A sign outside Weeks Medical Center in Lancaster. The hospital has been embroiled in a swirling controversy and caught the attention of the Attorney General's Office. (Photo by William Skipworth/New Hampshire Bulletin)
When North Country Healthcare formed in 2016 through the merger of four rural New Hampshire hospitals, it was viewed as a first-of-its-kind model.
Weeks Medical Center in Lancaster, Androscoggin Valley Hospital in Berlin, Upper Connecticut Valley Hospital in Colebrook, and Littleton Regional Healthcare in Littleton would all maintain independence and self-governance but combine administration, finance, purchasing, marketing, and other functions. The goal was to leverage the advantages of being a bigger health system while maintaining the sovereignty of each hospital. Regulators approved the system in late 2015 and the new health system was founded in 2016.
By 2019, the system was down to three hospitals (plus North Country Home Health and Hospice Agency), with the departure of Littleton Regional. And now, 10 years later, a swirling controversy at Weeks has raised questions over whether North Country Healthcare leadership is abiding by the original agreement and what the system itself has meant for the health care landscape in the rural North Country.
A group of 70 patients, calling themselves the Concerned Patients Group, has been outspoken about their displeasure with North Country Healthcare’s direction. Their complaints have caught the attention of lawmakers, state officials, and the state attorney general’s Charitable Trusts Unit, which has launched a formal review of Weeks and North Country Healthcare. Meanwhile, a Bulletin review of federal regulatory documents, public audit records, and tax filings, as well as interviews with former North Country Healthcare executives, provides a glimpse into the accusations.
The patients’ concerns
Kyle van der Laan, 49, told the Bulletin he saw a doctor at Weeks Medical Center in Lancaster three times last spring for shortness of breath, but the doctor couldn’t figure out what was wrong.
“They just didn’t seem to have that much interest in doing anything about it,” he said, “but basically saying, ‘Wait and see. Hopefully it’ll just go away.’”
Eventually, van der Laan’s father, a retired doctor, suggested he might have a pulmonary embolism, or blood clots in the lungs. On his father’s advice, van der Laan asked to be tested for the condition, and he was diagnosed. He’s now on blood thinners for the life-threatening condition.
He said the doctor didn’t ask about his family history. Van der Laan’s father, grandmother, aunt, and great uncle all had pulmonary embolism as well.
“And that’s on my medical chart,” he said. “Eventually, I did get the care I needed in the emergency room, but only because my dad happens to be a doctor.”
Van der Laan, who was also frustrated with what he saw as an inefficient billing and doctors’ constant rescheduling of follow-up appointments, plans to find a new doctor at a different hospital.
In an email, James Patry, North Country Healthcare’s vice president of marketing, said: “We take patient concerns seriously and have clinical and quality processes to review them. We cannot comment publicly on any individual patient’s care due to federal and privacy regulations, but we encourage patients to contact Patient Relations so concerns can be reviewed through the proper clinical channels.”
Van der Laan has since connected with the other unhappy Weeks patients. The Concerned Patients Group has held meetings and been vocal about its displeasure in how the hospital is being run under North Country Healthcare.
The group’s been outspoken about the abrupt firing of a well-known doctor, Elizabeth Cooley, the recent decision to outsource the revenue cycle department, and what it sees as Weeks losing its independence. North Country Healthcare declined to say why Cooley was fired, and Cooley declined to speak with the Bulletin.
The Concerned Patients Group is led by Rebecca Weeks More, whose family helped found Weeks Medical Center.
“In 1945, my grandmother died up here because the nearest hospital was in Berlin,” More said. “And so my mother was driving back and forth with oxygen tanks and things like that, and there was no penicillin in those days. This was just as World War II was ending and soon after she died, my grandfather and his children — my mother and her siblings — basically bought the land and built the building.”
More, whose grandfather Sinclair Weeks was a U.S. senator and secretary of commerce under President Dwight Eisenhower, served on the Weeks board for almost three decades. She’s now concerned the hospital is no longer the community-focused institution her family helped found.
“If you drive into Lancaster, the first thing you see is Weeks State Park, and then you’re going to go by Weeks Memorial Library, and then you’re going to see the Weeks Memorial Hospital,” state Sen. David Rochefort, who has served as a liaison between the group and the Charitable Trusts Unit, said. “For her to really become involved in this was really kind of striking.”
