"Real liberty is neither found in despotism or the extremes of democracy, but in moderate governments.
Alexander Hamilton

Saturday, April 2, 2016

LRGH Announces Layoffs, Interim CEO

Health care reimbursement has become a very complex and costly proposition for hospitals and providers. With the recent layoffs at LRGH in Laconia and Franklin, some have seen this as an opportunity to blame it all on Obamacare, mostly for political gain. Case in point is NH Congressman Tony Guinta who is running for re-election. There is always a cause and effect for most things in life, and in this instance and in my opinion,  LRGH leadership did not steer the ship in the right direction. It is bit personal for me in that I know and worked with some of the individuals that were let go. Michael Kitch has a good article in today's Laconia Daily Sun with another perspective on this topic, based upon facts and not politics.
Aside from the points made in the LDS article, changing leadership at LRGH and incorrect assumptions on where health care was going, led to a business model that in today's reality was not viable. They have seen four CEO's in the past two years with the recent announcement of an interim CEO and may see a fifth one when a search is completed. It is difficult to manage a business and make long term strategic plans with so much flux at the top of the ladder. Employees get mixed messages when the strategic direction changes every time a new leader steps in to right the ship. In addition, senior management also sees change as the new CEO wants to put people in positions that are on board with his or her way of thinking. Confusing and worrisome for front line employees. Morale drops, productivity drops and it leads to an environment of uncertainty. The layoffs have been rumored for months at LRGH, especially as a  company was brought in to find ways to cut costs and increase reimbursement. Is my job safe? Where will I find work? Impending doom is not a good motivator for a workforce. A new rumor is that another round of cuts would come in 30 days.
Presumably, the recommendations of the experts that LRGH hired were executed this past week. Among the many changes ( this is information by the way I received first hand from two LRGH employees) are that the the entire ICU nursing staff at Franklin was let go and that most of the outpatient services at Franklin would be relocated to Laconia. The Franklin emergency room would remain open, but it is unclear yet what will become of the remainder of the hospital which is a  25 bed critical access hospital. There is also very important unit at Franklin that opened a few years ago to house on an interim basis, patients that need inpatient mental health service and are awaiting bed placement. This unit helps alleviate the pressure on emergency rooms that have to hold these patients in the ER until a bed is available. No word on the future of that unit.
As more and more procedures and testing are done as outpatients,there is less and less need for inpatient care. Couple that with the use of a network of hospital that function as centers of excellence for things like cardiac issues and other specialties, the need for inpatient care further dwindles. Lastly, long gone are the days of " lets keep him another day." Today, the payors rule and patients are discharged to home or lower level of care based upon their criteria or the hospital doesn't get reimbursed.
I feel for the employees at LRGH who do a great job in fulfilling it's mission, and I am sure that despite all the changes, LRGH will continue to provide the same excellent care it always has. I also feel very strongly that the pressures on health care providers stem from a multitude of causes and simply yelling " Obamacare " will not address the root causes. Politics as usual is not the answer. It's the problem.



Until the public realizes that the demographic shift to older and less affluent clientele who utilize hospital services more frequently and at higher cost instead of listening to the pablum being fed by certain groups blaming Obamacare, nothing will change. Probably the ultimate solution is to have socialized medical system that removes the need to have hospitals and medical providers reviewing their operating margins, etc.

The changes at LRGH won't improve care at those facilities and will only exacerbate the problem. Until the public wakes up that medical care costs money and to pay for those in need taxes are necessary and probably need to be raised, we will be saddled with this problem.

I for one believe the solution is a single payor system financed by taxes, which means Medicare for all; removing the insurance companies and if you can't stomach the term "socialized medicine" find some ACRONYM like MEDCARFAL (Medical Care For All)

Anonymous said...

The situation is so much more complicated than politics. It's economic reality! Each side wasting time lobbing political hand grenades at each other. The hospital continues to hemorrhage money, too few patients go there for money-making procedures, so those specialties are done in Hanover , Concord , Manchester or Boston. NH healthcare delivery will be consolidated into a few regional hospitals, unfortunately jobs will move or be lost, money will be better spent, outcome measurement will improve. The system is experiencing a much needed overhaul, when the smoke clears things will be the same. Love to get politicized opinions from well-intended leaders... But who managed to lose a million bucks with the Moultonborough VNA...just google that little story and you'll discover what 'nice but unsustainable' means. How long can any operation lose a million dollars a day?

Moultonboro Blogger said...

Anon, I'm not clear on who is losing a $1m per day. Not LRGH nor the Town of Moultonboro. The VNA at the time of divestiture at the end of 2013 was one of only two remaining town owned visiting nurse services in NH. While the patient base was decreasing, regulations increasing and challenges in recruiting staff, it was deemed by the then BoS ( correctly I might add) to seek a partner who would provide the same high level of service, but retain some local control,Lakes Region Visiting Nurse Association.
While the Town did subsidize VNA for many years, it did provide a valuable service to our residents, but it reached a point where it just did not make economic sense.

Anonymous said...

I have heard LRGH losses have been staggering. Why?...when the vast majority of their patients cost considerably more to care for than Medicare and Medicaid reimburses them, while SG&A costs invariably climb higher, when you cannot support the few specialty services (cardiac cath,etc) then most every critical patient is transported to an institution that does. This is math, not personal. And that's where things get muddied, when socialism meets capitalism...it's a fragile alliance where one side won't survive without the other. With regard to the facts surrounding Moultonborough VNA, you might recall that the 'declining number of patients' served was down to two patients, which becomes challenging when the operation is paying a greater number of employees. Carter Terenzini, former Moultonborough TA, Indicated that the annual loss exceeded $250k before 'merging' the entity with Meredith. Key is understanding the difference between subsidizing an important community resource as opposed to subsidizing mismanagement. The point is that the community hospital is dealing with precisely the same challenges (reimbursement, regulatory, talent recruitment and retention, solvency) as the local VNA did and is headed toward the same fate.

Anonymous said...

Since posting has ceased, to be clear: Lakes Region is losing up to a million a day; according to TA Carter Terenzini Moultonborough VNA only lost $250,000 a year....it is extremely kind to call a census of two patients 'a decreasing census'... prefer calling it subsidized mismanagement rather than a valuable service.

Moultonboro Blogger said...

LRGH is not losing $1M per day. It i more like $1M per month. A huge difference. The VNA issue was addressed in a fair and deliberate manner by a previous administration. The final number of clients is irrelevant. The town chose year after year to support the VNA with their vote at town meeting.

Anonymous said...

Let's just say the dollars lost since 2011 in operating and non-operating losses have exceeded your number...pick your poison or your rumor. The problem stems from the Medicare/Medicaid/Charity/Bad debt business mix and that, on average, all states reimburse Medicaid for the cost of treating Medicaid patients while NH reimburses only 54%. With Medicare: all states get close to 100% reimbursement while New Hampshire averages 84%....the VNA situation happens when people simply don't know what they are dealing with...until its too late. PS. Prior to your participation, but certainly not a prior administration. Continued good luck.