[S]pringfield Hospital leaders say they need to identify $8 million to $10 million in “annualized financial improvement” to help stabilize the troubled institution’s finances.
In a letter issued this week to Gov. Phil Scott, the hospital’s board chairman said he’s also counting on help from the state and federal governments.
But Vermont officials say they’re still not getting enough detail from the hospital. Agency of Human Services Secretary Al Gobeille said he has requested a meeting with the board in the coming days to learn more.
“It’s a respectful letter but doesn’t have the level of detail we need to provide to the governor for him to understand their actual predicament and have confidence that their plan can be implemented,” Gobeille said.
Gobeille added that Springfield Hospital is facing an “existential crisis.” He said he has learned that the hospital broke a covenant with Berkshire Bank.
“They don’t have months of cash left,” Gobeille said. “They have weeks to continue to operate in the same way.”
Drastic measures will be necessary, Gobeille said, and just cutting expenses will not be enough.
While Springfield Hospital’s financial struggles are not new, media reports revealed in early December that the hospital wasn’t paying its bills. Chief Executive Officer Tim Ford resigned soon after, and Scott has tapped former Rutland Regional Medical Center CEO Tom Huebner to “monitor and assist” as Springfield’s board organizes a recovery plan.
The hospital’s plan was submitted to the governor on Wednesday after Scott requested an update on Springfield’s financial position and the steps the board was taking to avoid the hospital shutting down.
That letter was requested, officials said, due to a lack of response from the hospital board. “We felt that it wasn’t moving fast enough, and we weren’t getting answers,” Gobeille said.
In his letter, Springfield Medical Care Systems Board Chair George Lamb said the board has identified “a long list of potential actions” and a plan that “aggressively works to stabilize the situation at Springfield.” But he doesn’t explain the plan.
“Some of these financial improvement opportunities can start quickly. Others will take a bit longer, so that we can continue to assure the proper care of patients and fulfill our regional health care obligations,” Lamb wrote. “Careful financial analysis must be completed … to ensure we fully understand the implications of our decisions.”
Lamb’s letter says Springfield Hospital will seek assistance from state and federal resources, including a U.S. Department of Agriculture rural development loan. The hospital also “will need the assistance of our banking partner, Berkshire Bank,” Lamb wrote.
Huebner said he meets often with hospital board members. He said the board is looking at all options to stabilize the financial situation.
“They were responsive to what the governor is asking them to do,” Huebner said of Lamb’s letter.
He declined to share more detail about the plans in place and directed questions to the hospital board.
Lamb’s letter also reports that the board signed an agreement on Tuesday for “advisory, consulting and interim leadership services” with Quorum Health Resources.
Quorum, a company facing numerous financial and legal challenges of its own, has also been reviewing Springfield’s finances since December.
The day Quorum started working with the hospital, Springfield Hospital Chief Financial Officer Scott Whittemore resigned. Ford resigned about a week after that.
It’s unclear what led to their resignations and whether Quorum’s presence was part of that.
“It’s not customary or usual to quit,” Gobeille said.
Huebner also wasn’t sure what led to the administrative resignations. “I wasn’t there – wasn’t part of that process,” Huebner said.
Wayne Scholz, a Quorum employee, was named interim CFO of Springfield Hospital and began working Dec. 13. An interim CEO has not yet been hired, according to Lamb’s letter.
Meanwhile, Vermont officials say they’re monitoring the situation and seeking more answers.
While the Springfield board is working on its finances, the Vermont Association of Hospitals and Health Systems, the Health Department and Vermont Emergency Management are making plans for what would happen if the hospital closed.
“I’m hoping that never happens, but you have to hope for the best and plan for the worst,” Gobeille said.
Springfield Hospital is carrying about $14 million in debt and stopped paying bills to vendors about a year ago.
Some have questioned whether Springfield Hospital officials lied about their financial position in front of the Green Mountain Care Board during a presentation last year.
“There’s no way you go from (August) numbers that were presented to the Green Mountain Care Board to the numbers I saw in December,” Gobeille said. “Something doesn’t add up. What it is, I can’t say.”
Gobeille said holding the hospital accountable and conducting a forensic audit are future possibilities. For now, the governor’s priority is making sure the community has a medical facility and people have jobs, he said.
The hospital employs more than 750 people.
“We’re going to stay very close to this,” Gobeille said.