More said the group’s concern began with Cooley’s firing. More than 50 patients, including at least three former Weeks physicians, have written letters asking NCH to reinstate her.
“They fired a doctor knowing full well that there was a shortage of primary care doctors,” she said.
North Country Healthcare has acknowledged its struggles recruiting primary care physicians. Last year, it announced a rural residency program aimed at attracting doctors to the region.
DOJ gets involved
North Country Healthcare’s affiliation agreement was approved in 2015 by the Charitable Trusts Unit, an office within the New Hampshire Department of Justice that, per state law, is responsible for ensuring nonprofit hospital mergers serve the community’s needs and don’t run afoul of any laws. The Charitable Trusts Unit is now revisiting the health system. In its October letter announcing the review, the unit cites complaints about “board governance, availability of primary care providers, contracting decisions, layoffs, and executive compensation.”
“There’s no part of me that has any anxiety whatsoever about this,” North Country Healthcare CEO Thomas Mee said in a December interview with the Bulletin. “We’re prepared to fully open the books, look at the compensation, look at the policies, and have at it. We have absolutely nothing to hide.”
Mee argues the merger was the only option to keep the hospitals afloat.
“There’s no scenario, none whatsoever, where any of these affiliates could stay open if they were independent today,” Mee said. “It is only through the strength of the system that we’re able to keep all three not just open but thriving.”
He said for six years in a row, the system has been profitable and no hospital has reduced services. This is despite an increasingly perilous economic environment nationwide for rural hospitals. Over the past decade, more than 100 have closed across the U.S., according to the Center for Healthcare Quality & Payment Reform.
“The reality of the situation is that we need to do things differently than we did previously if we’re going to keep all three open,” he said. “If you knew nothing about the North Country, and you were just looking at the numbers, and you said, ‘How many hospitals does the North Country need?’ The answer is one.”
Mee said consolidation is the only way to maintain multiple hospitals. He used Littleton Regional’s fate as an example. Earlier this year, the hospital announced plans to merge with Dartmouth Health.
“The objective facts would reflect that Littleton made a decision to withdraw, they went through several years of poor financial performance, whether that was a result of that or not is unknown, and now they’re seeking a partner to acquire them,” he said. “And that is exactly what we were trying to prevent with the formation of North Country Healthcare. Littleton will have no independence at the end of this. They will be a Dartmouth facility with Dartmouth oversight.”
The patients group isn’t calling for the system to be dissolved, but simply wants to ensure Weeks is moving in the correct direction, More said.
Among the complaints under investigation by the Charitable Trusts Unit is executive pay.
Mee said that, despite critics’ claims, the system has “absolutely saved costs in terms of executive (compensation),” since the merger.
However, a Bulletin review of public tax filings from each hospital and the parent organization from before and after the merger found a roughly 121% increase in executive compensation. In the fiscal year ending in 2015, before the hospitals merged, executives were collectively paid roughly $2.6 million, per the filings. (The filing documents also included board members and highest paid employees, which the Bulletin did not include in its total.)
In the fiscal year ending 2024, the most recent publicly available, the three hospitals and North Country Healthcare paid executives roughly $5.7 million. For this purpose, executives were defined by what hospitals submitted to the IRS. The filings show 10 executives across the system in 2019 as opposed to 17 executives (excluding Upper Connecticut Valley Hospital CEO Gregory Cook, who began partway through the year) in 2024.
Patry, of North Country Healthcare, argued via email that the filings are not standardized or all-inclusive; he also said the scope of the hospitals’ services have expanded and shifted over the past decade. (The chart below lists the executives and salaries used to compare executive pay in 2024 to 2015.)
Mee’s salary specifically has come into question with the patients group and several former executives arguing it’s excessive. Mee earned $724,584 in total compensation in the fiscal year ending September 2024, per the most recent tax filing. In the fiscal year ending September 2020, his first full year as North Country Healthcare CEO, Mee brought in $747,483, per the filings.
Mee called these criticisms “disappointing” and said he and all executives are compensated at the 50th percentile of other rural hospitals of the same size. He said the system hired compensation consultant SullivanCotter to help create a “very black-and-white, rigid compensation philosophy.”
“These are bigger numbers, numbers that maybe we’re not accustomed to in the North Country,” he said. “But they are average in the industry.”
