Article

FAILURE OF MAINSTREAM PRESS LEAVES THE UNDERBELLY OF NARH CLOSING UNTOLD … THE PLANET UNCOVERS MORE DOTS TO THE STORY OF HOSPITAL CLOSING … A PICTURE BEGiNS TO EMERGE

By DAN VALENTI

PLANET VALENTI News and Commentary

(FORTRESS OF SOLITUDE, TUESDAY, APRIL 8, 2014) — Yesterday’s exclusive, wherein THE PLANET exposed the nature of troubled times ahead for The Boring Broadsheet, hinted at the newspaper’s only solution to remain viable. Get real and begin practicing journalism.

It’s only hope is to wake up and actually begin doing its job, which is to crusade on behalf of its readership and citizens in general pushing thoroughness and accuracy in the cause of truth. The BB must stop running pages of Nothin’-'n-Fluff and let its reporters loose for some good new fashioned enterprise journalism — investigative reporting. As THE PLANET has proven for three and a half year, there’s no shortage of good bad stories begging to be told.

Scandal, corruption, misconduct, waste, hypocrisy, offense, transgression, opprobrium, obloquy, insult, reproach, affront and the like — official, political, departmental, personal, and otherwise — multiply exponentially in cities like Pittsfield. That must be so given the combination of a shrinking, aging, population; a growing apathy; a moribund economy; public schools that have failed to prepare young people for the future; a shrinking tax base; a growing government; and politicians — especially an overwhelmed mayor — who lack the moral turpitude and the will to do the right thing on behalf of Mary Jane and Joe Kapanski.

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THE PLANET can give you a first-rate example of The BB‘s journalistic negligence. That would be its lame coverage of the closing and aftermath of North Adams Regional Hospital (NARH). It has done little more than accept the party line. It has not uncovered the dots, let alone connected them. With its 35 or so newsroom employees, it has left the heavy lifting once again to THE PLANET. The BB gave a decent first-day coverage then gave up the ghost. Alas, there was no resurrection to follow.

THE PLANET, meanwhile, has continued with this story, working our sources and hearing from those who have or claim inside knowledge of the situation. This includes sources from the two healthcare operations, industry observers and analysts, and those from the political and legal sides both on the state and local level. Each source has supplied a piece of the picture, the dots, if you will. In this piece, we connect them into the best picture of which we are capable.

Its Eye on the Prize

It’s no secret that Berkshire Health Systems (BHS) has had its corporate eye on healthcare in North Adams for some time. The mainstream media has reported on the talks that had, for awhile, gone on between BHS and Northern Berkshire Healthcare (NBH), NARH’s corporate parent. It has painted a picture between two equal parties unable for some reason to come to an agreement. What it hasn’t reported is that the talks were one-sided, starting out one way, in earnest, but ending up little more than a reconnaissance job by BHS to probe not so much the financial viability of the entire NBH holdings but to determine which units were profitable and which were not.

These exploratory talks failed. But did they? Not according to our sources.

BHS is a sophisticated, well-managed operation. At some point during the negotiations, especially as it obtained a better understanding of NARH’s financials, BHS  realized it could not acquire all of the NBH holdings, for two reasons: (a) there were too many money-losing components and (b) the acquisition would arousing the unwelcome interest of antitrust legislators.

During the “failed” talks with the NBH Trustees, BHS received the information it wanted. It knew what most everyone else on the inside knew — that NBH was losing money — but it also got the figures to objectively identify the profitable from the unprofitable units or divisions of the hospital.

In her March 28 open letter “To the members of our community,” chairman Julia Bolton on behalf of the NBH Trustees wrote, “[W]e have for more than five years been actively seeking affiliations with larger, more financially stable organizations. These efforts have been particularly intense in the past few months, and until earlier this week, we had reason to hope  that such an arrangement would be possible. When those efforts failed, our only option was to close.”

