CEO sees potential for MMH recovery

The main entrance to Gouverneur Hospital, 77 W. Barney St. Officials say St. Lawrence Health System’s acquisition of Massena Memorial Hospital is similar to a recent situation at Gouverneur Hospital. Christopher Lenney/Watertown Daily Times

MASSENA — Massena Memorial Hospital Chief Executive Officer David J. Bender says Massena Memorial Hospital’s financial state is reminiscent of a similar situation at Gouverneur Hospital, but on a larger scale, and St. Lawrence Health System has stepped in both times to offer assistance.

In December 2013, Gouverneur Hospital, then a newly created nonprofit organization, was authorized to purchase the assets of E.J. Noble Hospital and its affiliate, Kinney Nursing Home. Gouverneur Hospital operates under St. Lawrence Health System.

The reorganization of E.J. Noble was seen as a way to rescue what was a financially unstable institution with quality-of-care issues and turn it into a sustainable way of providing health care to the community. The deal required a complicated financing plan — including help from the state Department of Health and creditors — to dispose of E.J. Noble’s massive debt and operating losses.

Fast forward to July 2019. Massena Memorial received a $20 million grant from New York State’s Health Care Facility Transformation Fund. The grant was contingent on St. Lawrence Health System creating an entirely new nonprofit entity that would acquire Massena’s assets and operate the hospital as part of the St. Lawrence Health System.

The hospital’s Board of Managers, Massena Town Council and St. Lawrence Health System signed an agreement to convert Massena Memorial from a public to a private, nonprofit hospital that would be part of St. Lawrence Health System, along with Canton-Potsdam and Gouverneur hospitals.

A management agreement between Massena Memorial Hospital and St. Lawrence Health System had been approved by the state Department of Health in June, and allowed St. Lawrence Health System to take over the day-to-day management of Massena Memorial Hospital under the leadership of Mr. Bender, who was appointed as chief executive officer following the state’s approval of the agreement.

Speaking to the Monday Luncheon Club in Massena, Mr. Bender said it took “a good four to five years” to turn Gouverneur Hospital around, and he anticipates the story will be similar in Massena.

“In Gouverneur, we stopped major losses fairly quickly,” but there were still ongoing losses for a number of years, he said. “Last year we finally made a million dollar profit on $20 million of revenue. This year, we’ve already made a million in the first six months.”

Mr. Bender, who had also served as chief executive officer of Gouverneur Hospital, said Massena Memorial Hospital is about twice the size of Gouverneur “with about three times the financial problems” that they faced in Gouverneur.

“So it’s a much bigger problem. It also has a much better foundation and many more strengths,” he said.

He said there were “some painful cuts we had to make in Gouverneur.” Among them was the closure of the Kinney Nursing Home on May 7, 2014. The nursing home had 22 residents, all of whom were placed elsewhere.

“We had to close down the nursing home, which was a big, big deal in Gouverneur. We were talking about moving peoples’ mothers and grandmothers 45 minutes away so they couldn’t visit every day. It was a big issue. It was difficult,” Mr. Bender said.

In Massena Memorial Hospital’s case, he said the board of managers “went through an exhaustive search process and did a lot of things very, very well” in their search for an affiliate hospital.

“They talked to everybody that was in the realm of possibility. Only one group stepped forward and said, ‘We’ll do this and we’ll put our own dollars into it,’ and that is St. Lawrence Health System,” Mr. Bender said.

“St. Lawrence is really the only health system that was willing to step in and do this, especially with two things nobody else had to offer. One was a track record of turning around a hospital, taking a financial losing organization and making it profitable. The other thing is, St. Lawrence was the only one willing to offer up any capital. It’s a major contribution of what’s needed for this organization and this community. This facility has been on a pretty strict diet for a good long time,” he said.

A deal between Massena Memorial Hospital and St. Lawrence Health System was the only way the state would commit to providing the hospital with a $20 million grant, according to Mr. Bender.

“They’ve had enough of putting money into the operations and then it just disappears. That’s what we’ve seen for the last several years,” he said. “Without St. Lawrence, Massena doesn’t get the grant. Without the grant, the hospital will close. It’s really as simple as that.”

Johnson Newspapers 7.1

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