ENH sig

Eastern Niagara Hospital

Earlier this month, Eastern Niagara Hospital said inconsistent patient volume and financial losses had forced the hospital to file for chapter 11 bankruptcy and close its Transition child psychiatric unit.

In a Nov. 22 filing with the state Department of Health, ENH revealed the unit's losses doubled from 2018 to this year. ENH is required to submit a certificate of need to the Department of Health, and received the agency's approval, before it can eliminated any medical services.

The unit's volume declined from 2,478 days in 2018 to 2,203 this year, while the hospital also saw an 18 percent decline in the number of patients presenting to the emergency department for a psychiatric evaluation (the filing does not specify if this year's figures project or exclude the remaining months of the year).

The reduced volume may have contributed to the unit's losses jumping from $409,632 last year to a projected $813,000 this year.

ENH had used hospital savings to cover the unit's losses, but has since depleted those funds.

"There are no ENH funds that are available to continue paying the psychiatrist, staff and program supplies," the hospital wrote.

Earlier this month, ENH spokesperson Carolyn Moore said the unit is no longer "financially viable."

"Volume has been inconsistent and the unit is losing approximately $800,000 per year. Many steps were taken to secure additional funding to maintain this service, but it is no longer sustainable and is impacting the fiscal health of the entire organization," Moore said.

The hospital wrote that its Transitions unit only generated revenue through reimbursements from health insurers. However, hospital staff typically must call the insurance companies to request approval for each additional day of service, and insurers are often reluctant to pay for additional stays, according to the filing.

If the patient is uninsured, the hospital does not receive payment.

The hospital is asking the department of health if it can decertify the 12 beds of its Transitions Unit, which is the only child psychiatric unit in Niagara County. The New York State Office of Mental Health must also sign off on closing the unit.

The closure would leave ENH with 92 beds.

ENH has made a series of service cuts this year in an attempt to reorganize and reverse years of worsening financial losses.

Last year, ENH reported losses of $2.3 million, with over $65.3 million in expenses and about $63 million in total revenue, according to ENH financial statements submitted to the department of health.

ENH reported net losses of $843,317 in 2017 and $684,490 in 2016, while the hospital was consistently profitable from 2009 to 2013.

ENH wrote it is "grappling with providing services to the poor, uninsured and medically underserved ... while also achieving long-term financial viability." "ENH must fundamentally change in order to survive," the hospital wrote.

On May 1, ENH announced it will eliminate its maternity ward, family medicine residency program, dialysis center, radiology facility and the Newfane Express Care center. The maternity ward cuts, which took effect in June, followed a 35 percent reduction in deliveries over 20 years.

In August, ENH announced the elimination of its Newfane facility, including closing its outpatient physical therapy services and consolidating its treatment facility with the Lockport facility. The service cuts also eliminated 50 hospital jobs.

But "ENH cannot get to break even with service line closures alone," CEO Anne McCaffrey said earlier this month as she announced the chapter 11 filing.

"We have a responsibility to the community and the organization to be sustainable well into the future," McCaffrey added. "The Hospital needs to restructure its debt and cease providing services that are no longer financially viable. It is unfortunate, yet like many other businesses, the decision to restructure cannot be avoided.”

The hospital has declined further comment on its finances.

Recommended for you