Indeed, hospital CEO wage growth nationwide has skyrocketed in recent years. A study from Rice University’s Baker Institute found that, adjusted for inflation, mean nonprofit hospital CEO pay rose from roughly $1 million to $1.3 million between 2012 and 2019. Many health economists though, including the ones behind the study, question whether that’s translated to better care. The study found the largest pay increases went to CEOs of hospitals that grew the most in profits and size, not quality metrics.
The tax filings and publicly available audited financial statements also provide some insight into how the hospitals are spending their money.
In the fiscal year ending September 2024, Weeks spent roughly $18.7 million on management and general expenses. That’s 20% of the hospital’s total functional expenses of $93.2 million. That’s excluding the $32.5 million North Country Healthcare had in expenses as the parent organization. North Country Healthcare, which files its taxes separately, doesn’t pay for any direct care. In 2015, the year before the merger, Weeks spent $6.3 million on management and general expenses. That was 15% of its total expenses, which were $42.1 million that year.
The promise of the North Country Healthcare merger was to provide savings on overhead costs. However, the figures suggest overhead costs actually increased to make up a larger share of Weeks’ expenses after the merger.
As for quality of care and patient satisfaction, the federal government, via the Centers for Medicare and Medicaid Services, conducts quarterly surveys at hospitals that do significant business with Medicare and Medicaid.
At Weeks, the most recent results show 77% of patients surveyed rated the hospital 9 or 10 out of 10 (the national average is 73%) and 76% said they’d definitely recommend the hospital (national average there is 71%). At Androscoggin Valley Hospital, only 65% rated the hospital 9 or 10 and 57% said they’d definitely recommend the hospital. At Upper Connecticut Valley Hospital, 90% rated the hospital 9 or 10 and 90% said they’d recommend the hospital.
The Charitable Trusts Unit is also examining potential changes to the North Country Healthcare board structure and asked the system to pause any planned changes. The patients group is concerned Weeks’ board could be merged into the larger North Country Healthcare board — each hospital is governed by its own board while a separate board governs North Country Healthcare — and lose independence. Asked by the Bulletin whether North Country Healthcare plans that kind of restructuring, Mee said: “We’re looking at a more efficient structure of governance and, to be clear, it does not include the elimination of the affiliate boards, but we are looking at a more efficient structure.”
He declined to answer further questions about what that would look like “because that’s what we’ll be discussing with the (Charitable Trusts Unit).”
Another focus of the Charitable Trusts Unit and the patients group is North Country Healthcare’s decision to outsource revenue cycle — the department responsible for billing patients’ insurance companies, and Medicare and Medicaid — to Colorado-based Hartzler Healthcare.
Mee said the initiative was “never about saving money” but because “hiring people is difficult in the North Country.” He said only one employee was fired as a result. Everyone else, he said, was moved to a different position in the organization.
“And in an industry where 80% of my peers have already done this, it feels a little bit unusual to be getting this,” he said of the backlash. “We are literally the last to go. Everybody outsources revenue cycle.”
In a 2024 survey conducted by the Healthcare Financial Management Association, 77% of surveyed hospital executives said they partially or fully outsourced revenue cycle.
“The average lay public thinks that we provide a service, we generate a claim, and three weeks later we get paid. It is not anything like that,” he said. “We’re fighting for every cent that’s entitled to us. … We’ve got people that sit on hold for hours with insurance companies.”
The Concerned Patients’ Group alleges that hiring Hartzler Healthcare — run by former North Country Healthcare interim vice president of revenue cycle Matt Hartzler — was a conflict of interest.
“The selection of H2 (Hartzler Healthcare) was not only above board,” Mee said. “But it was a best-practice bid process.”
North Country Healthcare held a series of listening sessions throughout Coös County discussing the Charitable Trusts Unit investigation and Concerned Patients Group’s concerns.
Former executives speak out
Scott Colby was president of Upper Connecticut Valley Hospital from 2016, soon after the North Country Healthcare system formed, until late 2023, and he remained an employee of North Country Healthcare until early 2024 as the hospital transitioned to its new chief. Celeste Pitts was hired at Weeks as a staff accountant in 2006, eventually being promoted to CFO for both Weeks and Upper Connecticut Valley and then vice president of finance at North Country Healthcare. She quit in 2022.
Both are concerned about the direction of North Country Healthcare.
Colby said North Country Healthcare “was formed to create a system that supports the hospitals, and it was always intended that the hospitals would be driving the system initiatives, not that the system would be driving the hospitals.”
