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Exempt the hospitals New public authorities law is needed, but avoid an unintended consequence

This page long has supported the goal of reforming the state's public authorities, and that goal is now within reach. The Legislature has passed a bill that now only needs Gov. David A. Paterson's signature. If approved, authorities would come under greater public scrutiny and would be more accountable to the public. By and large, it's a strong and necessary bill.

But there is a problem.

Six hospitals in the state -- two of them in Buffalo -- operate as public authorities, and the bill as it now exists would wreck their ability to function in an efficient, businesslike manner. It would be disastrous for Roswell Park Cancer Institute, Erie County Medical Center and, more broadly, for Western New Yorkers' hopes for developing a thriving health-based economy.

The problem is that what is good for an authority that builds and operates highways or dormitories or public transportation systems is not necessarily good for hospitals, which operate in a more competitive environment. Among the concerns of hospital officials are that the bill would:

* Limit the ability of authorities to create subsidiary corporations. Part of the purpose of making public authorities of these hospitals was to allow them to collaborate with private groups, such as physicians. Without that flexibility, our hospitals will be undermined, especially as they compete against hospitals without that requirement.

* Subject the selection of a chief executive to review by the State Senate. That would inevitably complicate, delay and politicize the job of hiring leaders.

* Require the state comptroller to approve contracts for equipment and services at or above $1 million. That would also create unhelpful delays in business dealings.

Clearly, these kinds of restrictions would be useful for traditional public authorities such as the New York State Thruway Authority or the New York Power Authority. Just as clearly, though, they would hamstring hospitals.

The threat posed by this bill could hardly have come at a worse time in Western New York, where the state is pushing hospitals to operate more efficiently. The ensuing creation of Great Lakes Health, an umbrella organization that includes ECMC and Kaleida Health, occurred only after torturous negotiations that were always on the brink of collapse. Now that the new corporation has come into existence, putting Western New York on the cusp of creating an exciting new health care economy, the state must be sure not to sabotage the very work it had demanded.

Hospitals in New York are more than adequately monitored and supervised by the State Health Department. Many of the other requirements of the authorities reform legislation already apply to hospitals. For the most part, in this case the law would be either redundant or counterproductive.

Paterson should not sign this measure until these problems are negotiated out of it. Those changes are important, necessary and not hard to achieve. Lawmakers and the governor should work closely to save our hospitals even as they bring the state's sometimes reckless authorities to heel.

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