health care

Westerly Hospital files for receivership

WESTERLY HOSPITAL became the second Rhode Island community hospital in the last three years to seek the protection of receivership Wednesday.
Posted 12/7/11

WESTERLY – Westerly Hospital voluntarily filed for receivership on Dec. 7 in R.I. District Court, another sign of the financial fragility of community hospitals in Rhode Island. The court is expected to appoint a special master to work with the hospital to restructure its debt and address its financial issues.

Patient care will be unaffected by the receivership, according to Nick Stahl, the hospital spokesman. Under court protection, salaries, wages and benefits will be paid as normal, and the hospital will continue to meets its obligations to its affiliated physicians. Hospital services and hours will be unchanged.

“We have taken this action because we believe it is the best way to strengthen Westerly Hospital and ensure that it continues as a key part of our community long into the future,” said William G. McKendree, chairman of the hospital’s board of trustees. Noting that the hospital has served Washington and New London counties for nearly 90 years, McKendree predicted that when the hospital emerges from receivership, it will be a strong institution, better positioned to the serve the community over the long term.

How long the hospital will remain is an unknown factor. It took Landmark Medical Center almost three years – from June 2008 until May 2011 – to find a court-approved buyer, for-profit chain Steward Health Care. And, while the proposed purchase is currently under state review, the hospital still remains under the direction of a special master.

Westerly Hospital officials said that they hoped the amount of time in receivership would be less than in Landmark’s case.

“Westerly Hospital has endured years of financial strain as a result of a variety of factors, including being among the lowest reimbursed hospitals in Rhode Island, unfairly high state licensing fees, and the sustained economic headwinds of the past few years,” said Westerly Hospital President and CEO Charles S. Kinney. Many of these issues are either exacerbated by or a direct result of our being an independent community hospital, Kinney continued, saying that the hospital was looking at a wide range of options, including the previously announced exploration of a potential partnership with L&M Hospital in New London, Conn.

“Today’s filing moves us closer to a long-term solution that will ensure that Westerly Hospital remains a vital and enduring part of this community,” Kinney said.

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