Renovations on Hold for Now at APD as Hospital Evaluates Its Role

Suzanne Lorenz, a Registered Nurse, sorts through paperwork at a nurses station in the Med. Surg. Unit, the newest wing at Alice Peck Day Memorial Hospital in Lebanon, N.H., that doubled the number of beds at the hospital.
Valley News - Sarah Priestap

Suzanne Lorenz, a Registered Nurse, sorts through paperwork at a nurses station in the Med. Surg. Unit, the newest wing at Alice Peck Day Memorial Hospital in Lebanon, N.H., that doubled the number of beds at the hospital. Valley News - Sarah Priestap Purchase photo reprints »

Lebanon — Last year, Alice Peck Day Memorial Hospital completed the first phase of a planned two-phase renovation, updating patient rooms and reorganizing the facility to better support technology and give nurses more room to work, among other improvements.

The hospital is facing potential funding cuts as the federal government seeks to control Medicare spending at small hospitals.

Regardless of what happens with APD’s Medicare reimbursements, hospital officials say the upgrades were sorely needed. Parts of the building had not been renovated since the 1960s.

“Back in the ’60s, computers didn’t exist, so we didn’t have the proper height for counters,” said Beverly Rankin, APD’s chief nursing officer. “There is just so much more technology. … In the ’60s, they had no vision for that.”

Phase two will overhaul the radiology department, surgical services, entrance and parking area, along with expanding the hospital’s footprint. But that effort has been put on hold for the time being, said APD’s president and CEO, Sue Mooney. The hospital must focus on critical questions around what kind of health care provider it wants to be before it embarks on the project.

In April, the hospital began a strategic planning process that is expected to wrap up in December. Six task forces comprised of more than 40 people, mostly senior leadership, are exploring how APD needs to evolve as a provider in the 21st century. APD officials declined to give specifics of what is being discussed. No firm decisions have been made, Rankin said, and they don’t want to start rumors about changes ahead.

“We’re taking a very, very hard look at the services we offer, the way that we offer them and whether or not they are appropriate for a small community hospital,” Mooney said. “Can you remain independent in this environment, and if not, then what are the options to independents? It’s a pretty comprehensive look at our whole business model.”

Geriatric and primary care are among APD’s strengths and have risen to the surface during the strategy discussions, Mooney said. On the flip side, one of the areas hospital officials have been struggling with is obstetrics, she said.

There were fewer births than expected this past year, which had an impact on the budget, said Evalie Crosby, APD’s chief financial officer. Obstetrics is something many small hospitals find financially challenging. In January 2012, Valley Regional closed its birthing unit after the hospital lost $1.3 million in 2011 providing obstetrics care, midwife services and operating the birthing center.

“We’re really wrestling with obstetrics,” Mooney said. “Because while we do it really well, it’s a place where it’s just becoming harder and harder to make ends meet.”

There is no intention of closing the obstetrics unit at this time, Mooney said, and no decisions have been made to either cut or expand particular services.

APD began a new fiscal year on Oct. 1, and while the final figures have not come in, the early signs are that it will finish fiscal year 2013 in the black, Crosby said. However, the hospital is watching its bottom line carefully. Payments from Medicare have been slow coming in, which has affected cash flow, Mooney said.

About a month ago, APD instituted a “quasi-hiring freeze,” Mooney said. The hospital is still hiring, she said, but every addition to staff needs to be justified. As of August, APD had 369 full-time workers, six more than this time last year but still 13 fewer than it budgeted for fiscal 2013, Crosby said.

“Any open positions we’re not going to fill without justification,” Mooney said. “And any places where we think there’s opportunities to re-engineer the work, we’ve taken that tactic to say, ‘Can we do more with less?’ ”

APD has also discussed partnerships with other institutions, a trend in health care as small hospitals attempt to prepare for a future in which payment models and the delivery of care are changing fast.

This month, New London Hospital and Dartmouth-Hitchcock began a formal affiliation, in which they will explore ways of coordinating patient care and share certain administrative tasks.

The question over critical access status is the “elephant in the room,” Mooney said, but it’s not the only issue driving these decisions at APD. The new marketplaces launched last week, in which uninsured people can buy coverage, are but one example of how payment models are changing. And federal reforms are stepping up requirements for using technology and improving the quality of care.

Health reform experts have argued that the nation’s health care system is overbuilt and believe the days of standalone hospitals are coming to an end. Dartmouth-Hitchcock CEO Jim Weinstein has repeatedly said that New Hampshire has too many hospitals to serve its population, and providers must focus their efforts on where care is most needed rather than compete with each other for patients.

“We’re in discussions with every CEO in New England, practically, between Vermont, New Hampshire and Maine to try to create a strategy to manage populations,” Weinstein told the Valley News last month. “I think collaboration and coordination, independent of the payment system, is really important.”

APD has been part of those conversations, but no formal agreement with Dartmouth-Hitchcock has come out of them. Even if APD keeps its critical access status, the hospital can’t keep delivering care as it has in the past, Mooney said. “Health care payment reform is coming and we need to be a part of that,” she said. “To try to cling to critical access status and keep running the place the way we’ve always run it is not going to be a formula for success.”

Chris Fleisher can be reached at 603-727-3229 or cfleisher@vnews.com.

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