties conduct negotiations.  ECMCC counsel Anthony J. Colucci III and Erie County attorney Cheryl Green negotiated the agreement with direction from the county executive and ECMCC leadership.  Toward the end of the process, Collins and Lomeo met to compromise on larger issues in the agreement. The ECMCC board approved the 17-page agreement Dec. 22 and it will be signed before Dec. 31. 

"This is another step in the collaboration of the many parties involved in Great Lakes Health," said Robert Gioia, chairman of the Great Lakes board.  "Everyone involved in this complex effort to make health care in Buffalo and Erie County world class continues to keep their eyes on that goal and work effectively toward it." 

The ECMC Corporation includes an advanced academic medical center (ECMC) with 550 inpatient beds and 136 skilled-nursing-home beds, on- and off-campus health centers, more than 40 outpatient specialty care clinics and the Erie County Home, a skilled nursing facility.  ECMC is the regional center for trauma, burn care, rehabilitation and is a major teaching facility for the University at Buffalo. Most ECMC physicians, dentists and pharmacists are dedicated faculty members of the university. More Western New York residents are choosing ECMC for exceptional patient care and customer service provided as a result of its Culture of Care.  

NEWS CONTACT:   Tom Quatroche: 716-898-5503 or tquatroc@ecmc.edu

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12/30/2009

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