A Gilford orthopedics clinic says it will close after 50 years because its contract with Lakes Region General Hospital isn’t being renewed as part of the likely takeover by Concord Hospital, one of the first visible changes spurred by the financial collapse of LRGHealthcare.
Advanced Orthopaedic Specialists said last week it would close by March 31 because Concord Hospital “chose not to renew the Provider Service Agreement that has been in place since 2004.”
Such agreements are common between hospitals and private group medical practices and can take many forms. They generally involve shared administrative costs and agreed-upon compensation for physicians.
Robert Steigmeyer, CEO of Concord Hospital, declined to discuss specifics of the contract other than to indicate it was deemed to be “economically non-sustainable.”
“Given everything else we’ve confronted,” Steigmeyer said, referring to the financial hit hospitals have taken from the pandemic, “where things sit today, we can’t assume contracts or commitments that are not viable.”
“We’re not going to duplicate or replicate things that contributed to the problem. We don’t want to repeat a bankruptcy,” he said.
If Concord Hospital’s takeover of LRGHealthcare is approved, which seems likely, Steigmeyer said it would operate on an “open-staff mode” where “any provider that’s qualified to be on the medical staff can continue to provide and deliver care.”
“We are committed to ensuring that orthopedic care is delivered in the Lakes Region,” he said.
LRGHealthcare, which also owns Franklin Hospital and some health care agencies, declared Chapter 11 bankruptcy last year due largely to the costs associated with some $128 million in debt fueled by an expansion of the Laconia hospital and creating a computerized system to deal with electronic medical records.
Concord Hospital offered to buy LRGH for $30 million and ended up the only bidder. The relationship between the two entities is close; Concord Hospital had talked about merging with or buying LRGH in the past, and in recent years took over its maternity services.
While some complications remain in the deal, especially several million dollars that the state says LRGH owes resulting from the “Medicaid loophole” of past years, it seems likely that the change of ownership will be approved by state regulators in order to keep the hospitals open.
The purchase will be the subject of an online public hearing by the Director of Charitable Trusts, who oversees health care charitable trusts. The hearing will be Tuesday, Feb. 23, from 4 to 6 p.m. The public may register for the hearing and may submit questions or comments in advance or during the online hearing. Supporting documents may be found on the website for the state’s Charitable Trusts Unit.
Advanced Orthpaedics says it was the “first medical professional corporation in the state of New Hampshire” when it opened in 1970 under a different name. It has 10 practitioners, including the four owners.
In a statement, the group said “the practice has been working on creating a path forward to continue providing orthopedic care in the area” but that “Concord Hospital did not provide a viable solution to allow AOS to continue.”
“Rumors that the surgeons of AOS ‘want to leave’ could not be further from the truth,” Dr. Jeremy Hogan, an orthopedic joint surgeon who has been with AOS for 19 years, said in the statement. “Our practice has amassed thousands of loyal patients in the Lakes Region. … It deeply saddens us to close AOS, and say good bye to our committed staff. We will all find a path forward with new organizations.”
Steigmyer said Tuesday that the three components of LRGH’s financial problems were debt load, IT costs, and “non-sustainable” contracts.
“It is not my impression .. that they have been overstaffed,” he said when asked about the possibility of layoffs to cut costs.
Like all hospitals, those in Laconia and Franklin have been hit financial by the COVID-19 pandemic, which has slashed in-patient revenue and made emergency departments less profitable.
(David Brooks can be reached at 369-3313 or dbrooks@cmonitor.com or on Twitter @GraniteGeek.)
