[A]fter realizing just how dire the state of Springfield Hospital’s finances were, the state loaned the hospital $800,000 on Tuesday to keep it from closing.
Agency of Human Services Secretary Al Gobeille said the hospital would have closed this week without the loan.
“We knew how bad it was. We didn’t know it was that imminent,” Gobeille said. “It was worse than we had thought.”
The hospital needs to find at least $6.5 million in savings by April 1 to stabilize the finances, according to a letter Gobeille sent Springfield Hospital’s interim CEO Mike Halstead on January 28.
“Every four weeks we can’t keep advancing more money,” Gobeille said in a phone interview Thursday.
The money serves as an advance against future Medicaid payments and is being used to pay for salaries and operating expenses. Under the terms of the agreement, the funds are to be paid back by June 30, 2020.
The hospital is required to provide an income statement and other financial reports to the Agency of Human Services each month. The hospital also needs to notify the AHS of any changes in key staff.
Gobeille said he and Gov. Phil Scott met with Springfield Hospital leaders on Jan. 24.
“That’s when we learned what the timing was if they didn’t intervene,” Gobeille said.
Tom Huebner, who was appointed by the governor to help address the hospital’s financial situation, said “difficult steps” were being taken at the hospital. He declined to say what those steps were.
“We are working hard to preserve services to the community,” Huebner said.
Halstead, the hospital’s CEO, declined to comment on any changes until informing staff.
Halstead sent a internal memo to department managers Jan. 23 explaining a plan was being put in place to save money.
“We’ll try to be empathetic as we honor those staff that will no longer be here and will develop an outgoing service,” Halstead wrote.
The hospital employs about 450 people.
There could also be cuts to services Springfield Hospital currently offers, according to Halstead’s memo. The hospital is also considering an affiliation with Dartmouth-Hitchcock Medical Center, according to Gobeille.
A forensic audit and standard audit are now being conducted, Gobeille said. He expects the the audits will be complete next week.
“The forensic audit will provide a lot of clarity as to exactly what happened here,” Gobeille said.
Gobeille stressed the hospital need to take action immediately.
“They’re going to have a develop a plan and take steps over the next few days or week to begin to restructure the hospital,” he said.