Massachusetts Hospital Association challenges MNA's report on NARH
NORTH ADAMS -- A hospital trade group has challenged a Massachusetts Nurses Association report's conclusion about the recent closure of North Adams Regional Hospital.
"The basic claims being made by the MNA about NARH's finances are not borne out by publicly available documents," according to a statement released by the Massachusetts Hospital Association.
The report by the MNA, a union representing more than 100 NARH nurses, blamed the hospital's demise on "poor management decisions" that led to capital investments which caused a level of debt that was unsustainable. Without such debt, the report asserted, the hospital had enough patient volume to be profitable.
The report was widely circulated in the media and presented during a public forum at the American Legion in North Adams on Tuesday as evidence that the community could again support a full-service hospital.
But the hospital association statement maintains that figures used by the MNA are not a "recognized measure of hospital operating performance," and that in the first quarter of 2014, NARH experienced an operating loss "of more than $1 million."
Union officials stand by their report, according to MNA spokesman David Schildmeier.
"Our report is very clear, and they misread it, obviously," he said. "We used the hospital's own financials. And they (the hospital association) did not take issue with our main point -- that the heavy debt burden caused the closing."
The union report contends that between 2007 and 2012, expenses related to patient services decreased, while revenues increased slightly. It also contends that NARH made millions in the past 12 years, but its heavy debt burden erased those profits. The union report did not include numbers from 2013 and 2014, when hospital officials claimed revenues and patient volumes dropped precipitously.
"Contrary to the union's claims, the state's own hospital profile report clearly shows that there were many years during which the hospital did not earn a surplus during the period covered in the MNA report," the hospital association statement says.
Hospital association figures reflect a 24 percent occupancy rate at NARH, compared with a 61 percent occupancy rate at similarly sized hospitals. It also shows that NARH patient volume has decreased by more than 17 percent since 2008.
"Under any measure of review, such a hospital is in a dire situation," the hospital association statement said.
Stephen Sheppard, an economist and professor at Williams College, said there is probably some truth in both claims -- that the debt burden did significantly contribute the insolvency of the company, but some of the debt burden was incurred to expand the hospital in a market that couldn't support that many hospital beds.
"The hospital was too big and needed to shed some of its debt, some of its space and some of its staff," Sheppard said. "Yes, there was too much debt burden, but the hospital was also probably not sustainable at that scale."
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