L+M plans to restore financial health
Groton - The parent corporation of L+M Hospital and The Westerly Hospital will work to return a positive operating margin of about 1.5 percent of revenues over expenses in fiscal 2014, determined not to repeat fiscal 2013's negative financial performance.
During Thursday's annual meeting, Fred Conti, treasurer of the L+M Healthcare Corp.'s Board of Directors, said that a plan to restore L+M's financial health is in place, but will be revised. The plan includes "radical cost-cutting measures" he did not specify, and will be modified to make up for expenses the hospital incurred during a four-week strike and lockout last month of about 800 unionized nurses and technicians.
"Some additional work is needed to deal with the cost of the strike" and lockout, Conti said.
The goal of a 1.5 percent operating margin in 2014 is half of the board's standard goal of 3 percent, which it hopes to achieve by fiscal 2015, he said. L+M ended fiscal 2013 with expenses outpacing revenues by a margin of 1.76 percent.
"The years ahead will be difficult," he said, due to reductions in Medicare and Medicaid reimbursements, declining surgical volumes and other challenges. Helping to offset those will be increased revenues from the acquisition of The Westerly Hospital, completed in June, refinancing of $52 million in debt at historically low interest rates, and pursuing opportunities to add services, he said. In addition to the two hospitals, L+M Healthcare includes the Visiting Nurse Association of Southeastern Connecticut and the L+M Medical Group.
The approximately 70 board members, corporators and administrators at the meeting, at the Mystic Marriott, were greeted upon arrival with a reminder about the labor dispute, which caused the meeting to be postponed a month. About 30 nurses and technicians with picket signs gathered on the sidewalk outside the hotel late Thursday afternoon as the meeting began. Union leaders said the demonstration was intended to send a message to board members that the contract dispute at the center of the strike and lockout has not been settled.
"This is a peaceful reminder," said Stephanie Johnson, president of the union that represents licensed practical nurses and technicians. "We want to remind them that this is not resolved, and that there are 800 people who would like a resolution."
Lisa D'Abrosca, president of the registered nurses union, said the union is hoping for "a fresh start" once contract talks resume. Members of the two unions returned to work after the lockout under the terms of contracts that expired in mid-November.
In his remarks, board Chairman Ulysses Hammond said L+M is receptive to Federal Mediator John Carpino's proposal that the two sides resume talks in February. He added that while the dispute has been "painful," there has been no wavering in the board's support for the position taken by the hospital negotiators.
"The L+M Healthcare board and I have every confidence that our position is the right one for the community and for the future of our healthcare system," he said.
It was the final meeting as board officers for both Hammond, vice president of administration at Connecticut College, and Conti, as well for board member Dr. Henry Amdur. All three have served since 2007, the maximum number of years allowed under board rules. Hammond said the final year of his three years as chairman was one of "incredible accomplishments," including the opening of a new orthopedic wing, the opening of the cancer center in Waterford and the acquisition of The Westerly Hospital. A medical office building on Howard Street in New London is being renovated and will open this year, he noted.
"It has been a wonderful ride and a professionally enriching experience," said Hammond, wiping away tears as the audience gave him a standing ovation.
Succeeding Hammond as chairman is attorney Granville Morris of East Lyme, who is senior vice president and senior trust officer at Essex Savings Bank. He has been the board's vice chairman for four years. It was also announced at the meeting that Stephen Greene will serve as chairman of the newly reconstituted board of directors of The Westerly Hospital.
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