A tough year for LRGHealthcare - LRGHealthcare suffered $11.3M operating loss in fiscal year 2015

Lakes Region General Hospital - Karen Bobotas photo


LACONIA — Drawing on a lesson from his mother, Henry Lipman, told the nearly 100 people gathered at the Beane Conference Center for the annual meeting of LRGHealthcare this week that "Nothing is as good or as bad as it seems."

It fell to Lipman, senior vice president of financial strategy and external relations, to present the financial report, which featured a $27.3 million decrease in the consolidated financial position of the organization, leaving a deficit of $29.9 million for the 2015 fiscal year ending on Sept. 30.

The not-for-profit company owns and operates Lakes Region General Hospital in Laconia and Franklin Regional Hospital, as well as the Laconia Clinic and other medical offices.

In March, LRGH signaled the gravity of its financial troubles by laying off 58 full-time employees after eliminating another 80 through attrition in the months before. Approximately a quarter of the layoffs were at Franklin Regional Hospital and the balance at Lakes Region General Hospital. The layoffs followed a regular weekly review of staffing begun in January to consider whether to fill any vacancies that arise as well as any requests for new positions or additional personnel.

Lipman was quick to stress that a one-time charge of $22.3 million incurred by refinancing the organization's outstanding debt of $133.3 million bearing an interest rate of 6 percent represents the lion's share of the decrease. By issuing $125.9 million Federal Housing and Urban Development Insured Mortgage Revenue Bonds at a fixed rate of 3.7 percent, LRGH will spare itself $46 million in debt over the life of the bonds and a savings of $3 million in the current fiscal year. The $22.3 million charge was required to secure the holders of the original debt as well as to retire that borrowing. Excluding the one-time charge, the loss to the company's consolidated financial position, Lipman said, was $7 million.

"We had an opportunity to make a long-term choice over a short-term choice," Lipman said. "We took a loss of $22 million to get a gain of $46 million."

At the same time, LRGH posted an operating loss of $11.3 million. A reduction in "disproportionate share" payments, which federal law requires states to make to hospitals serving large numbers of Medicaid and uninsured patients, contributed to the loss. Payments fell by more half, from $5.6 million in 2014 to $2.5 million in 2015. Lipman said that the decrease in disproportionate share payments reflects a change in federal policy, which is being challenged in court. Following a favorable preliminary ruling, he expects some $3 million in funding will be restored.

While total revenues slipped by less than a million to $217.8 million, expenses rose by $11 million. Salaries and benefits grew by $7 million, an increase of 5.7 percent, to $129.9 million, or 56 percent of operating expenses, which is in keeping with industry standards.

Lipman pointed to several factors weighing on LRGH's operating performance — a relatively high number of Medicaid and Medicare patients, an aging population and changes in private health insurance programs.

In 2014, 11.4 percent of the population of the Winnipesaukee Public Health Region was living at or below the federal poverty level, compared to 8.7 percent in the state as a whole. Among the patients served by LRGHealthcare, 14.4 percent were enrolled in Medicaid and 18.4 in Medicare, compared to 10.7 percent and 15.2 percent in the state. Lipman said that Medicaid and Medicare reimbursements represent about 70 percent of LRGHealthcare's gross revenues.

But, Medicaid reimbursement rates in New Hampshire are the lowest among the 50 states. And while nationwide hospitals lose on average about 14 cents on the dollar treating Medicare patients, in New Hampshire the average loss more than doubles to 30 cents on the dollar.

Meanwhile, the population of Belknap County, which represents much of the area served by LRGHealthcare, is among the most rapidly aging in the state. With a median age of 45.5, the third highest among the 10 counties. As the population ages, the demand for health care increases. But, at the same time, as people age and retire, they drop their private health insurance and enroll in Medicare. As result, the hospitals are treating a growing volume of patients but receiving less reimbursement — between a third and two-thirds less, according to the treatment and procedure — for doing so.

As private health insurers began offering plans that offset high premiums with high deductibles and co-pays, insurers seeking to enhance the competitiveness of their products and patients bearing a greater share of their health care expenses have begun exerting downward pressure on hospital charges. At the same time, when patients are unable to meet their high deductibles, hospitals are left with bad debt. Lipman noted that in the Lakes Region, with its large number of small businesses, employers tend to provide relatively less generous health insurance plans.

