APD Says D-H Affiliation Best Fit
Concord — Officials at Alice Peck Day Memorial Hospital began exploring an affiliation with the large medical system operated by its neighbor, Dartmouth-Hitchcock, after concluding that the community hospital in Lebanon could not survive if it lost a Medicare subsidy for small rural hospitals and deciding not to explore a sale to a national, for-profit chain.
Those are among the details of the pending deal that were laid out in a September filing by APD with state regulators that oversee nonprofit corporations. Representatives of the New Hampshire Attorney General’s Office, which must approve the proposed affiliation, will be at a public hearing at Kilton Library in West Lebanon at 6 p.m. on Monday. A decision could come as early as January.
“For 75 years, APDMH has existed as a small community hospital with a loyal patient base and a limited array of services,” the filing said.
But in April 2013, reimbursement cuts by the federal agency that administers the Medicare and Medicaid programs and an across-the-board decline in the volume of revenue-generating services prompted APD leaders to begin examining future options.
The fact that Alice Peck Day was excluded from the network of providers set up for 2014 purchasers of coverage from Anthem Blue Cross Blue Shield on New Hampshire’s new Health Insurance Marketplace added to the financial worries at APD, according to the filing. (Alice Peck Day was added to the Anthem health exchange network this year.)
A task force set up by the APD Board of Trustees considered affiliating with a for-profit national hospital chain but “determined that affiliating with an out-of-state organization would not be in the best interests of the Lebanon community,” the filing said.
APD spokesman Peter Glenshaw declined to comment further.
Another task force concluded that the looming loss of its designation as a so-called critical access hospital threatened its “financial survival,” according to the filing.
Critical access hospitals are rural facilities with no more than 25 beds that get reimbursed at higher-than-normal rates for services to patients covered by Medicare, a federal program that insures seniors and some people with disabilities.
In 2013, a report by the inspector general of the U.S. Department of Health and Human Services recommended that the federal government consider excluding from the program some participating hospitals located within 35 miles of another hospital.
That apparently sounded alarms at APD, which is located about 5 miles away from Dartmouth-Hitchcock Medical Center and depended upon the critical access program for about $7.5 million of its $52.4 million in revenue in fiscal year 2013, according to the hospital’s annual report.
While the move to more tightly enforce the so-called distance requirement for critical access hospitals has faded, the courtship between APD and D-H has continued.
Benefits of the new relationship would include a reduction in financial losses now incurred by APD’s obstetrics and emergency departments and a division of labor in which less seriously ill or injured patients would receive care at APD, “thereby freeing space at D-H for the higher acuity patients,” according to the filing.
APD and D-H also aim to integrate their electronic medical records systems, which were obtained from different vendors.
APD was “in maintenance mode with our current system until a plan has been developed to migrate to the” D-H system or some other plan is adopted, according to minutes of the June 2 meeting of APD’s Board of Trustees.
Under the affiliation agreement, D-H will appoint one-third of the members of the APD board of trustees and sign off on the rest as well as on the smaller hospital’s budget and strategy.
Beginning in 2018, D-H will also have the power to appoint and remove the APD chief executive.
The APD board will be able to block changes in services at the hospital during the first 12 months after affiliation, but after that will only be guaranteed the “opportunity for meaningful input and recommendations.”
Alice Peck Day Lifecare, the affiliated nonprofit that operates two senior housing facilities on a 23-acre parcel adjacent to the hospital, will not become a D-H affiliate. Despite that, the new deal has been embraced by the affected seniors, according to the filing.
“Residents of Harvest Hill and The Woodlands, who would also be impacted if APDMH were to cease to exist, appear generally supportive of the proposed affiliation,” it said.
Rick Jurgens can be reached at rjurgens@vnews.com or 603-727-3229.
