LAWRENCE — Lawrence General Hospital President and CEO Deborah Wilson issued a dire plea to city councilors Tuesday night, letting them know the hospital is on life support and risks closure of vital services if Gov. Charlie Baker does not supply $25 million in COVID relief aid.
Wilson, backed by Mayor Kendrys Vasquez, declared the need for emergency relief to support the hospital by way of a resolution calling for money to preserve critical services used by 87,000 Lawrence residents and 250,000 people across the Merrimack Valley, Wilson said.
“In simple terms, we are burning cash,” Wilson said. “We have not received any COVID relief payments since July 2020. We have lost volume, we have increased expenses, yet we have not received one dollar of COVID relief funding (since that time) from the federal government or the state.”
She said "without a COVID relief payment, we are going to fail our debt covenants, and when that happens, the bond holders will come in and decide which services will go away for this community. "
That is something Wilson just won’t stand for, she said.
“The community deserves maternity, deserves pediatrics, deserves a special care nursery and a trauma program,” she said. “We have one of the busiest emergency centers in the state and this threat is real.”
The money must be secured by Aug. 30, Vasquez said. In a unanimous vote, councilors declared the issue an emergency and agreed to send a letter to the governor requesting aid as outlined by Wilson and other hospital staff. They also pledged to support Wilson in any way they can, including having meetings with the governor.
The disproportionate COVID incidence rate in Lawrence required the hospital to significantly increase expenses to meet the community’s need for inpatient hospital care, particularly intensive and critical care through the first and second surges, according to a statement released by the hospital in late May.
At that time, Wilson was forced to make what she called the “difficult but necessary decision” to make approximately $6 million in staffing cuts to address an expected $20 million budget deficit.
Fifty-seven staff members in non-clinical roles were impacted, according to hospital spokesman Benjamin French. As of Wednesday, no other employees had been laid off.
The 2021 expected $20 million loss follows a downward fiscal trend for the hospital. According to French, Lawrence General Hospital lost nearly $5 million in fiscal year 2019.
In fiscal year 2020, the hospital was in the hole $13.1 million, despite CARES Act relief.
Couple that with a low MassHealth reimbursement rate, Wilson said, and it’s just too steep a mountain to climb.
According to Wilson, 30% of hospital patients use MassHealth, but the hospital is only reimbursed for 74% of those costs.
“We’re disproportionately impacted ... and it’s completely unsustainable,” Wilson told city councilors.
It’s a stark contrast from just four years ago, when Wilson said the hospital was able to borrow $108 million from the public market to replace 50-year-old operating rooms and update the very same intensive care units where COVID patients were treated.
Plans were underway to petition Baker for additional funding pre-pandemic, according to Wilson, but as soon as the coronavirus crisis hit, the hospital put its full focus on handling it.
The hospital’s money manager, Chief Financial Officer Felix Mercado, spoke passionately about the impact the hospital has on residents — and members of his own family.
“When a family member was hit by a stray bullet, he didn’t go to Boston. Lawrence General was there to save him,” Mercado said. “When my father needed to go to the hospital for cancer treatments, the hospital was there for him. When the Columbia Gas disaster occurred, we were open. More importantly, during COVID, we were there.
"As the finance guy, my job is to project out. When I look three to five years out and the funding from the state is not corrected and we’re not given money to correct the losses we’ve sustained, this hospital is not going to be here. This is not a CFO talking — this is a concerned Lawrencian talking. This hospital will not survive if it’s not given the support it needs.”