If sale to Concord Hospital is rejected, Franklin and Laconia hospitals could close by summer

  • Lakes Region General Hospital finances chart UMass Medical School—Courtesy

  • hospital service areas UMass Medical School—Courtesy

  • Lakes Region General Hospital

Monitor staff
Published: 2/24/2021 3:40:18 PM

The two financially troubled hospitals in the Lakes Region would be renamed Concord Hospital-Laconia and Concord Hospital-Franklin if their sale goes through – and if it doesn’t, they’ll probably shut down before the summer.

Concord Hospital will operate the Franklin and Laconia hospitals for at least five years if they are allowed to buy them out of bankruptcy and “may maintain current levels of service, but with no guarantees,” said Katherine London of Commonwealth Medicine who analyzed the proposed sale for the State of New Hampshire.

She said during a public hearing Tuesday before the Charitable Trusts Unit of the New Hampshire Department of Justice that based on current practices, costs charged to both uninsured and insured patients would be “about the same” if the sale goes through, while the level of care “could improve” because Concord Hospital gets a higher rating on quality of care from the federal government than the two smaller hospitals.

Those were some of the details that came out Tuesday during an online hearing about Concord Hospital’s proposed purchase of the assets of Franklin Hospital and Lakes Region General Hospital. The hearing was held by the state director of Charitable Trusts, whose division oversees non-profits.

The sale has been approved by the federal bankruptcy court in Concord and needs regulatory approval from the state. Planning for the change is already underway and the final OK is likely by the end of March.

During the hearing Kevin Donovan, CEO of LRGHealthcare, the parent company for the Laconia and Franklin hospitals, was blunt in his comments about the debt-laden firm.

“If this is not approved, it is my estimation that LRGHealthcare will close its doors within in next 30 to 60 days … Our region will essentially be left without primary and secondary healthcare services,” he said.

Donovan said efforts starting in 2018 to find a buyer had shown that only Concord Hospital is interested, and then only because the Chapter 11 bankruptcy filing will unload most of LRGHealthcare’s $111 million debt load. Concord Hospital wants to buy the assets of LRGH for $30 million.

The three hospitals have long had close connections, including some overlap in their official service areas.

Questions raised by people watching the two-hour hearing mostly concerned details about effects of the sale.

Robert Steigmeyer, CEO of Concord Hospital, said that 10 psychiatric beds in Franklin Hospital would be maintained and the facility’s focus on mental health services would not be lessened.

Birthing rooms, which were closed down two years ago, will not return to Laconia even though maternity services will stay. The problem is a lack of births.

The last year the birthing rooms were open in Laconia, the hospital did 280 deliveries, compared to more than 500 in 2008-2009, said Donovan of LRGHealthcare.

“Every year we were losing 40 to 50 births,” Donovan said.

This not only affected income but made it difficult to hire obstetricians, he said, because they have to perform a certain number of deliveries each year to keep their board certification. “They didn’t want to go to low-volume practice.”

Steigmeyer said pensions of LRGHealthcare employees would be paid and there are “no plans envisioned at this moment about selling off real estate … but I will tell you, we have to be looking for efficiencies.”

Steigmeyer said that consolidating back-office functions such as billing and expanding Concord Hospital’s information technology to cover the Franklin and Laconia hospitals would result in significant savings.

“We are building out a management team for what is essentially a Central New Hampshire health care system … that will be led out of Concord, to support all of the facilities,” he said.

In her presentation, London underlined the financial problems at the Laconia hospital, which saw the number of patient discharges fall from more than 4,000 in 2015 to fewer than 3,500 in 2019, even as total expenses rose from $190 million to around $200 million.

Concord Hospital is much larger than the other two facilities. It had 242 staffed beds as of Feb. 11 while Lakes Regional General Hospital had 50 and Franklin Hospital had just 28.

(David Brooks can be reached at 369-3313 or dbrooks@cmonitor.com or on Twitter @GraniteGeek.)

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