LACONIA — LRGHealthcare is furloughing about 600 people for as long as four months as it struggles to cope with the financial effects of the coronavirus pandemic, LRGH President and CEO Kevin Donovan said Friday.
Emergency medicine, critical care and COVID-19 services will remain open.
Gov. Chris Sununu said in an afternoon news conference that LRGH would receive a $5.25 million, zero-interest loan that will allow the hard-pressed system to stay open with remaining workers.
The money comes from a $50 million state emergency fund intended to support medical facilities until more substantial federal money becomes available.
He noted that LRGH’s financial problems go beyond the COVID-19 pandemic, but said that, if needed, the state could boost the emergency fund.
“If they can get back on their feet quickly and pay back, great,” he said. “If we need to increase the amount of the fund, we can do it and hopefully backfill with federal funds coming into the state.”
LRGH, which operates Lakes Region General Hospital and Franklin Regional Hospital, lost 60 percent of its ongoing revenue when it ended elective procedures a few weeks ago to create capacity for an expected surge of COVID-19 patients, Donovan said.
Vanessa Stafford, spokeswoman for the New Hampshire Hospital Association, said many hospitals are in a precarious position.
“While they are focused on the demands of the COVID-19 response, they have suspended many other revenue producing services,” she said.
“That has created significant financial pressures and nearly $200 million in lost revenue on a monthly basis for hospitals statewide.”
The exact dates for the start of the LRGH furlough will vary by department, with the majority of those affected off the job by the end of next week. A total of 500 full-time-equivalent positions are involved, but since some of the employees are not full-time, about 600 people will be furloughed, Donovan said.
He acknowledged the furlough will be difficult for those affected.
“It will clearly have a negative impact on personal situations and for that I feel terribly,” he said.
Employees will continue to have medical insurance coverage through LRGH and will be entitled to unemployment compensation, which has recently been boosted by $600 per week with emergency federal money.
Those affected primarily work for outpatient services, including doctor offices not essential during the pandemic. Also included are some food service workers, administrative employees and medical imaging personnel. About 650 people will remain employed by LRGH after the furlough.
“We will keep open our two hospital campuses and nursing units,” Donovan said. “Franklin will stay open as a non-COVID-19 location.
The furlough could be shortened depending on the course of the pandemic.
Among the services to be temporarily closed are cardiac rehabilitation and oncology. The advanced orthopedic specialists practice in Gilford is not expected to remain open. Interlakes Medical Center, a clinic LRGH runs in Meredith, will also close.
Scaled-down primary care centers in Laconia and in Franklin will be established.
LRGH is not alone in having to furlough employees given the financial ramifications of the pandemic.
Lowell General Hospital in Massachusetts sent home 21 percent of its staff after revenue took a 40 percent hit because of an end to elective procedures, Chief Executive Officer Jody White has said in published reports.
“You’re seeing this activity across this country, including larger hospitals than us,” Donovan said.
“It’s only a matter of time for others to make some actions to remain viable. We might be the first in New Hampshire, but I know through the grapevine that other New Hampshire hospitals are reducing workforces or considering it.”
A concern will be how many of the furloughed employees will ultimately return to LRGH. Healthcare jobs are in demand and employment is available elsewhere.
Another concern is the long-term impact on the LRGHealth system, which had a high debt load and revenue shortfalls even before the pandemic. It has been looking for a partner organization that could help it put its financial house back in order.
Donovan said that a central system has been set up for employees with the proper skill set to transition to COVID-19-related responsibilities. For example, new positions have been created to take the temperature of arriving employees as a screen for coronavirus symptoms.
So far, three LRGH employees have contracted the disease from undetermined sources in the community. There is no indication they spread the virus in the organization.
Dr. Fred Jones, chief medical officer for LRGH, said the optimum would be to be able to give all employees a quick test for the disease.
“But with the limited testing resources, we can't test everyone and rapid tests are not deployed or available,” he said. “The best we can do is screening and temperature checks.”
Jones said LRGH has enough personal protective equipment for clinical staff, but said there are fears the need could outpace supplies.
He said it’s tough to predict the timing or size of the expected surge. There is a chance that the rural nature of this area could prevent the kind of severe outbreaks being seen in some urban areas, Jones said.
Meanwhile, preparations continue.
“The whole point of this is to keep us here to provide care during the epidemic and not let our community down,” Jones said.
Mayor Andrew Hosmer said the furlough will be a major financial blow to the city and will have ripple effects throughout the local economy. LRGH is the largest employer in the Lakes Region.
“I think it will have a significant and detrimental impact to local economy,” Hosmer said. “These are 500 good-paying jobs, supporting families.
“This trickles down to not just those furloughed but to car dealerships, restaurants, dry cleaners.”
Shelley Carita, executive director of the Partnership for Public Health, said LRGH has been in a downward spiral.
“We have been hoping that a larger health care system would step in and rescue LRGH,” she said. “Now I don’t know what to think.”