Lipman dismissed suggestions that the Affordable Care Act is responsible for the financial troubles besetting LRGHeathcare. He noted that the reduction in Medicare rates to finance the program have been offset by the New Hampshire Health Protection Program, which extended Medicaid coverage to some 48,000 people. "Without Medicaid expansion," he said, "we'd actually be worse off."

"It was a very tough year," Lipman said. But, without discounting the challenges, he added "there are lots of opportunities," listing the prospect of restoring disproportionate share payments, the reauthorization of the New Hampshire Health Protection Program and the federal investment in addressing mental health and substance abuse. Above all, he noted that LRGHeathcare has operated in the black for the past two quarters.

"I don't lose sleep," he remarked.


photo: Lakes Region General Hospital - Karen Bobotas photo.jpg

Blanchette trial begins - Former Belknap County deputy accused of sex assault against inmate


MANCHESTER — Did a former Belknap County Sheriff's deputy coerce a female inmate into having sex, or did she use him for his cell phone and cigarettes?
This is what a jury must decide in the aggravated felonious sexual assault case against Ernest Justin Blanchette that began yesterday with the victim testifying for all of the morning and much of the afternoon.
"I give him something, he gives me something," said alleged victim "B.H." who is still incarcerated in the New Hampshire Prison for Women in Goffstown.
Blanchette was indicted for having sex with her at an abandoned house in Bedford during her transport to Goffstown after she was sentenced to serve two to four years for a parole violation in Belknap County.
Both sides agreed that sex took place. What the jury has to decide is whether or not Blanchette coerced her into having sex by letting her use his cell phone.
In the opening statement, the state, led by Assistant Hillsborough County Prosecutor Nicole Schultz-Price, told the jury that Blanchette physically held the key to her shackles during the three times he transported her. She said that, unlike most people, inmates are not entitled to the things most of us take for granted – like the ability to call someone without being monitored or to get cigarettes.
Schultz-Price said that they state will prove four things: that they had sex, that Blanchette acted knowingly, that he was in a position of authority, and that he used his position to coerce her.
Blanchette's attorney, Brad Davis, told the jury that the sex wasn't coerced under of Blanchette's authority but because B.H. wanted to have sex with him. He said she has a long history of lying that has led to multiple convictions, including identity fraud, theft, shoplifting, and giving false statements to the police.
He also told the jury she had a financial motive, which was a civil suit against Belknap County that she told her friends was going to get her between $100,000 and $1 million.
The jury learned from Davis that B.H. was the one who knew where the abandoned house was in Bedford and that B.H. told him how to find it.
They jury also learned the two had sex once before, which was following a dentist appointment in September 2014 after he transported her to a dentist appointment. She said she found him attractive.
Judge Gillian Abramson told the jury that they were not to infer sex in Bedford from what allegedly happened in Belmont. That only the coercion was to be considered.
B.H. is a tiny woman who wore her long blond hair tied back in a tight pony tail. Under direct examination, she said she had never met Blanchette until the dentist appointment in 2014. She said she got into the van and that without saying anything, he offered her the use of his cell phone. A Bedford Police detective later testified they found two cell phones in Blanchette's duty van.
While crying on and off and seemingly shrinking into the witness stand, she wrung her hands almost continually and answered Assistant County Attorney Michael Zaino's questions. She said she was distraught after being sentenced to two years and saw Blanchette in the basement of the jail. He said he would transport one man back to Belknap County Corrections and be back for her.
She said this time she said she asked him if she could use his phone and he gave it to her. She testified she called her father, her son, and a few friends. She said she asked Blanchette if he could tell her if her fiance was wanted on any warrants in New Hampshire and the he checked on his computer and showed her that he wasn't.
B.H said Blanchette pulled down a dirt road in Loudon where she smoked a cigarette he gave her and they talked. She admitted she said she told him she wasn't going to be able to have sex for two years, but didn't remember who brought it up.
She said he drove some way on a road she said was different and asked for a second cigarette once they neared the prison but he didn't know where she could smoke it so she led him to the abandoned house. Once in the house, she said he took down his pants, that she took off hers and they has sex while he was sitting in the chair. She said they wiped themselves with some toilet paper left on the table.
