Decisions made over the next week could settle the uncertain fate of the financially troubled Lake Shore Health Care Center. Here are the latest key developments:
• The state Health Department has not approved the closure plan for Lake Shore and its affiliated clinics so it’s considered unlikely the hospital will close Tuesday, the date requested by Lake Shore operator TLC Health Network late last year.
• A prominent local business owner remains interested in purchasing the hospital, and Erie County Medical Center and members of the Seneca Nation of Indians are aiding the effort.
• The hospital has enough money on hand to stay open through Tuesday and potential buyers must arrange short-term financing that will allow the hospital to operate while they do their due diligence.
• State Sen. Catharine M. Young, R-Olean, has organized a rally for 12:30 p.m. today at Silver Creek High School to show strong support for Lake Shore.
• And Monday marks the next hearing in bankruptcy court for TLC, which filed for reorganizational bankruptcy in December.
“We’re in the midst of a gray zone here,” John Galati, interim CEO of TLC Health Network, said in an interview. “I believe that the group is very sincere. I think they can make it happen, and I think it will happen. The problem is the timing with the short-term financing.”
Residents and elected officials in southwestern Erie County, northern Chautauqua County and neighboring Cattaraugus County greeted with dismay October’s announcement that TLC and Lake Erie Regional planned to close Lake Shore on Jan. 31, citing persistent financial losses.
The TLC system consists of Lake Shore and its nursing home and several affiliated facilities, including the Gowanda Urgent Care & Medical Center.
“The hospital serves three counties because of its location,” said Chautauqua County Legislator George Borrello, R-Silver Creek.
TLC merged with Brooks Memorial Hospital in Dunkirk, forming the Lake Erie Regional Health System of New York, in 2008. Lake Erie Regional split off TLC as a separate entity in late October.
TLC and Lake Erie Regional contend that Lake Shore has lost more than $24 million since the merger, including $7.4 million in the first nine months of 2013, requiring Brooks to prop up Lake Shore with infusions of cash, according to the TLC bankruptcy filing.
At the time the closing was announced in October, TLC and Lake Shore had 460 workers, making it one of the largest employers in its region.
Closing the hospital would put a strain on first responders and threaten trauma patients who would have to be taken to other hospitals farther away, said Todd Johnson, Hanover’s town supervisor and a volunteer firefighter.
Since the planned closing was announced three months ago, TLC’s workforce has shrunk to the equivalent of about 350 full-time workers.
The nursing home, which had between 80 and 100 union workers in October, is down to 20 workers on part-time hours now, as the 120 beds in the facility have emptied and their union has helped them get jobs at other homes in the Southern Tier, said Todd Hobler, a vice president with Service Employees International Union 1199. No one has submitted a formal offer, Galati said, and this includes Anthony Borrello, owner of TPS Petroleum Products in Silver Creek.
The boards of TLC and Lake Erie Regional must approve any purchase offer. Borrello, a relative of the legislator, did not respond to messages seeking comment but his lawyer, Barry N. Covert, said, “He absolutely wants to keep the hospital open, if that’s at all possible.”
Covert declined to identify Borrello’s partners, but Galati confirmed that individual members of the Seneca Nation and ECMC are aiding Borrello.
ECMC isn’t seeking an ownership stake, but medical center staff have pledged to help the Borrello group thoroughly review TLC’s operations and finances, said Thomas J. Quatroche Jr., ECMC’s senior vice president of marketing, planning and business development.
Hospital staff will assess which services it makes sense to maintain at TLC’s facilities, and whether any new services should be provided, and ECMC could end up playing a role in its operations.
It’s not known which Senecas are involved in the Borrello bid. A request for comment from the Seneca Nation was answered with a letter sent by President Barry N. Snyder to Young expressing support for today’s rally and calling the hospital an “essential health care facility.”
The next hearing in the bankruptcy filing is Monday in U.S. Bankruptcy Court, where a TLC request to lease facilities in Gowanda and Forestville to Brooks will be weighed.
The state Health Department said Friday the closure plan remains under review. TLC spokesman Scott Butler said any closing likely would be preceded by 30 days’ public notice
Chautauqua Correspondent Susan Chiappone contributed to this report.