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Nurses Union: Full-Service Hospital Viable in N. Berkshire; Poor Management Led To NARH Closure

Lucas Willard

The Massachusetts Nurses Association has released a report stating a full-service hospital in Northern Berkshire County is financially feasible, after North Adams Regional Hospital closed March 28th

The MNA says its researchers reviewed IRS and bankruptcy filings by the hospital’s parent company Northern Berkshire Healthcare over the past decade. David Schildmeier is the union’s spokesman.

“It can sustain itself absent of bad decisions that were made on purely serving the health care needs of its community, this hospital is a viable entity," Schildmeier said. "It was in the past and could be going forward. That’s what the statistics bear out.”

The report finds that from 2000 to 2012, patient revenue grew by 78 percent, while expenses rose 29 percent.  The Nurses Association claims poor management decisions by Northern Berkshire Healthcare led to closure. The union cites the company’s 1999 acquisition of Sweet Brook Care Centers and Sweetwood retirement community in neighboring Williamstown as a primary example. Northern Berkshire Healthcare filed Chapter 7 bankruptcy April 3 and is now under the control of a court appointed trustee.

“Those types of ventures with the public’s money, remember these are taxpayer dollars that are invested in these institutions through Medicare, Medicaid and other sources, and then for hospitals and CEOs of these corporations to take that money and gamble with it, which they did in this case, and lost big time…the community is now suffering because of those bad decisions,” Schildmeier said.

NBH sold Sweetwood and Sweet Brook in 2010 for $7 million taking a financial loss of roughly $20 million. In June 2011, NBH filed Chapter 11 bankruptcy. Dr. Arthur Turton joined the Board of Trustees in 2005 and started a two-year term as chair in February 2011. Turton spoke with WAMC News days after the Chapter 11 filing, when the company listed $43 million in debt.

"Sweetwood and Sweet Brook were purchased at a time when the financial models showed that they could be quite profitable,” Turton said. “At that time of course hospital utilization was much higher than it is now so the hospital was also making more money. There was a substantial change in the real estate market. That made the model not sustainable, and it started losing money instead of making money."

In June 2012, NBH announced it had recovered from Chapter 11 bankruptcy protection. The company adjusted its annual debt payment to bondholders to $2.25 million from $6.4 million. Bill Frado Jr. joined the company’s board of trustees in 2010 and served as NBH interim president during the bankruptcy proceedings. He spoke with WAMC News in June 2012.

“Now that we’re out of the bankruptcy, we’re stabilized, we’re doing pretty well for the first part of this fiscal year, we’ve made some money, I think we can honestly say that healthcare is good here,” said Frado.

The MNA report does not include NBH finances for the past two years. Turton spoke with WAMC News in December 2013 before NBH closed the hospital’s psychiatric and pediatric units. At the time he said the company had 13 days cash on hand and claimed other services would suffer if the units were not shut down. Turton says when NBH filed for Chapter 11 protection it had 12 days cash on hand.

“It’s operating costs which continue to rise, as opposed to operating revenues which have continued to fall for various reasons; third party payers have reduced payments, utilization of all hospital facilities, not just ours but generally around the country, have dropped down since the 2008 downturn in the economy,” Turton said.

In a letter to the community following the hospital’s closure in March, the NBH Board of Trustees noted staff reductions and spending cuts could not keep up with accelerating declines in revenue and patient volume. Stating the company was stabilized and doing well in June 2012, Frado said NBH had been discussing a partnership with Berkshire Medical Center for a few years before the Chapter 11 filing.

Schildmeier says the MNA hopes to send the report to the consulting firm the state brought on to help Berkshire Medical Center and the surrounding community determine the region’s healthcare needs. BMC plans to open a satellite facility at the former North Adams Regional Hospital by mid-May. Calls to former NBH Board of Trustee members went unreturned.

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