Big changes approved at Massena Memorial Hospital

Updated: Jun. 28, 2019 at 8:15 AM EDT
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MASSENA, N.Y. (WWNY) - There are major changes at troubled Massena Memorial Hospital

There’s a new CEO and a new health system managing the hospital.

David Bender led Gouverneur Hospital's return to profitability. Now he has the chance to do the same for Massena Memorial.

He's been named its new CEO.

"The immediate job is going to be to develop the turnaround plan to put the hospital back on a track that's financially sustainable," he said.

He works for St. Lawrence Health System. The state has approved a deal to have St. Lawrence Health System manage Massena Memorial Hospital.

The hospital board also approved that deal Thursday.

"The new hospital board of managers that we have here had really persevered and done their due diligence to finally get what we need here," Massena town supervisor Steve O'Shaughnessy said.

The town currently owns the hospital. Officials are working toward transforming it into a private, nonprofit entity.

Bender is the fifth CEO to take the hospital's helm in the past year. The hospital is in dire financial straights. It has millions of dollars in unpaid bills and millions in pension debt.

"We just need to make some fairly dramatic changes to get it back into better condition," he said.

As significant as these changes are, they anticipate an even bigger deal. That's St. Lawrence Health System's eventual acquisition of Massena Memorial Hospital.

First, the hospital will submit a turnaround plan within 30 days for state approval. And more state approvals will be needed. But Thursday's action is heralded as a first step.

"This is a major step toward the acquisition," O'Shaughnessy said, "the fact that we're going to have Canton-Potsdam with its proven track record manage our hospital."

Patrick Facteau has been filling in as CEO since March. He will now return to doing his job as hospital chief financial officer full time.

The following is a news release from Massena Memorial:

The New York State Department of Health has approved an agreement allowing St. Lawrence Health System to be the manager of Massena Memorial Hospital, which is in dire financial straits. The management agreement, which is between MMH and St. Lawrence, has also been approved by the Town of Massena.

MMH, SLHS, the Town of Massena, and DOH said they all have “an interest in restructuring the management and delivery of healthcare at MMH, to improve its financial viability and to provide a high standard of care and services.”

Loretta Perez, Chair of the Massena Memorial Hospital Board of Managers, said: “We must do everything possible to ensure that we continue to have quality, affordable, available health care services for the people of Massena and our region. The hospital’s financial position has continued to deteriorate over the last several years and the Board is hopeful that this

partnership will begin to right the financial ship as we continue to focus on the well being of people in our community.”

Massena Town Supervisor Steve O'Shaughnessy said: “We have a collective responsibility to ensure that the people served by our municipal hospital continue to have access to quality health care. And as town leaders, we have responsibility to ensure that MMH remains financially viable. I look forward to working with the hospital board and with our new partners at SLHS to ensure continued quality health care for everyone in the region.”

St. Lawrence Health System CEO David Acker said: “SLHS is excited to be working with the good people at Massena Memorial Hospital to ensure that quality emergency, medical and health care services continue to be available for the people in and around Massena. We will continue working in partnership with MMH and DOH to develop a turnaround plan focused on the ability to provide those health care services in a way that is financially viable for the community.”

Under the agreement, SLHS must present the turnaround plan to MMH and DOH within a month.

St. Lawrence Health System previously conducted an assessment of Massena Memorial Hospital’s finances and operations. The assessment found:

· A review of hospital performance since 2011 distinctly portrays a hospital suffering from the consequences of a declining local economy. Net patient service revenues are for the most part flat, yet expenses continue to grow.

· Like most other rural hospitals across the country, Massena Memorial has seen a sharp decline in utilization, including a 50.4 percent decline in average daily census from 2008 through 2018.

· In conjunction with this decline of core service utilization, a corresponding degradation of financial performance occurred. Net patient service revenues failed to grow materially while expenses rose, resulting in significant and unsustainable operating losses.

· The scale and effect of these ongoing operating losses have been masked to some degree by non-recurring other operating revenue infusions in three of the last five years. From 2014 through 2016 MMH received in excess of $13.2M from NYS in distressed hospital funding.

· MMH has $7 million in accounts payable, in addition to being millions of dollars behind in payments to the New York State and Local Retirement System.

· Actions taken to date include an application to obtain Critical Access Hospital (CAH) status from the New York State Department of Health – a move that could mean a net revenue gain of $2.6 million annually.

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