E.J. Noble Hospital's troubles have finally sunk the hospital.
In press releases Tuesday night, Canton-Potsdam Hospital, which has overseen E.J. Noble for several months, and E.J. Noble's board of directors, announced E.J. Noble will file for "judicial dissolution," and sell most of its assets to a newly created "Gouverneur Hospital."
Gouverneur Hospital will operate under a new corporation called St. Lawrence Health System, which will be the parent of both Gouverneur Hospital and Canton-Potsdam Hospital.
The statements Tuesday night left many questions unanswered, including:
- what will become of the current employees of E.J. Noble Hospital?
- what will happen to whatever contracts and agreements E.J. Noble now has?
- what services the new hospital will provide?
- what, exactly, changes by getting rid of E.J. Noble and replacing it with a newly named hospital?
- what kind of corporation is St. Lawrence Health System?
In the press releases Tuesday night, the decision to eliminate E.J. Noble was framed as inevitable and essential, for some kind of hospital-based health care to continue in the Gouverneur area.
"In just the first seven months of 2013, EJN (E.J. Noble) has lost $3.2 million. EJN Hospital has received NYSDOH (state Department of Health) support since March, 2013, but that support will end in December," Michael Burgess, Chair of the EJN board of directors, is quoted as saying in the press release.
"EJN Hospital simply doesn't have the resources to continue to operate thereafter. The conclusion is that this hospital is unsustainable in its current form.
"This step avoids a debilitating bankruptcy and provides a clean slate on which to build a new, sustainable organization.
"It is anticipated that the majority of services now available will be offered by the new Gouverneur Hospital."
According to the press releases, the state Department of Health is now reviewing the plan to dissolve and sell E.J. Noble's assets.
Health care reform is mentioned as one reason for E.J. Noble's troubles, though the press releases acknowledge E.J. Noble has struggled financially for years.
Almost exactly one year ago, E.J. Noble's troubles began to multiply when the state health department shut down the hospital's laboratory, essentially forcing the facility to close. It has since reopened, but only partially, and many workers remain off the job.
The full text of both press releases issued Tuesday night
Potsdam, NY-Canton-Potsdam Hospital announced today plans to create a two-hospital system which would serve both the Gouverneur and Canton-Potsdam communities. Among the primary goals of the plan is the creation of a new hospital entity to serve the needs of the Gouverneur region. This hospital entity, to be named Gouverneur Hospital, would provide high-quality, financially sustainable healthcare services to the Gouverneur area over the long term. Under the plan, a new parent corporation, St. Lawrence Health System (SLHS), will oversee the two-hospital system.
E. J. Noble Hospital, which has experienced significant financial difficulties for decades, is expected to shortly file a petition for a judicial dissolution, which would entail the sale of substantially all of its assets to the Gouverneur Hospital. The plan is now under review by the New York State Department of Health.
"Nationally, small hospitals are struggling financially in the face of sweeping healthcare reforms and changes to reimbursement models," said Margaret E. Madden, Chair of CPH's board of directors.
"The North Country's hospitals have been strongly affected by these changes," she said, "and E. J. Noble Hospital is among those most hard hit. This plan proactively and sustainably contends with forces that threaten the survival of vulnerable rural hospitals," added Madden.
Michael Burgess, chair of the EJN Hospital board of directors, agreed saying, "We looked at every option. Sale and dissolution, in conjunction with formation of the new Gouverneur Hospital, is the most appropriate step to ensure there will be a hospital serving our community for the long term," he said.
Burgess praised the NYSDOH, noting that the State has provided support since March, but also noting that support will end in December. "EJN Hospital simply does not have the resources to continue to operate thereafter," he said.
"It is anticipated that the majority of services now available will be offered by the new Gouverneur Hospital," said Burgess. "With assistance from CPH, we made significant strides toward building the foundation for quality, which is a pre-requisite for the operation of healthcare services." He cited the expansion of laboratory testing performed in-house, the achievement of critical access designation allowing for higher Medicare reimbursements, recruitment of new practitioners, establishment of a primary care center to be operated by the Community Health Center of the North Country (a federally qualified health center), reopening of the operating room, and improvement in quality, safety, and the patient experience.
Under the plan proposed to the State, the new parent SLHS will have CPH and Gouverneur Hospital as affiliate organizations. Each hospital will have its own board of directors with representation on the SLHS board.
"The sea-changes occurring in hospitals around the country require successful organizations to create new corporate structures," said Madden. "SLHS will create a larger, stronger, collective entity to better position us to meet the challenges of the rapidly evolving healthcare environment," she said. "Ultimately, all of our communities will be better served."
Gouverneur, NY - E. J. Noble Hospital announced today that its board of directors has approved a plan that would allow for the continuation of healthcare services to the Gouverneur community. The plan would create a new organization, Gouverneur Hospital.
Creation of the new hospital would occur through an establishment certificate of need application currently before the New York State Department of Health (NYSDOH). The certificate of need would establish Gouverneur Hospital and St. Lawrence Health System (SLHS), a parent corporation that will also oversee Canton-Potsdam Hospital. Under the plan, E. J. Noble Hospital will shortly file a petition for judicial dissolution and sale of substantially all of its assets to the Gouverneur Hospital.
"The formation of the Gouverneur Hospital will provide high-quality, financially sustainable healthcare to the people of Gouverneur over the long term," said Michael Burgess, Chair of the EJN board of directors.
"Hospitals all over the country have experienced significant financial losses, with rural hospitals being especially hard hit," said Burgess. "Couple this with wholesale changes to our healthcare system, and you have hospitals that are in very vulnerable positions," he said. "As a result, many small hospitals are struggling to stay viable, and consolidation is what we're seeing," he added.
Mr. Burgess noted that EJN Hospital has experienced decades of financial difficulties. In 2012, the hospital lost $4.5 million.
"In just the first seven months of 2013, EJN has lost $3.2 million. EJN Hospital has received NYSDOH support since March, 2013, but that support will end in December," he noted. "EJN Hospital simply doesn't have the resources to continue to operate thereafter. The conclusion is that this hospital is unsustainable in its current form," said Burgess. "It's high time for a new beginning."
The decision to seek a judicial dissolution came following an exhaustive analysis by the EJN Board, with the assistance of a global turnaround and restructuring firm, which concluded that a sale and dissolution would be best for EJN and the Gouverneur community.
"This step avoids a debilitating bankruptcy and provides a clean slate on which to build a new, sustainable organization," said Burgess.
"The new Gouverneur Hospital will be well-positioned to build on what we've started," he said. "EJN Hospital achieved many milestones with assistance from the State and from CPH," said Burgess. He cited the expansion of laboratory testing performed in-house, the achievement of critical access designation allowing for higher Medicare reimbursements, recruitment of new practitioners, establishment of a primary care center to be operated by the Community Health Center of the North Country, reopening of the operating room, and improvement in quality, safety, and the patient experience as just a few examples.
"We know that healthcare can be sustained only with commitment to the highest quality standards; that's why we put so much effort into achieving these milestones," said Burgess.
Burgess praised the work of staff over the previous months. "These achievements wouldn't have occurred without the hard work of our employees, and I know the entire Gouverneur community is grateful," Burgess said.
"I'm confident that a new organization will create financial stability, provide strong local primary care access, and lend the support needed to deliver high quality and an improved patient experience," said Burgess. "This new beginning also builds on the Gouverneur community's reputation for resilience and innovation," he said. "It's a reason for great optimism about the future of healthcare in Gouverneur."