Westerly Hospital sale process enters final stages

Finally, after a year and a half of uncertainty about the future of The Westerly Hospital, the end is in sight.

The decision this week by the Rhode Island Department of Health and Rhode Island Attorney General Peter Kilmartin to approve the sale of the financially troubled hospital to Lawrence + Memorial Hospital in New London is being met with a collective sigh of relief throughout the community.

"We're really happy the process is finally coming to an end," said Jackie Desmond, president of the union that represents Westerly Hospital nurses. "There's been a lot of anxiety among the staff. It will be a great sense of relief once L+M is in here."

With about 400 employees, Westerly Hospital is the town's largest employer. For nurses and other hospital staff, Desmond said, the uncertainty made them reluctant to take on new financial commitments.

"A lot of people put their lives on hold, not wanting to go out and get a mortgage or a car loan" until it became clear that hospital had a stable future, Desmond said.

Steven Hartford, Westerly town manager and head of the Westerly Hospital Area Residents Committee, said that knowing the closing will take place by June 1 gives the community assurance that the institution that came close to shutting down will instead stay open with new ownership and a fresh infusion of cash.

"Getting it done as quickly as possible was critical," Hartford said, noting that the hospital has seen a drop in patient numbers and an exodus of some doctors and other staff since it entered receivership in December 2010.

Now, just six months after the Rhode Island officials deemed L+M's application to buy the 125-bed hospital 20 miles to the east complete, the community can look forward to a new chapter in the 91-year-old hospital's history, Hartford said. The Rhode Island agencies considered the application under the Hospital Conversion Act, a new law that enables expedited review for hospital sales and mergers.

"Now, there are no further hurdles to the closing," Hartford said. "The community has become weary of the process. It's well accepted now that this is what's needed for Westerly Hospital."

The area residents committee's last action, he said, will be to recommend to the L+M Corp., which will be the parent of both L+M Hospital and Westerly Hospital, a new slate of community members to be on the new board of Westerly Hospital. It will also recommend two to three people to represent Westerly on the L+M corporate board, Hartford said.

L+M has agreed to present an annual report to the Westerly Town Council on how it is meeting its various financial and operational commitments to the smaller hospital, as well as its progress in carrying out a plan to bring the hospital to profitability, Hartford said.

In its application, L+M agreed to acquire the smaller hospital for $69 million. That includes assumption of $22 million in debts, closing costs of $1.5 million, $6.5 million in working capital during the first two years, and $30 million in new technology, equipment and expansion of services over the next five years.

L+M also commits to continuing Westerly as a nonprofit hospital and to maintain it as an acute care, community hospital for at least five years. It agrees to maintain all clinical services available at the time of closing for at least two years. Obstetrics services will be discontinued just prior to the closing.

As a condition of its approval, the Rhode Island health department said Westerly Hospital emergency department staff must be re-trained in caring for labor and delivery patients.

Other conditions include a requirement that L+M report to the state annually on pediatric patients who are referred from Westerly Hospital's Emergency Department to other hospitals, and that a plan be created within a year to improve primary care in Westerly Hospital's service area.

Mike O'Farrell, spokesman for L+M, said the next six weeks will be busy with ensuring all the financial preparations are in place for the closing.

"Staff have already been going over there on a regular basis, getting familiar with the physical plant, and the technical and medical operations," he said. Those visits will increase leading up to the closing to ensure a smooth transition. Dr. Christopher Lehrach, appointed earlier this year by L+M as the chief transformation officer at Westerly Hospital, will continue to be L+M's top administrator there after the closing.

Some L+M managers and other staff may be assigned temporarily or long-term to work at Westerly Hospital, O'Farrell said. The two hospitals will maintain distinct medical staffs, O'Farrell said, with one significant change. EMP, the physicians group that staffs the main L+M Emergency Department and Pequot Health Center, will also staff the Westerly Hospital Emergency Department.

While there will be a lot of behind-the-scenes activity going on to bring about the closing, O'Farrell said, patients and the rest of the public should notice little if any immediate outward signs of change.

"For patients, it will be seamless," he said.

j.benson@theday.com

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