Between the lines, the “we had reason to hope,” Bolton alludes to the cherry picking.

You can read these words as a dance over and around not with or through the truth. The “five year effort” seems genuine enough. The “particularly intense” negotiations of “the past few months” with BHS seem to have been conducted with divergent purposes. Here’s where the narrative becomes less certain.

Sources say the “particularly intense” reference is code for a split in the trustees. According to this line of thought, at some point during those months, BHS realized it could under the right circumstances cherry pick the profitable parts of NARH and leave the rest to wither on the vine. The correct contingency would entail a medical emergency such as that which would be brought on by a hospital closing.  One source says that one part of the board of trustees held secret negotiations with BHS, keeping the other trustees in the dark.

The trustees in the dark believed that an acquisition by BHS of NBH’s assets would not happen. They wished to close but follow state law and supply 90 days notice. The trustees “in the know” voted for the nuclear option of closing the doors within three days of the announcement of closing as a raison d’tete for eventually cherry picking NARH’s profitable elements. itself. Meanwhile, the plan was put in place for BHS to win emergency powers to assume the hospitals records, software, and eventually the takeover the profitable units of the operation. With all the leverage, BHS would drive what one source calls “a very hard, one-sided bargain.” These include hospice-care patients, the visiting nurse operation, the physician practices, maternity, personnel, equipment, and others.

One inside source said, “BHS is commonly known in the Berkshire health care industry as The Evil Empire for a very good reason. They are extremely effective and efficient at swallowing up profitable businesses and stamping out competition. That’s fine. They have the right. However, my frustration is that if they seem to have the inside track on all the seemingly profitable parts of NBHS. Shouldn’t they at least be forced to keep the ER open?”

How Can $8 Million Disappear in Nine Months

If you have followed The BB‘s coverage, it basically reads as if BHS dictated it. The coverage has been “BMC this” and “BMC that.” BMC is pictured in its feverish work as healthcare savior.

Of course, the actual unfolding of the master plan can be read as an example of “the best laid plans of mice and men.” The initial court order to keep the ER open at NARH folded once state AG Martha Coakley got a look at the dire financials, which were “even more precipitous than previously expected.”

Some read in those words a possibly ominous future for some of those who were in charge of the money at NBH and NARH. How could a hospital have gotten that financially ill without someone knowing about it in advance? And why hasn’t anyone explained the records on file with the state, wherein NARH reported an operating surplus of $7,503,655 and a total surplus of $8,104,614 for the 21 months up to and including the end of June 2013. How could more than $8 million disappear in the nine months from July 1, 2013 to the hospital closing on March 28, 2014? Where did all that money go?

Why was it necessary for Judge John Agostini to revise a previous temporary court order prohibiting NBH or its trustees from blocking access to its records, including its financials, by BMC or the attorney general? Coakley’s office has launched an investigation into the actions taken by NBH trustees to close the hospital so suddenly, in apparent violation of state law.

This story is far from being told. Perhaps the public will never learn the full extent of both the chivalry and the chicanery that took place to run such a needed and vital institution into the ground, plunging an entire community into uncertainty and vaporizing the livelihoods of hundreds and hundreds of innocent people. If the mainstream media continue to play pretend in their investigations of this story, the chances are good that, should a coverup be in order, one shall be delivered.

As we have stated elsewhere and prior, THE PLANET can’t do it alone. THE PLANET runs as a lone wolf, with limited resources especially time, fortified by nothing more than our belief in the crusading function of the press — that and a Rolodex.

THE PLANET places The Boring Broadsheet front and center in this indictment.

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“You have every reason to be proud.”Julia Bolton, chair, NBH Trustees, in the last sentence of her letter “To the members of our community,” March 28, 2014.

“OPEN THE WINDOW, AUNT MILLIE.”

LOVE TO ALL.

