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Springfield Medical to restructure after receiving $1.6 million advance to stay afloat

  • Al Gobeille (VtDigger - Morgan True)


STAFF REPORT
Thursday, January 31, 2019

SPRINGFIELD, Vt. — The floundering Springfield Medical Care Systems, which plans to announce structural changes on Friday, has received a $1.6 million advance, half from the Vermont Agency of Human Services and the other half from Berkshire Bank, in order to keep the operation running.

State officials have known for several weeks that the Springfield, Vt.-based nonprofit health system that includes Springfield Hospital had only weeks’ worth of cash on hand. Officials didn’t learn until last week that SMCS would have run out of money on Wednesday of this week had the state failed to act, Secretary of the Agency of Human Services Al Gobeille said.

“The option was closing, or we loan money and have some say in how they move forward from here,” Gobeille said about the short-term funding given to the nonprofit on Tuesday.

Gobeille said the loan would give SMCS about four weeks to come up with a plan.

On Thursday, the organization said it would announce changes as part of its “efforts to reduce expenses and improve the organization’s financial performance” on Friday.

“The details of this work will first be shared with our staff and then with the community through a press release,” Michael Halstead, interim chief executive officer of Springfield Hospital, said in an emailed statement. “We will continue to be open and transparent about our efforts to restructure and ensure our organization can continue to provide great care now and in the future.”

In a memorandum of understanding that state and SMCS officials signed on Monday, SMCS is required to provide the agency with monthly financial reports and bi-monthly staffing reports. It is required to communicate bi-weekly with Gobeille or someone else from the agency, continue its relationship with the consulting firm Quorum Health Resources to oversee SMCS’s finances and management, continue to discuss a possible affiliation with Dartmouth-Hitchcock and, if recommended by an attorney, consider entering Chapter 11.

D-H spokesman Rick Adams said in an emailed statement, “We have had some preliminary, high-level discussions about how D-HH can be as helpful as possible to Springfield Hospital and its patients.”

Correction

Springfield Medical Care Systems has received a $1.6 million advance, half from the Vermont Agency of Human Services and the other half from Berkshire Bank, in order to keep the operation running. An earlier web headline with this story gave an incorrect dollar amount.