Claxton-Hepburn Medical Center. File photo
After months of financial uncertainty, the North Star Health Alliance (NSHA), which operates hospitals in Carthage and Ogdensburg, got some relief this week.
The New York Department of Health has approved a financing plan to provide the floundering healthcare organization up to $15 million dollars over the next two months.
One of NSHA’s attorneys, Janice Grubin, shared that news, what she called “very positive developments,” at the beginning of a U.S. Bankruptcy Court hearing on Wednesday.
She explained that just the day before, the Department of Health had notified North Star it was transferring an immediate payment of $1.3 million dollars to the healthcare group. “I understand it’s already in the queue. And they have approved a multi-stage funding process, which includes up to $15 million dollars over the next 8 weeks.”
To secure that money, North Star will be providing constant financial information to the state, will have to apply for debtor-in-possession (or DIP funding), and must explore partnering with a larger health system to stabilize its finances.
It’s major news for the North Star Health Alliance.
A 13-week cash flow forecast submitted earlier this week predicted that North Star would be in the red by over $16 million dollars by June.
The state’s commitment of $15 million dollars will help keep North Star solvent in the short term, while it pursues longer term fixes.
The news sparked a stark tonal change, compared to previous bankruptcy court hearings. Judge Wendy Kinsella called it “fantastic” and “wonderful news,” and said several times that the court was pleased with the development.
But the health group is still far from saved or stable. Financial projections, even with state help, are still grim. And more staff layoffs are raising community concerns.
About 120 employees were laid off by North Star in February. Since then, about 70 more employees have quit. And last week, North Star made another round of unspecified job cuts.
North Country Now reports that those cuts included diabetes education services and inpatient wound care. Additionally, the Women’s Health Services unit at Carthage Area Hospital announced it was closing due to “financial obligations.”
It is noteworthy that leadership at the North Star Health Alliance is almost completely different than it was just three months ago.
The Chief Restructuring Officer, Rob Bloom, is on the way out, as is his consultancy company Wintergreen.
And North Star’s new interim CEO, Andrew Manzer, seems to be making progress with the Department of Health.
“The DOH is working very well with Mr. Manzer,” said attorney Martin Mooney, who was speaking on behalf of the DOH at Wednesday’s hearing. “And we’re expecting to move the case forward. Honestly, I think we are light years ahead of where we were last week.”
It’s welcome news for communities that rely on North Star hospitals and facilities in St. Lawrence and Jefferson counties.
But as restructuring and layoffs continue, including North Star looking at more downsizing measures, it’s likely that healthcare access in this region will see permanent changes.