 

 

27 Responses to “FAILURE OF MAINSTREAM PRESS LEAVES THE UNDERBELLY OF NARH CLOSING UNTOLD … THE PLANET UNCOVERS MORE DOTS TO THE STORY OF HOSPITAL CLOSING … A PICTURE BEGiNS TO EMERGE”

  1. dusty
    April 8, 2014 at 1:44 am #

    The BB seems extremely reluctant to say anything negative about politicians, law enforcement or business who advertise with them. So they have pretty much handcuffed themselves as far as reporting on anything.

    • danvalenti
      April 8, 2014 at 8:15 pm #

      That’s a fair assessment, D.

  2. GMHeller
    April 8, 2014 at 2:01 am #

    So what you’re saying, Mr. Valenti, is that there was a ‘fifth column’ (aka traitors) working within the Northern Berkshire Healthcare Board of Trustees, and that this fifth column was working hand-in-glove (hand in pocket?) with Berkshire Health Systems and against the best interests of NBH in a determined stealth effort to undermine the intentions of those on the NBH board who were seeking to comply with Mass. state law to provide 90 days notice in advance of any hospital closure (which notice would have provided all interested parties — employees, labor unions, etc. — with knowledge of what was happening inside the organization and also time to prepare a response).
    The actions of NBH’s fifth column undermined all this.
    Please note as well that NBH’s sudden declaration of bankruptcy enables BHS (or any other buyer) to acquire any and all NBH assets free of pension liabilities and union obligations earlier undertaken by NBH’s now-defunct management.

    • danvalenti
      April 8, 2014 at 8:21 pm #

      GMH
      That conclusion only holds true if there was indeed that defined and sharp a demarcation on the board. There’s at least two prevalent views of this. All I can say at this point is, based on what we’ve learned, we would assign more credibility to those who say there was such a rift. We don’t think it was a matter of anyone working “against the best interests of NBH” as much as it was a case of “freeze” — too many members of the board were frozen in place by the headlights. That begs the question, of course, of how they could have not known of the dire financials. It’s probably what you find on many boards: People who agree to serve but who don’t expect to have to do much oversight or work, not because they are lazy but because they are spread so thin elsewhere. You are correct about the Chapter 7 declaration. Anyone taking over the assets would be free of the contracts. As Bull Durham reinforces from something we initially posted, it appears that the contracts agreed to by the Trustees “gave away the store.” They proved to be ruinous for an operation that was bleeding heavily from many other bad financial moves and decisions.

  3. Scott
    April 8, 2014 at 4:28 am #

    So it’s just another BHS power grab. I hate to say it but the first thing I’d do if I acquired another business is trim the fat. Make people reapply and keep the qualified people who have proven a good work ethic and can be depended on.

  4. Bull Durham
    April 8, 2014 at 6:52 am #

    Ahhh, here we go, I was waiting for the Grassy Knoll theories to come out, and I am not disappointed. Unfortunately, facts speak louder than conjecture, so let’s review the actual numbers. NBH had 10 million dollars in assets, and 50 million in debt. Now I was born at night but wasn’t born last night (with attribution to Don Imus), but my math skills tell me that means NBH was 40 million in debt.

    The vast majority of that money is owed to what are called secured lenders, meaning the bond holders who floated the bonding for the massive renovations and expansions that NBH undertook (new lobby, new MRI suite, renovations to Maternity and Intensive Care, parking garage, wound care center with hyperbaric oxygen units). The rest was for unsecured debt, of which BHS is the highest amount, at around 2 million.

    For those not skilled in how bankruptcy works, the bankruptcy trustee is assigned to liquidate assets, meaning property and equipment. That is the ‘secured’ part of debt, so the secured lenders will be the first, and only creditors to be paid off once the property is liquidated, and certainly at pennies on the dollar. What does that mean for unsecured creditors? You get zip, nada, goose-egg, zero, which means BHS is losing 2 million dollars.

