By JOSEPH FITZGERALD

WOONSOCKET — A Superior Court judge next week is expected to appoint a “co-special master” who specializes in health care to work along side the court-appointed special master who was chosen last month to temporarily oversee the financial and day-to-day operations of financially distressed Landmark Medical Center.

At a half-hour hearing Thursday morning, Judge Michael A. Silverstein told hospital and state officials that he has interviewed a half-dozen potential candidates for the position of special co-master and is expected to make an appointment next Thursday. The co-special master will work with Jonathan N. Savage, the Pawtucket lawyer who was appointed by Silverstein on June 25. Savage, who specializes in receiverships, was brought in to actively seek and evaluate potential acquisitions, partnerships and other financial solutions to help the ailing hospital.
Landmark, which has debts that exceed its assets by $7.2 million, has been in dire financial straits for years and could close by the end of the year unless someone buys it.
According to Landmark spokesman Bill Fischer, the six candidates being considered by Silverstein are all national health care experts.
“At the first hearing in June there was discussion of potentially bringing in a co-special master,” Fischer said. “The judge today continued Mr. Savage’s temporary status as special master for one more week until the special co-master is chosen next week.”
At Thursday’s hearing, Savage also gave a presentation to the court which summarized his first 21 days as special master.
“Since he has been appointed, Mr. Savage identified 3,200 vendors and creditors that have a relationship with the hospital,” Fischer said. “He’s had 25 meetings with hospital staff and has established an e-mail address so staff can contact him. He’s had weekly contact with department heads and has reached out to stakeholders and elected officials in the community. Most importantly, he has assured everyone that the quality of care at the hospital remains extremely high.”
In his financial report to the court, Savage said the hospital owes about $7.1 million to creditors and has $7 million in cash on hand, as well as $2.5 million in reserves to make principal and interest payments on $12.5 million in outstanding bonds.
“We are meeting our weekly payroll, which is about $900,000 a week,” Fischer said.
Fisher said morale at the hospital over the past month remains upbeat.
“Initially, there was some anxiety felt by the employees and staff, but I think now there is a sense of optimism,” he said. “Mr. Savage has done a good job communicating to the employees. There has been no downsizing and the patient rate is at a normal pace.”
Landmark has been aggressively seeking a potential buyer and most recently has been negotiating with Memorial Hospital of Rhode Island whereby Landmark could become part of Memorial, a move officials for both hospitals believe will preserve continuous healthcare for the region.
Landmark is the only hospital in Rhode Island in a “negative net asset” position. The situation is so bad, that hospital executives anticipate closing the facility by the end of the year unless they can find a buyer. Despite continued efforts over the past three years to partner with stronger institutions, to improve insurance reimbursements and to reduce costs, Landmark has been struggling under severe financial distress.
Two months ago, Landmark Medical Center received state permission to retreat from full cardiac surgery services at its Cass Avenue campus. As a result, Landmark stopped offering high level cardiac surgeries such as coronary artery bypass, heart valve replacement and other surgical interventions as of June 1. Instead, the hospital will concentrate on maintaining its related coronary artery balloon angioplasty and diagnostic catheterization services.
The hospital won state authorization to offer the complex heart services in 2000 but has not met the goals set at that time for a specified number of heart surgeries each year. The realignment of cardiac efforts at Landmark comes as the hospital continues to struggle with declining insurance reimbursements and a heavy burden of uncompensated care from low to moderate income patients in its Northern Rhode Island market.
The hospital is currently in merger talks with Memorial Hospital in Pawtucket as a way to stem its continuing losses and address other pending market changes expected with a possible merger of the large Lifespan and Care New England hospital networks in the state.
Lifespan includes Rhode Island Hospital, Hasbro Children's Hospital and Miriam Hospital in Providence, Newport Hospital and the children's psychiatric Bradley Hospital in East Providence. Care New England includes Women and Infants and Butler hospitals in Providence and Kent Hospital in Warwick. The companies have said the merger would allow them to economize and cut costs, particularly as they anticipate cuts in Medicare and Medicaid funding.