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Noble Hospital’s contracts will be void under dissolution plan

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GOUVERNEUR — All of E.J. Noble Hospital’s contracts with its unions and others will cease to exist if its plan to dissolve goes through. E.J. Noble’s 217 employees will have to apply for jobs with Gouverneur Hospital, which will take over operations.

“We understand the jitters that causes, but the majority of the services are going to continue,” Canton-Potsdam Hospital Administrator David B. Acker said Wednesday at a press conference on E.J. Noble’s future. “We’re respectful of unions. This is not an attempt to have a non-union workforce.”

The elimination of all of E.J. Noble’s contracts, including those it has for linen, equipment and various leases, would be a consequence of the hospital’s proposal that it dissolve and sell its assets to Gouverneur Hospital.

Under the plan, both Gouverneur Hospital and Canton-Potsdam Hospital, Potsdam, which has a management agreement with E.J. Noble, would fall under the umbrella of a parent corporation, St. Lawrence Health System.

New York State Nurses Association Executive Director Jill Furillo, a registered nurse, said that her union is watching developments.

“The people of Gouverneur deserve quality healthcare where they live,” she wrote in an email. “But Canton-Potsdam executives have not committed to keep all services at E.J. Noble open for care. NYSNA is fighting to preserve care and to make sure that we all have a voice in decisions that impact our care.”

Nurses, who have been told they will be terminated Dec. 1 and have to apply for jobs with the new hospital, fear they are being forced out.

NYSNA will have a rally from 2 to 4 p.m. Monday in front of the hospital, 77 W. Barney St.

Officials at Service Employees International Union did not return phone calls for comment.

If Gouverneur Hospital is established in October, the five-member restructuring board that has been in place at E.J. Noble will continue and expand. It then will hire a human resources director who will discuss the future with NYSNA and SEIU, Mr. Acker said.

The uncertainly over jobs and union recognition has caused anxiety, said Gouverneur Mayor Ronald P. McDougall, who is also president of the Central Trades and Labor Council.

“Obviously, there’s concern about it, but the hospital’s still running,” he said. “I think it’s all subject to negotiation. I’m sure the board will look at it.”

Mr. McDougall said he expected the hospital soon to issue employees a Worker Adjustment and Retraining Notice as required by the U.S. Department of Labor in advance of E.J. Noble’s closing.

“Nobody wants to get a WARN notice, nobody,” he said.

However, Mr. McDougall said, he was cautiously optimistic that a hospital would continue to provide health care in Gouverneur.

a question of services

E.J. Noble’s 217 employees include 170 full-time equivalents. After the state Health Department temporarily closed E.J. Noble’s lab Sept. 28 for deficiencies, 70 of the hospital’s 245 workers at the time were laid off. Later, more than 20 returned to work.

The number employed by Gouverneur Hospital will depend on the services it offers, Mr. Acker said.

“I see great growth opportunities here,” he said.

The dissolution of E.J. Noble and the purchase of its assets by Gouverneur Hospital would allow the restructuring of E.J. Noble’s $16 million debt and provide the capital to recruit providers, make repairs and purchase modern equipment, Mr. Acker said.

“I think the question in most people’s mind is how this will benefit the citizens of Gouverneur,” he said. “It’s become clear to us that what is really important here is a fresh start.”

The Gouverneur hospital already has paid bills owed local vendors and it has been working with some creditors to modify other outstanding debt. An arrangement with the National Automatic Sprinkler Pension Fund, the bondholder for the hospital’s recent expansion project, has been worked out, Mr. Acker said.

With state Supreme Court in St. Lawrence County as the arbiter during dissolution proceedings, others owed money will be offered partial settlement, leaving Gouverneur Hospital with a clean slate on how it provides health care and obtaining needed funding to improve services, Mr. Acker said.

status quo unsustainable

E.J. Noble’s annual revenue of about $13 million cannot achieve what has to be done to modernize information technology, buy equipment, fix what breaks, provide formalized staff education and implement case management or patient safety, let alone pay down its debt, he said.

“It’s unsustainable,” board Chairman Michael J. Burgess said.

Debt resolution under the dissolution plan also will improve the hospital’s credit from day one of it becoming Gouverneur Hospital. Many vendors for years have demanded cash on delivery before they make a drop off, Mr. Burgess said.

Declaring bankruptcy was considered by the E.J. Noble board, which had the assistance of a restructuring firm, but was ruled out, Mr. Burgess said.

Designation as a critical access hospital, which will mean increased Medicare reimbursements, will translate to $1.5 million more in annual revenue, Mr. Acker said.

The status of Kinney Nursing Home, which is affiliated with the hospital, is being reviewed by an outside consultant, Mr. Burgess said.

“There’s no real answers right now,” he said.

The nursing home had a modest loss in 2012 of about $60,000, but that was only because of a settlement, Mr. Acker said. The nursing home more typically loses $250,000 to $400,000 annually.

Combining forces with Canton-Potsdam Hospital also improves each other’s fortunes, he said.

“Just as Gouverneur needs to grow, Canton-Potsdam needs to grow,” Mr. Acker said.

Together, the two hospitals will be the primary health care catchment area for 73,000 of the county’s population of 112,000.

“That changes things for all the people that are serviced,” Mr. Acker said.

For example, instead of three ob/gyn doctors based in Canton, St. Lawrence Health System could attract a fourth physician who would spend several days a week providing service in Gouverneur.

“That’s huge because there isn’t anyone right now,” Mr. Burgess said.

Having resources to improve such things as emergency room waiting time and speed up laboratory turnarounds will result in better patient outcomes, Mr. Acker said.

“It really does yield better care,” he said.

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