What's Next For Bankrupt Northern Berkshire Healthcare

Mar 26, 2014

North Adams Regional Hospital will close March 28.
Credit Lucas Willard / WAMC

Northern Berkshire Healthcare has announced it will close North Adams Regional Hospital. The Board of Trustees cites a worsening financial status following Chapter 11 bankruptcy in 2011, financial restructuring and the closing of its psychiatric facility in January. The focus is now shifting toward the impacts and next steps.

Effective Friday, North Adams’ largest employer will lay off approximately 530 full- and part-time employees.  The VNA and Hospice of Northern Berkshire and three medical practices owned by NBH also will cease operations. State Senator Ben Downing of Pittsfield says he is working with Governor Deval Patrick, state and local officials, as well as hospital administration to come up with an alternative to closing at the date set. The Democrat says regulatory measures, a financial aid package as well as a potential sale or merger have been discussed in the past few weeks.

“We could have come together as a community to address this instead of taking the rapid step of moving toward closure,” Downing said. “I just can’t think that this is the only solution.”

Northern Berkshire Family Medicine, Northern Berkshire OB/GYN and Northern Berkshire General Surgery are also closing. Democratic state representative Gailanne Cariddi of North Adams says NBH was open about its financial struggles in the fall before closing its psychiatric and pediatric services.

“The hospital gave us notice in all of those meetings that we had last fall when the Department of Public Health was here,” Cariddi said. “I think they were pretty plain in talking about their difficulties.”

In a letter to employees, NBH Board of Trustees say the healthcare group will file Chapter 7 bankruptcy, meaning it will cease operations and close. Its assets and facilities will be owned and controlled by the bankruptcy firm. The state’s Executive Office of Labor and Workforce Development is sending a rapid response team to North Adams to assist employees with unemployment and health insurance over the next week. The letter says healthcare coverage will end March 31, but pension plans will not be affected. Williams College economist Stephen Sheppard did a quick analysis of the economic impact of the closings based on a model of the local economy. He says the region will see a yearly reduction of nearly $100 million in economic output and lose some 230 jobs on top of the more than 500 directly employed by NBH.

“In order to have a viable local economy you need to make sure that healthcare options are provided,” said Sheppard.

NBH serves roughly 40,000 people in northern Berkshire County, southern Vermont and bordering New York. NBH is working with ambulance services to secure access to emergency care at Berkshire Medical Center 22 miles away in Pittsfield and Southwestern Vermont Medical Center 18 miles north in Bennington. Sheppard says an ongoing study he’s conducting shows the mortality rate for medical conditions requiring critical care is directly related to the distance between healthcare facilities. NBH is also working to transfer non-emergency patients to regional providers. A spokesman for Porchlight VNA/Home Care, which is based in Lee and will soon incorporate an existing practice in Chicopee, says the company is already accepting new patients and staff applications in North County.

North Adams Mayor Richard Alcombright called the decision a shock, but not a surprise. In dealing with NBH President and CEO Tim Jones, Alcombright says he believes Jones has done everything he could to make things work and so have the employees.

“I’m hoping beyond hope that we can pull a rabbit out of hat here and if we can’t then we have to really put the pedal to the metal and figure out where we go from here,” said Alcombright.

NBH has posted consistent annual losses since 2009 and underwent financial restructuring after filing Chapter 11 bankruptcy in 2011. Senator Downing says he will do everything in his power to make sure North County has a healthcare facility.

“Yes there have been mistakes made in the past, but that’s not what this is about,” Downing said. “This is about addressing this immediate concern.”

Governor Patrick could not be reached in time for broadcast, but his office did release this statement to WAMC News.

“Well obviously it’s something that I’m very concerned about,” the Governor said in the statement. “We've been working through DPH and the Secretary [of Health and Human Services] all weekend to try to find a solution. We thought we had one right up until the point that the board of the hospital made the decision they made here. I know they have some serious debt issues that go back – I think I’m right – to the last bankruptcy that never really got worked out. Of course it leaves a hole in the service network for a very important part of the Commonwealth. I will say, I don’t think this is over, and for the 500-plus people who work at the hospital obviously it’s incredibly disruptive and worrisome and we’re getting a rapid response team from Labor and Workforce Development out there to help making their landing as soft as possible. For the people who are served by the hospital, I know that there are plans in place to triage their care and make sure that their covered. What we need is a viable facility in North Adams.”

The state’s largest healthcare union, which represents nearly 200 workers at the hospital, and the Massachusetts Nurses Association have called the decision unacceptable. Insisting it is not the end, MNA will hold a community meeting from 5 to 7 p.m. today at the North Adams American Legion. A Facebook page aimed at saving the hospital already has more than 3,800 followers. Hillcrest Dental Care says its North Adams office is open and is not affected by the closings. North Adams Regional Hospital opened in 1885.