Lebanon
The health system posted a surplus of $9.8 million for the third quarter of its fiscal year, a sign of profitability after laying off 84 employees last year.
“These results are tracking well with year-to-date expectations,” according to the unaudited May 12 filing, signed by D-H Chief Financial Officer Daniel Jantzen.
The filing attributes a $10.1 million surplus — before restructuring costs — to growth in patient services, including surgical cases, inpatient discharges and patient appointments, as well as efforts to control costs.
With $17.7 million in restructuring costs included, D-H is in the red for the year.
Including severance payments related to last year’s layoffs and accounting adjustments related to D-H phasing out a traditional pension plan, the health system was $7.5 million behind for the nine months ending March 31.
The hospital system, however, aims to break even or better by the end of the fiscal year on June 30, D-H spokesman Rick Adams said on Monday.
“We’re on track to meet that goal,” Adams said. “We’re really encouraged by these results.”
At least one analyst monitoring D-H’s financial health was encouraged by the recent filing.
“Everything that we’ve been shown is again consistent with expectations,” said Margaret Johnson, a New York-based analyst with Fitch Ratings, a company that assesses the financial health of bond issuers.
Following D-H’s deficit of $12.2 million last year, Fitch Ratings downgraded bonds issued by the New Hampshire Health and Education Facilities Authority on behalf of the Dartmouth-Hitchcock Obligated Group from “A+” to “A” and placed them on a negative watch, Johnson said on Monday.
Altogether, the D-H Obligated Group, which in addition to D-H includes Cheshire Medical Center, New London Hospital and Mt. Ascutney Hospital and Health Center, posted a $39 million operating loss last year.
As of July 1, 2016, the group began pooling their bond repayment obligations. The group ended the third quarter on March 31 with a surplus of $9.2 million.
Alice Peck Day Memorial Hospital, which also is a D-H affiliate, is not a participant in the bond repayment group.
Fitch removed the negative watch for the D-H group last fall after the hospital system created a performance improvement plan, which included layoffs, a halt to non-essential hiring and a slowing of discretionary spending, Johnson said.
All was not completely rosy in this filing.
Cheshire Medical Center, in Keene, and New London Hospital showed deficits for the nine months ending March 31 of $1.4 million and $1.9 million, respectively. Cheshire showed a slight surplus in this most recent quarter of $117,000, but New London lost $1 million in this most recent quarter.
Cheshire’s deficit is attributable to the recent addition of several clinical programs, including a progressive care unit, and an expansion of the intensive care unit, said Adams. The additions required hiring new staff, including an anesthesiologist and nurses.
Due to difficulties in recruiting, Adams said, some of these positions have been filled through costly traveling doctors and nurses. By reducing the reliance on traveling providers, Cheshire expects to reduce salary costs in the coming year, Adams said.
The deficit at New London Hospital is due to a drop in patient service demand across several departments, including radiology, laboratory, emergency room and the physician practice, Adams said. The drop in patient services at the physician practice was caused by having three open positions for primary care doctors, he said.
Those positions have been filled and new providers are expected to begin work in the next fiscal year, Adams said.
New London Hospital lost about $425,000 due to the closing of the William P. Clough Extended Care Center, Adams said.
Including those losses and the restructuring costs, the obligated group saw a deficit of $9.9 million for the first nine months of the current fiscal year.
In other news at D-H, a search committee has selected two finalists for the chief executive officer and president post that Dr. James Weinstein will vacate at the end of June, the search committee’s co-chairs, Bill Conaty and Anne-Lee Verville, announced in an internal email — provided to the Valley News by Adams — earlier this month.
The search committee will make its choice and take it to the full board of trustees for a vote in late June, following additional interviews and visits to D-H, Conaty and Verville said. The committee members said they anticipated making an announcement following the June 22-23 board meeting.
Nora Doyle-Burr can be reached at ndoyleburr@vnews.com or 603-727-3213.