Mee rejects that premise.
“It was never the intent of the affiliation agreement or the intent of the system that the individual hospitals would remain independent,” Mee said. “It was never promised that these facilities would remain independent.”
He said a similar question came up in the system’s most recent strategic planning process.
“Are we four affiliates that are interdependent of each other, operating independently or are we a 66-bed regional health care system that offers inpatient services in Lancaster, Berlin, and Colebrook, with a home-based care affiliate?” he said. “It was unanimously the latter. So what I’m running here is not four independent affiliates. I’m running a 66-bed integrated health care system, and I’m blind to the lines that distinguish between affiliate and system.”
The 2015 affiliation agreement mandates each hospital “shall continue to be responsible for making decisions regarding its management, operations, investments, and finances, subject to the shared decision-making,” “retain all its respective corporate powers and authorities,” and “remain a separately incorporated and separately licensed acute care hospital.”
North Country Healthcare’s merger came amid a nationwide wave of hospital consolidations. However, research has found that this wave did little to improve patient outcomes and has increased prices. North Country Healthcare argues that because theirs was a merger of equals — as opposed to mergers where a large system absorbs a smaller hospital — and had such a unique model, they’ve avoided this problem.
The federal government tracks hospital costs through what is called a cost-to-charge ratio. This figure indicates how much a hospital is charging for its services compared to how much it costs the hospital to provide the service. In other words, a lower cost-to-charge ratio means the hospital is marking up prices more. In 2023, the most recent data available, Weeks had a 0.66 cost-to-charge ratio, according to CMS. In 2015, it had a 0.50 cost-to-charge ratio. That means the hospital marked up its prices 33% less in 2023 than before the merger, which appears to support the system’s claims. However, it’s important to note this figure is based on list prices, which may not always be the price patients ultimately pay.
Mee said North Country Healthcare’s price increases have mirrored inflation. Asked if the lack of competition from operating the only hospitals in Coös County has caused increased prices, he said consolidation gives them more leverage when negotiating with suppliers, which lowers prices.
However, the executives worry the system is moving away from the model it began as that helped it achieve this. Colby believes in the years since North Country Healthcare formed, control has been consolidated too strongly at the top, creating “top-down decision making.”
“That’s not at all what was envisioned,” he said.
Colby and Pitts said they disagreed with executive compensation increases in the years before they left. Colby called them “bloated.”
“We’re a nonprofit and usually one of the goals is always, ‘Did you make your operating margin?’” Pitts said. “It just doesn’t really feel right.”
Pitts worries the higher executive compensation will lead to increased prices for patients and services being cut.
Colby evoked the failed merger in 1994 of Catholic Medical Center and Elliot Hospital in Manchester to form Optima Health. The hospitals split in 2000, amid their own Charitable Trusts Unit review, differences in religious philosophy, and alleged violations of charity laws.
Still, asked if North Country Healthcare should split up, Colby said “emphatically no.”
“The three hospitals in Coös County need each other,” he said. “The question for everybody is: What type of system should they have? So I think that if this thing completely unwinds, it would be devastating for health care delivery in the North Country. … But the question becomes, how should the hospitals operate under a system? And I’m of firm belief that the best approach is to keep this a really novel, first-of-its-kind experiment where the hospitals and at-home care control the system, and the system does not control the affiliates.”
He acknowledges North Country Healthcare’s strengths.
“(Upper Connecticut Valley Hospital) had a very strong run while I was there, and that was in part because it was the beneficiary of the savings the system realized,” Colby said. “And there were savings at the time. But I do feel like this next phase of the system with the overhead it has, is now outsizing the hospitals. It seems that executives have been added at a disproportionate pace and created a very large financial burden.”
The most recent publicly available audited financial statements show North Country Healthcare was in a strong financial position as of September 2024.
Mee argued past executives “have an ax to grind.”
Pitts now works as an interim CFO at a hospital in Vermont, while Colby retired to Florida where he works part-time at Disney World as a greeter. Neither were fired; both quit, though Pitts acknowledged she was disappointed when she wasn’t hired as the North Country Healthcare system-wide CFO.
More, from the Concerned Patient’s Group, believes North Country Healthcare’s problems are part of a nationwide trend.
“This is hardly exclusive to the North Country,” she said. “What’s a little different up here is that it’s a homegrown operation.”
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