LACONIA — Concord Hospital’s pending purchase of LRGHealthcare raises questions about local availability of specialty services such as orthopedic care, but leaders of the two organizations said in a state public hearing Tuesday the deal is a win for the area.
And, LRGH President and CEO Kevin Donovan said, it certainly beats the alternative.
“This acquisition of our assets by Concord Hospital will preserve community-based health care services for the region for the foreseeable future,” Donovan said in the Zoom meeting of the Charitable Trusts Unit of the state Justice Department, which has regulatory oversight and is conducting a review.
“If this acquisition is not approved, it is my estimation that LRGHealthcare will close its doors within the next 30 to 60 days, thereby leaving no health care services in the region. We provide the majority of primary care services, secondary services, hospital services and a number of other programs for the community.”
LRGH, which operates a hospital in Laconia and one in Franklin, lost $20 million in 2019 before its financial position grew even more precarious during the COVID-19 pandemic. It filed for bankruptcy in October and Concord Hospital emerged as the sole organization interested in acquiring its assets through federal Chapter 11 proceedings.
Concord Hospital has agreed to a $30 million purchase price, which will be applied to $111 million in long-term debt held by LRGH. Most debt will be discharged through bankruptcy.
Operating expenses will decline because this debt will not have to be serviced.
Also, LRGH is paying an inordinate amount of money for information technology, and those costs will come down by 50 to 60 percent through use of Concord Hospital’s IT platform, said Robert Steigmeyer, president and chief executive officer of that hospital.
He said other key functions that can be centralized in Concord include human resources, finances, public relations and philanthropy.
“After that comes a whole number of agreements that frankly we didn’t see as viable that we need to address,” Steigmeyer said.
He didn’t elaborate, but Concord Hospital has said it will not assume any of LRGH’s professional services agreements, including ones with the Laconia Clinic and the Advanced Orthopaedic Specialists practice in Gilford, which is to disband on March 31.
“Sustainability is a really key thing here,” Steigmeyer said. “We need a viable situation moving forward and anything that would compromise the organizations from a sustainability perspective really needs to be addressed up front. Otherwise, we certainly don’t want to repeat bankruptcy just a few years downstream.”
Qualified LRGH medical providers are being invited to join the staff of Concord Hospital.
Plans are being formulated to ensure local orthopedic care in the Laconia area, said Matthew Gibb, chief clinical officer for Concord Hospital.
He also said meetings have been held with providers at the Laconia Clinic to discuss employment at Concord Hospital.
Steigmeyer said it has become clear that primary care services need to be extended in the region.
Public questions during the hearing centered on what medical services will look like after the sale.
Leaders of the two organizations said local maternity and child-delivery services will not resume. Lakes Region General Hospital closed its maternity ward nearly three years ago in a cost-saving effort. Birth numbers had been in decline and there were difficulties finding doctors for the program.
Ken Norton, executive director of the National Alliance on Mental Illness — New Hampshire, said there is a lack of services for the mentally ill, particularly in-patient treatment. He noted that the geriatric psychiatric unit at Lakes Region General Hospital closed last April.
People suffering severe mental health problems end up being boarded in emergency departments until they can be transferred for care elsewhere.
He asked whether in-patient mental health services can be maintained or increased through the merger.
Steigmeyer told Norton he was “preaching to the choir.”
“We have clearly responded to the needs,” he said. “We will continue to operate 10 psychiatric beds in Franklin for sure, absolutely, yes, and as far as geropsych goes, we need to evaluate, we need to do the planning to understand what could be done there.”
Donovan said the goal is to close the purchase deal by April 1, assuming legal and regulatory approvals are received.
Diane Quinlan, assistant director of the Charitable Trusts Unit, said in an email Wednesday that the department will not host any further public hearings on the proposed purchase but will continue to accept public comment at least until March 5.
"The Charitable Trusts Unit thereafter will make a decision and prepare a report," she said. "The Consumer Protection and Antitrust Bureau of the Attorney General’s office also is reviewing the transaction."