She smoked a second cigarette, which the jury later learned was found by a Bedford detective and tested for DNA, and went to prison.
B.H. said she was "wicked uncomfortable" after their first encounter in Belmont but that she didn't know if she had a choice because he was the person in charge; that he, the sheriff, had control.
Once at jail, she said she told an inmate at the jail and a few day later she got pulled into the medical department, taken to the hospital for an exam which included a rape kit. She said she initially denied having sex with Blanchette when questioned by the prison detective and the first Bedford detective because she was afraid she would get in trouble and she didn't want to get him in trouble.
She also said that once the word got out she was approached by about six different lawyers about a civil suit.
Attorney Wade Harwood was in the courtroom for the entire day and will likely represent her in any civil suit. Also in the courtroom was Belknap County Attorney Melissa Guldbrandsen and her assistant attorney Adam Wood. They will be prosecuting Blanchette for nine more rape charges in Belknap County, including two involving B.H.
Under cross examination, she said said she finally admitted the sex to the third detective who interviewed her. Davis asked her if she said "she was all for it" and she said, "No, I said he didn't rape me."
Davis asked her if she was hoping for more than a cigarette when they went to the house in Bedford and she said "not hoping. Maybe I figured it would happen."
She said she was hoping he would transport her after she saw him near the holding cell in Belknap County Superior Court.
Davis got out copies of letters she had written from jail. She said she didn't know there were copies but was aware her phone conversations were recorded. In one of them, which was played for the jury, one of her friends called her out on the civil suit, saying that she had wanted to have sex with Blanchette because she thought he was sexy.
Davis read portions of three separate letters to three unknown addressees in which she stated she was going to get a big payoff from the state. She wrote that she felt guilty, that she would never put someone in jail, even a cop and that she didn't tell on him but told "some b----- inmate" who told on her. She said that now that the information was out there, she was going to make the best of it.
On the stand she said that as of now, that was the way she felt.
The final person to testify yesterday was Blanchette's estranged wife, who told the court she remembered the July 2 transport because she was working and sent him a text message that he should try to get home early because of the three-day weekend.
She said Blanchette told her that he took the late transport because he was the supervisor and he wanted to let the other guys go home for the long weekend.
She also testified that after he was sent home by the sheriff, he only gradually told her the entire story because she kept pressing him. She said he lied repeatedly to her and both his family and hers, telling one story that he only self-manipulated himself so she could see his penis because she told him she wasn't going to see any for two years.
She said he kept telling her that the jury would believe him before they would believe "some scum bag," which reduced B.H. to tears as she sat in the back of the courtroom. Blanchette's wife said Blanchette also told her that B.H. "looked like a troll," and that when she sat on him in the chair in the Bedford house, he threw he off him.
The state will finish presenting its case Thursday morning. Blanchette's defense will come after that.

Committee formed to choose a city flag


LACONIA — The City Council this week appointed what Mayor Ed Engler called "the flagship committee," which is charged with the challenge of recommending a new city flag.

The committee conssts of City Councilor David Bownes (Ward 2), Larry Frates of Frates Creative Art Center, Karmen Gifford, executive director of the Lakes Region Chamber of Commerce, Pat Tierney, executive director of the Laconia Historical and Museum Society, Steve Tucker, head of the Humanities Department at Laconia High School, and Breanna Henderson of Polished & Proper Barber Shop, who first suggested designing and flying a new flag in November.

Henderson told the council that a new flag would enhance the identity of the city. She said that the existing flag dates from 1965, when it was designed by a high school student from Gilford. Apart from the facsimile hung on the wall of the city council chamber and the flag hanging in a seldom used mayor's office, she said that the standard of the city is all but invisible.

Henderson proposed convening a committee to establish some guidelines and outlining a process for designing and adopting a new flag. She suggested consulting a website — "Good Flag, Bad Flag" — which offers five principles for designing a flag: keep it simple, use meaningful symbolism, limit the colors to three, omit lettering or seals and be distinctive.