CEO says L+M's finances have recovered from hit COVID-19 delivered
New London — Having rebounded from COVID-19’s impact on its finances, Lawrence + Memorial Hospital will pay employees bonuses this year, Patrick Green, the hospital’s president and chief executive officer, said Wednesday night.
“We’ve notified staff we can afford that,” he announced during a public forum conducted online.
The forum, mandated by the state Office of Health Strategy as a condition of L+M Healthcare’s 2016 affiliation with Yale New Haven Health, came hours after the office’s release of a report showing L+M lost $11.9 million in the 2020 federal fiscal year, which ran from Oct. 1, 2019, to Sept. 30, 2020.
Green said the coronavirus pandemic interrupted the steady progress L+M had made in stabilizing its finances since the affiliation.
“We had a $29 million deficit when we started,” he said. “The following years showed measured improvement. ... Of course, we know what happened in 2020.”
Focusing on the pandemic, Green said, the hospital halted elective surgeries and sought to preserve space in its intensive care unit in the event of a surge in COVID-19 cases, “leaving our financial situation in a difficult space.” He said pandemic-related expenses, including the purchase of personal protective equipment, ventilation and other equipment, contributed to the decline in financial performance.
“But due to investments we made prior to the pandemic, we came out of it in 2021 with a positive margin,” said Green, who noted the hospital avoided layoffs.
The bonuses, or “performance incentive payments,” will be the first paid to L+M staff members since the affiliation.
According to the OHS report on the financial status of the state’s 27 acute-care hospitals, L+M’s operating expenses in fiscal 2020 outstripped the hospital’s operating revenues by nearly $16 million. The deficit was mitigated by $3.9 million in non-operating revenue from sources unrelated to patient care, such as from investments, unrealized gains on investment holdings and gains from affiliates or joint ventures.
L+M's total profit margin of minus 3% for fiscal 2020 trailed the statewide average of positive 2.6%.
In fiscal 2020, the hospital provided $23.2 million worth of uncompensated care, including $13.4 million in free care and $9.8 million in bad debt.
Yale New Haven Health’s total revenues exceeded its expenses by $36.5 million.
Backus Hospital in Norwich, a member of the Hartford Healthcare system, experienced a $4.7 million loss from operations, according to the report. But, thanks to $33.1 million in non-operating revenue, the hospital’s total revenues exceeded expenses by $28.5 million. Hartford HealthCare’s revenues exceeded expenses by $72.2 million.
Wednesday night’s virtual forum, the fifth annual and last required in connection with L+M’s affiliation with Yale New Haven Health, drew little response from the public and was over in about 30 minutes. Previous in-person forums have drawn large turnouts, including many employees.
During his presentation, Green cited the hospital’s achievements over the past year, including the resumption of the pandemic-stalled expansion of L+M’s emergency room, and a collaboration with the Mohegan Tribe, which opened the Uncasville Medical Center at Mohegan Sun in May. L+M operated a drive-thru COVID-19 testing site and a mass COVID-19 vaccination site, as well as community "pop-up" vaccination clinics.
L+M has treated 1,278 COVID-19 inpatients and has vaccinated more than 9,192 people, including 2,643 of its own employees, Green said. As of Wednesday, the hospital had 18 COVID-19 patients.
Green also reported L+M has recruited 26 primary care physicians and 45 specialists and is seeking to grow its urology, cardiology and oncology practices.
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