MNA report: Crippling debt to blame for NARH closure


Photo Gallery | MNA community meeting in North Adams

NORTH ADAMS -- A full-service hospital in North Adams is sustainable, but a series of bad investments based on "poor management" decisions led to the demise of North Adams Regional Hospital, the Massachusetts Nurses Association concluded in a report.

The report, released on Tuesday, explores the root causes of North Adams Regional Hospital's abrupt closure on March 28 and lays out a position that a full-service hospital is "viable" in Northern Berkshire County. The MNA's report blamed the hospital's crippling debt for its Chapter 7 bankruptcy, not insufficient returns on medical services.

"The history of North Adams Regional Hospital clearly indicates that the Northern Berkshires can sustain a hospital that offers the full spectrum of services which meets the needs of the community in a fiscally viable manner," the MNA's report concluded.

The report is part of an ongoing effort by the union, which represented more than 100 nurses at the former hospital, to restore as many services as possible to North Adams under the umbrella of Berkshire Medical Center.

BMC aims to set up a satellite emergency center at the facility by the middle of the month under an agreement with creditors of the former hospital. BMC has bid $4 million for the former hospital building and assets, but others also could bid on the property.

If the sale to BMC goes through as planned, it could own the former hospital as early as July. While BMC has said it would invest an additional $10 million in the facility, it has not said what sort of services the new facility would provide.

Meanwhile, independent experts will perform a state-funded study to see what medical services are sustainable in the long-term, Gov. Deval Patrick has said.

The MNA contends that, between 2007 and 2012, expenses related to patient services decreased, while revenues increased slightly. The study did not include numbers from 2013 and 2014, when hospital officials claimed revenues and patient volumes dropped precipitously.

"In recent years, and especially in recent months, declines in revenues have continued to accelerate," the hospital's board of trustees stated in a March open letter to the community. "Even reimbursements from private insurers have not kept pace with our costs. For whatever reason, patient volumes in virtually all parts of our operations have declined, making our financial position still more precarious."

The MNA report states that the between 2000 and 2012, the administration of Northern Berkshire Healthcare, parent of NARH, incurred millions in debt. The study points specifically to the 1999 purchase of the Sweet Brook Transitional Care and Living Centers and the Sweetwood Continuing Care Retirement Community in Williamstown for a combined $25 million as investments that turned sour. (The Eagle has reported that the purchase price was a combined $19 million.) Northern Berkshire Healthcare sold the businesses for $7 million in 2010.

"If you pull one event out of the picture, then it's clear that the hospital would still be operational," said Mike Fadel, campaign director for MNA, during a meeting of former hospital employees at the North Adams American Legion Tuesday afternoon. "Had they not made this external investment (in the purchase of Sweet Wood and Sweet Brook), all the numbers show that the hospital would still be operating and we wouldn't be sitting here talking about its demise."

In response to mounting debt, the report argues, the hospital cut staff and ended services that were otherwise sustainable.

Reimbursements for patient services, while not ideal, were better than many other community hospitals, according to the report.

"NARH is less reliant on lower-reimbursing federal payers than most community hospitals, has a higher proportion of insured patients, and those health insurers are paying NARH more than they pay other hospitals," the report states.


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