About a week ago, HealthAlliance, which operates Kingston and Benedictine hospitals in Kingston, announced it was considering closing one of the two hospitals.

Pardon the community for a collective WTF! When it was launched four years ago, almost no one thought the merger would have turned out this badly this soon.

Since the merger took place in 2008, the combined operation has lost some $10 million. Accounts vary, but it would appear HealthAlliance employs about 1,600 full-time workers and about 600 part-timers. Combined, the two hospitals have about 300 beds.

The economic impact of even a small reduction in this workforce cannot be exaggerated. Despite glowing projections from hustling politicians, the job market in these parts still hovers between scarce and non-existent. The medical field has been one of the stable sectors.

In this case, defeat has several fathers. While cross-river competitors judge HealthAlliance management “behind the times,” the blame for all this red ink falls about equally among competition from other hospitals, more private-practice medical facilities and federal Medicare reimbursement rates. Federal reimbursement for similar procedures is substantially lower for hospitals in Ulster County than in Dutchess orWestchester, thus driving patients out of the county. Unfortunately for those who face pink slips in the near future, this is not news.

It’s hard to compete when a hospital 10 or 20 miles away charges thousands less for the same procedure. Buried within this fiscal fact of life lies an open secret. Justified or not, some locals would not go to a Kingston hospital to have a hangnail treated. That fact, probably anecdotal, undoubtedly unfair, is there.

Equalizing federal reimbursement rates in the Hudson Valley is as much a political issue as a medical one. For years, Congressman Maurice Hinchey has been crowing about his clout inWashington as a member (now senior member) of the House Appropriations Committee, a post he assumed in 1996. Hinchey has been fighting to adjust reimbursement rates since at least the turn of the century, but to no avail.

The safety margin in HealthAlliance’s business plan seems to have been dependent on Hinchey’s ability eventually to bring home this particular slab of bacon. This is not to blame the congressman for the present potentially disastrous outcome, only to suggest that our one-man congressional army could have used some backup. This, it would appear, is what is happening, however belatedly, with the call for support from U.S.senators Chuck Schumer and Kirsten Gillibrand. In hindsight, closer cooperation on this vital issue between Schumer and Hinchey — they’re really not that fond of each other — might have produced a different outcome. Why, it might be asked, didn’t they realize what was at stake sooner and exercise greater efforts?

Some harsh realities need to be faced.

It is apparent — perhaps likely — that the two-hospital model hasn’t worked, that a market of less than 100,000 souls (metropolitan Kingston and environs) cannot support such extensive facilities at a time when the hospital piece of the health pie is shrinking year by year.

There is growing rancor about the almost $60 million — including $47 million in special state aid for the merger and $10 million in red ink — gone under the bridge. Hand-wringing and finger-pointing won’t reclaim a dime. Reconfiguring the alliance will prove even more expensive and more difficult, divisive as that process was. Mother’s milk will be in short supply, as the state will be disinclined to bail out failure. Creating a bold new plan, and quickly, will be a challenge. One of the problems of our competitive elected officials working together in times of crisis is they really don’t like each other. I mean, really.

County Executive Mike Hein has declared the community needs to speak with “one voice,” which usually means his. If so, his clandestine decision-making process — re: the county infirmary — needs a major makeover if a positive collaborative result is to be achieved. It would seem that the professionals must take the lead here, and lay out the options in real time.

Bottom line? A hard-hit community is in for harder times. Leadership has to be held accountable.

And this just in: Recently released tax records show 17 HealthAlliance executives were paid an average of $270,000 in 2010, topped by the $630,000 paid CEO David Lundquist, and including some $530,000 owed by contract to former Benedictine CEO Tom Dee. That same year the operation they (not Dee) were running lost an estimated $2.8 million. Losses for last year topped $5 million.

And Mike Hein got gas for his $133,000-a-year salary?

The Kingston area hasn’t suffered this kind of sticker shock since it was revealed a few years ago that retired school teacher and district health benefits manager Hugh Spoljaric was making more than the superintendent. The former school union boss has since scaled back.