Northern Berkshire Healthcare Emerges From Bankruptcy
 Chief Financial Officer Christopher Hickey said the health-care system has to 'regain the trust of the community.' |
The health care system entered bankruptcy last June after failing to come to terms with its bondholders. It also saw a significant reorganization of its administration, including the ouster of its then president and CEO, and a consolidation of its subsidiaries.
"It's a welcome climax to a period that the whole organization has been going through, not just during the bankruptcy period but for the whole time before that with the financial difficulties we've had," said NBH President William Frado Jr. on Tuesday at a press briefing at North Adams Regional Hospital. "This is a great relief to everybody in the organization and greatly helps our ability to operate at a reasonable level."
Chairman of the Trustees Dr. Arthur Turton, speaking via Skype, expressed the relief and gratitude of the board, saying, "the entire community is going to be better off for the fact that our hospital is now in a good financial position."
As part of the bankruptcy proceedings, the hospital was able to lower its annual payments to $2.25 million per year, down from $6.4 million, on debt of $43.7 million. Health system officials had been negotiating with its bondholders since 2010 but were unable to make headway until declaring bankruptcy.
Most of the bonds are held by Nuveen Investments Inc., which resisted restructuring the debt, said Frado, over concerns of setting precedent for other community hospital bonds it may hold.
Chief Financial Officer Christopher Hickey said the tipping point was last fall after both the health care system and Nuveen had looked at a number of financial models that showed "it was unlikely that this organization would continue to make its obligations."
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Looking ahead:Both the VNA building on Curran Highway and the thrift shop on Cole Avenue are for sale. Another off-campus facility, Northern Berkshire Family Practice, will continue operation on State Road.
During the bankruptcy proceedings, North Adams Regional Hospital has scored high marks in patient satisfaction and quality indicators.
"The outstanding part has been the great work of our staff," Frado said. "That despite all the anxiety and turmoil that's been created by the bankruptcy proceeding, they have just kept their heads down and worked very hard to deliver high-quality care to our patients."
Looking forward, hospital officials want to continue a profitable trend that's been seen over the past few months. Turton said his board will now be able to concentrate on long-term planning, including talks of affiliating with Berkshire Health Systems that had to be put on the back burner.
The main strategies, officials said, will be maintaining and increasing patient volume, initiating efficiencies across the board and marketing.
Staffing is the largest part of the operating budget and matching staffing hours with patient volume is critical. The hospital is the city's largest employer with 575 employees and a payroll of about $34 million.
"We've got to begin to change some of the culture around here, get people to work together more effectively as a team," said Frado. The bankruptcy "was a tremendous drain not only our pocketbook but on the time that our people had to spend ... The finance department was almost totally consumed with preparing information and analysis for the lawyers and the financial advisers.
.jpg) Turton, speaking via Skype, said the entire community will benefit from the hospital's emergence from bankruptcy. |
Regaining the trust of the community will be essential, said Hickey.
"We learned a lot during the bankruptcy process," said Turton. "And we're going to continue to use those principles that we applied and that have obviously been successful during the past two or three months to maintain the institution."
He credited Frado with fulfilling the trustees' charge in addressing employee morale as well as finances.
Frado, a retired senior vice president of Harvard Pilgrim Health Care and trustee who stepped in at a critical juncture, said a search committee has already identified a possible successor who will be named later this summer.
"This has been the most enjoyable job I've ever had," said Frado. "I've gotten more satisfaction and gratification out of working with the people in this hospital than any place I've ever been."
Tags: bankruptcy, NARH, Northern Berkshire Healthcare,
