Lakes Region Hospital

The parent company of Lakes Region General Hospital in Laconia plans to file for bankruptcy protection.

LACONIA — The group that owns Lakes Region General Hospital and Franklin Regional Hospital is furloughing more than 600 employees, starting Tuesday.

The furloughs could last up to four months, said Kevin W. Donovan, president and CEO of LRGHealthcare, in an interview Friday.

“These aren’t the easiest times for anyone or any organization,” Donovan said, adding it was “somewhat naive” to think that hospitals would be immune to the coronavirus pandemic and acknowledging that LRGHealthcare has struggled financially in recent years.

The nonprofit hospital group had a $12.8 million operating deficit in 2017, the most recent tax returns available.

Donovan said cancelling all elective and non-urgent surgeries, procedures and outpatient visits, had resulted in a more than 50% loss of revenue.

Joan Widmer, executive director of the New Hampshire Nurses Association, said it is not uncommon for hospitals to ask staff to take time off when there are fewer patients. Nurses might be asked to take some of their paid time off.

“Right now, with the suspension of non-urgent procedures, the hospitals aren’t full,” Widmer said. “It puts the hospital in a challenging position because they’re forgoing patient admissions.”

Asking medical staff to take some of their paid time off is an appropriate decision for a hospital, she said, but she had not been aware of furloughs at Lakes Region General. Reducing staff, she said, can also help preserve personal protective gear.

Donovan said LRGHealthcare would pay for the furloughed workers’ health insurance, and said part of the hospital’s online fundraiser for COVID-19 would go to support the furloughed workers.

In a message posted on the LRGHealthcare website, Donovan said the furloughs were of 500 “full-time equivalent employees.” He later explained that meant more than 600 people — some part-time workers, and some full-time — would be furloughed.

LRGHealthcare plans to close most outpatient services, Donovan said, including doctor’s offices. He said he plans to retain “minimal medical staff to support essential COVID-19 activities.”

Laconia Mayor Andrew Hosmer and Franklin Mayor Tony Giunta both said the LRGHealthcare furloughs come at very difficult times in their communities. Lakes Region General is the largest employer in Laconia, and Franklin Regional Hospital is Franklin’s second-largest employer.

Hosmer said the COVID-19 pandemic pushed the hospitals to the edge, but rural hospitals had been struggling for a long time.

“This is the story of so many rural hospitals in our state and in our country that are just hanging on, barely,” he said. “I think we’re all incredibly sad that this day came.”

Hosmer said he worries about how the furloughs will affect the local economy, and the ability of Lakes Region General to provide the care the city needs.

Giunta said he hopes there will be some funding from the federal aid packages to help keep health care workers employed.

Donovan said LRGHealthcare was moving to partner with another care provider “in the not too distant future. He declined to name the party but said the partnership would preserve services in both Laconia and Franklin.

Loan not enough to avoid furloughs

Gov. Chris Sununu said Friday that LRGHealthcare had already received a $5.25 million, no-interest six-month loan from the state. The loan was part of a $50 million emergency fund for hospitals that Sununu created in March.

LRGHealthcare was chosen as the first loan in part, Sununu said, because their financial problems extended beyond COVID-19, which forced all hospitals to suspend their elective surgeries that are typically the profit center for most community hospitals.

Some of the more nearly $1.4 billion in federal grants coming to New Hampshire will support financially struggling health care providers.

Sununu told reporters the loan to LRGHealthcare allowed hospital administrators to furlough fewer workers than they otherwise would have, and ensured they will have health insurance.

The employees can apply for unemployment or seek other health care jobs, the governor said.

Sununu said he has directed the Department of Employment Security to build a health care workforce “flex” system to place furloughed workers at other health care centers that need help.

Sununu said that 200 different health care facilities across the state have applied for some of the $50 million loan funds.

“We understand there is a need out there; this fund is really created for those at risk of closing their doors due to an immediate cash crunch,” Sununu said. “While we can’t avoid furloughs in our state, this will allow all of our facilities to remain open as we navigate through the crisis.”

Sununu said he has no doubt that other hospitals in the state will be instituting their own furloughs in the coming weeks. But Sununu said he hopes hospitals will avoid permanent layoffs and closures. He said he worries health care workers might leave the state if they lose their jobs permanently.

The governor said if the need arises, he’s open to pouring more state support into the health care sector.

“If we have to put more than $50 million into that fund we are going to do it, absolutely,” Sununu said.

State House Bureau Chief Kevin Landrigan and staff writer Josie Albertson-Grove contributed to this report.