    Add in what BHS will spend on opening a new emergency facility, whether at NARH or not (and it’s looking pretty certain it won’t be on the hospital property). That’s another few million dollars. So, you conspiracy-minded theorists believe a company voluntarily lost 4 million dollars to date, and will lose more than a million a year after this, since emergency services are loss-leaders in healthcare, so they could rule North Berkshire?

    Let’s not allow facts to get in the way, and the facts are these… NBH has been losing money for ten years – fact – NBH under John Cronin gave the MNA contracts that were far more generous than any others the MNA has at any other hospital – fact – NBH went on a building spree and overextended itself by 40 million dollars – fact – Medicaid patients represented the vast majority of NARH’s patients – fact – Medicaid in Massachusetts pays around 52 cents on the dollar for care – fact – NBH negotiated with three hospitals in recent years to try and merge with someone, they were BMC, Baystate Medical Center and Massachusetts General – fact – all looked at their debt and smartly said no way – fact – NBH declared chapter 11 bankruptcy and managed to clear some debt but creditors refused to accept low payments, which watered down the NBH value after coming out of chapter 11 – fact – oh and let’s not forget that NBH notified the governor, DPH and the AG MONTHS before they closed that they had ‘enough cash on hand to only operate until the end of March.’ I’ve seen the letters – fact.

    Now, go back to the Grassy Knoll and find those shooters or the hobos on the train tracks or the umbrella man.

    • danvalenti
      April 8, 2014 at 8:24 pm #

      Thanks, BULL, for your usual wise discernment and insights. By the way, we heard a rumor that the three hobos were found, along with Umbrella Man, underneath the railroad overpass in downtown Pittsfield. They were caught, apparently, watching episodes of Patrick McGoohan’s “The Prisoner.” We can only say, “hmmmmmm.”

  5. GMHeller
    April 8, 2014 at 7:38 am #

    Bull Durham,
    Assuming that what you claim is correct, why then is our Liberal Democrat Governor Deval Patrick under the mistaken impression that he “had a deal” (according to the Boston Globe) with NBH’s Trustees and that the hospital was going to be giving at least 90 days notice prior to taking any precipitous action such as closing its doors.

    • Bull Durham
      April 8, 2014 at 8:11 am #

      First of all, Glenn, what does a ‘liberal Democratic governor’ have to do with any of this. NBH began its precipitous downfall many years ago, when we had a not so liberal Republican governor named Romney, who began the large cutbacks in Medicaid reimbursement in order to ‘pay’ for ‘his’ healthcare reform plan – you remember, the one he seemed to conveniently forget having anything to do with when he ran for president.

      And all an enterprising reporter has to do is ask our governor what he meant by that statement, and I’m sure he will be more than forthcoming… with a non-answer answer. What do you expect the politicians to say? The governor is ducking for cover acting as if this was a surprise, when he knew it was coming and ignored it. The AG looks like a deer in the headlights whenever she’s asked what she knew and when she knew it. The feds like Neal and Warren are now all saying how outrageous this all is, when the healthcare plan they support is part of this collapse (yes, Obamacare has a role, but is only part and parcel). How many things have you heard this governor say that makes you shake your head?

    • b_ball8
      April 8, 2014 at 8:20 am #

      Bull- Well said and accurate. GM – do you believe everything a politician tells you? NBH mgmt and its Trustees had no leverage for any deal. There was hope of a deal, as has been stated before , but no “imminent deal” the Gov speaks of.

      • Bull Durham
        April 8, 2014 at 8:28 am #

        Thanks b_ball – and I would point to Dan’s own words from a few articles back…

        “There seems to be no doubt, however, that as a significant causative factor in NARH’s demise, overly-generous contracts hampered the hospital beyond its ability to complete in an increasingly turbulent and unsettled healthcare environment.”

        He hit the nail on the head, as usual, early on.

      • GMHeller
        April 8, 2014 at 10:27 am #

        bball8,
        Deval Patrick claims to the Boston Globe that he “had a deal” with NBH’s Trustees. Why would a Liberal Democrat Governor lie about something like that?

