Springfield Hospital files for Chapter 11 bankruptcy protection

Valley News Staff Writer
Published: 6/26/2019 4:43:23 PM
Modified: 6/27/2019 11:49:39 AM

SPRINGFIELD, Vt. — Springfield Medical Care Systems on Wednesday filed for Chapter 11 bankruptcy protection but said its hospital and health centers will remain open during the process.

No layoffs are planned, and the health care organization, which includes the 25-bed Springfield Hospital, plans to hold community meetings next month in Springfield, Ludlow, Bellows Falls, Londonderry, Vt., and Charlestown.

“The health centers and hospital are not closing,” Joshua Dufresne, Springfield Medical Care System’s acting CEO, said in a news release. “Patient health and safety remain our top priority, and we will continue to provide excellent health care to the region during the reorganization process.”

Hospital officials earlier this month said bankruptcy was possible as the health care system tries to restructure debt of approximately $6 million to vendors and $12 million to the bank.

It has been a “perfect storm” of factors that have spurred this move, according to a fact sheet on the health care system’s website, which cites high levels of charity care and bad debt, large claims against the organization’s self-insurance pool, low reimbursement from insurers and high-cost temporary providers as reasons the bankruptcy filing was necessary.

“Health care is evolving: models for care delivery are changing but the reimbursement models have not evolved at the same pace,” the fact sheet said.

The health care system already has worked to curb expenses by efforts such as closing the hospital’s birthing center, switching emergency department providers and cutting positions. It also has proposed eliminating its 401(k) match for employees.

The bankruptcy process is expected to take about a year and is aimed at placing the organization on “stronger financial footing,” which will give it “more options for partnering, collaborating, and finding the best solutions to serve the ever-changing health care needs of the region,” according to the release.

Hospital officials have said they are exploring a partnership with Dartmouth-Hitchcock, though officials with the Lebanon-based health care system have been noncommittal.

Though no layoffs are currently planned, nor are there plans to cut services, the fact sheet states, “We continue to monitor our overall effectiveness at providing excellent care for our patients and will adjust operations as needed. … Services will be aligned to meet the health care needs of the region.”

As for vendors awaiting payment from the health care system, they will receive notification from the bankruptcy court and be offered the chance to participate in the court process, the fact sheet said.

“The situation here is dynamic, and we intend to keep our staff, patients, and the broader community informed of our progress,” Mike Halstead, interim Springfield Hospital CEO, said in the release. “The one thing we know for sure is we need the community’s support.”

In the Upper Valley, community meetings are scheduled to take place from 6 to 7:30 p.m. at the Nolin Murray Center in Springfield on July 8 and the Charlestown Senior Center on July 18.

Nora Doyle-Burr can be reached at ndoyleburr@vnews.com or 603-727-3213.

Clarifica tion

Springfield Medical Care Systems has proposed eliminating its match for employees’ 401(k) plans but has not yet done so because of the timing involved in a change in benefits. An earlier version of this story was unclear on that point.

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