Officials: Lake Shore Hospital Closure ‘Not Plan A’

Although the announcement of closing Lake Shore Hospital came as a shock to the community, Lake Erie Regional Health System of New York officials say it was not plan A.

Gary Rhodes, the interim chief executive officer for LERHSNY who was appointed in March 2013, said that by the summer he and the board of directors had started exploring options for sale of the hospital.

“Beginning in July, we started reaching out to several national companies. Our thought was that downsizing it to what was appropriate to the community would be the way to go, but because of the cash situation and the drain on the system we had to move quickly. We thought the best plan would be to sell pieces that we didn’t intend to offer. The first piece was the nursing home. We had folks look at it, but I would say if the nursing home was located across the parking lot, had its own building, it probably would be sold. But there was no interest in it because of the way it is connected to the hospital,” Rhodes said.

He said LERHSNY also explored selling the building itself, but at the time there wasn’t interest in these types of sales. He said, at that point, the board decided to do the “responsible thing” and put forward a closure plan.

“A plan of closure is a contingency plan, in case what you are working on as an alternative does not work out because you can’t have patients in the hospital and suddenly something doesn’t work out and tomorrow the hospital closes. So, it’s a contingency plan that you need to layout in a very orderly fashion, what’s going to happen if best-laid plans don’t work,” he said.

LERHSNY Board Chairman Christopher Lanski said he thinks filing the plan of closure has been misunderstood by the community.

“It’s the responsible thing to do. You are obligated by law to put a plan forward if potentially you are going to close. It is the right thing to do to make sure all those patients have a plan if something were to go awry. It’s what you have to do, and it doesn’t mean you’re going to close,” he said.

It was explained that the state Department of Health has yet to approve a closure date. However, this date does not mean that will be the final day Lake Shore is open. Lanski said the hospital could not close prior to the approved date, but could stay open after that day, depending on finances.

Lanski said Lake Shore’s financial situation was not a surprise to the LERHSNY board. He said that all nonprofit public hospitals in New York have been teetering around a zero profit. However, Lake Shore, due to the type of long-term care it offered to all patients, regardless of the ability to pay and the changing needs of the community, had run deficits from operations for several years.

Lake Shore appeared in the black because of grant money. Rhodes said that although this kept the hospital going, it is not a sustainable source of revenue in the long term.

Rhodes and Lanski added that LERHSNY does hope a buyer will take over Lake Shore.

“We sincerely hope a buyer is found so that the closure doesn’t have to happen, but the way it is right now, we can’t continue to fund it,” Rhodes said.

However, approval of a sale is complicated by the entities involved. Rhodes said the LERHSNY board has to be satisfied a buyer will meet the community’s needs, the state Health Department has to be satisfied a buyer will maintain the quality of care and issue a license and the Chapter 11 Bankruptcy Court has to be satisfied the creditors will be compensated and patient care will not be compromised.

Lanski said that this does not mean the rally to save Lake Shore cannot come into play.

“My hopes are that with a strong showing of support from the community, any potential buyer may say, ‘Wow the community is behind this.’ And it may improve their position, their interest,” he added.

In October, it was announced that the hospital would close by the end of January due to an estimated $9 million deficit for 2013.