        • b_ball8
          April 8, 2014 at 10:42 am #

          Not sure what the liberal democrat piece has to do with anything and I cannot speak for him, but my guess is “CYA”. He’s a politician, no accountability needed.

  6. MrG1188
    April 8, 2014 at 9:39 am #

    Hey Dan, In your first paragraph I think you meant moral fortitude is what they lack…they have plenty of moral turpitude!

  7. MrG1188
    April 8, 2014 at 10:13 am #

    Hey yo Bull, if what you say is fact, what did become of the $8 million surplus from less than a year ago? This was THEIR reported number – fact.

    • b_ball8
      April 8, 2014 at 10:39 am #

      Fact – That number Dan quotes was NARH only, not the consolidated numbers.. there was no cash surplus in NBH. The physician group (ie salaries) were outside of NARH, but would be included in the consolidated. Having looked at that versus their consolidated (available at AG website), pretty sure in 2012 it had a non-cash piece from the “relief” of bond debt from the emergence from Ch 11. Sometimes the numbers you find on a gov’t website at face value doesn’t tell the whole story guys, there are no adj for one time or special items But fairly certain there was not much excess cash lying around up there.

  8. Linda
    April 8, 2014 at 2:04 pm #

    Fascinating discussion. I thank Planet for at least trying to get underneath the story. Agree with Bull about the politicians’ no-answer answers, the governor, the AG, the local reps, and I would throw in Mayor Alcombright.

  9. amandaWell
    April 8, 2014 at 5:18 pm #

    grades for the City Council will be coming shortly…I’m filtering through the bullshit.

  10. amandaWell
    April 8, 2014 at 6:06 pm #

    Planet, due to a glitch, there will be no grades for the Pittsfield City Council tonight. The glitch was a vote of 7 to 3 with an abstention by Ward 3 councilor Caccamo? The cable went out during a recess and am not quite sure what the vote is? Does a two thirds vote apply with eleven or ten counted votes? As of now,councilor Simonelli was a bright light for the Kapansky’s tonight, about time Anthony. grade A+

    • danvalenti
      April 8, 2014 at 9:02 pm #

      Thank you, AMANDA. For wading through the B.S., we will award you Combat Pay.

  11. Nota
    April 8, 2014 at 6:22 pm #

    Well, if the vote requires the whole council and there is an absentee ( you knew this would eventually come into play with Caccamo not being able to represent) that’s good question. I didn’t see the vote either. The Planet will have plenty to talk about tommorow on this. You can’t make it up!

  12. Spider
    April 8, 2014 at 6:29 pm #

    The vote failed….they needed 8 votes and got only 7.

    I commend Simonelli, Tully and Morandi for their “no” votes and voicing their concern for the taxpayers. They haven’t forgotten why they were voted into office.

    But I was very disappointed in Clairmont.

    And, of course, Cotton and Amuso are still wearing their school committee caps.

  13. Spider
    April 8, 2014 at 6:38 pm #

    The School Committee has a long, sordid history of making promises and never keeping them.

    Any one who really believes they will start rotating the purchase of buses in the next few years, as they are again promising, needs their head examined.

    • ShirleyKnutz
      April 9, 2014 at 5:28 pm #

      They are teaching their children well…tell a lie and over time people will either forget or believe it to be true. People wonder why our area is going down the tubes!!

  14. B. Clairmont
    April 8, 2014 at 7:25 pm #

    For the record, there were 11 votes. One of them happened to be an abstention. The vote needed 8 to pass. It failed.

    Someone should have looked at the charter to see what was needed to do a financing.

    Barry

  15. Nota
    April 8, 2014 at 7:42 pm #

    Barry, is it two thirds of eleven or ten was my question,thanx.

    • B. Clairmont
      April 8, 2014 at 7:58 pm #

      11