Lawrence General Hospital, the community hospital for a city ravaged by COVID-19, is laying off 56 people and is threatening additional cuts unless it receives immediate government aid.
The layoffs include employees working in administration and patient care and amount to about 2.5 percent of the hospital’s workforce.
Financial challenges are not new to Lawrence General, which serves a large proportion of low-income residents on MassHealth, the state Medicaid program. But chief executive Deborah Wilson said she has never witnessed the hospital in such a crisis.
Lawrence General entered 2020 with financial losses, and the situation worsened through the pandemic as the hospital halted non-essential care — losing millions in revenue — and focused almost entirely on patients sick with coronavirus.
“We were weak going into COVID, and now we’re weaker coming out of COVID,” Wilson said. “It’s an unsustainable situation.”
The hospital is seeking an infusion of government aid: $10 million from federal officials and $25 million from the state. Otherwise, Wilson said, it will have to slash more spending to remain in compliance with bondholders. (The hospital has bond financing from MassDevelopment.)
“This is going to impact services this community desperately needs, like maternity and pediatrics and the things that it’s hard for me to imagine that we wouldn’t have here at Lawrence General,” Wilson said.
Hospitals in the state received more than $2 billion in aid through the federal CARES Act in 2020, and more funding this year. But Lawrence General hasn’t qualified for a payment since last summer. The hospital received $44 million from the federal government and $17 million from the state last year — but that has not been enough, Wilson said.
The hospital spent more on supplies, including personal protective equipment, during the pandemic. And while COVID-19 hospitalizations have fallen, Lawrence General still is not seeing the number of regular patients it saw before the pandemic. These challenges, hospital officials said, are in addition to a longstanding concern: that the state doesn’t reimburse them enough for providing care to patients on MassHealth.
The hospital and its affiliated doctors network lost $19 million on operations, on revenue of about $300 million in the fiscal year that ended Sept. 30.
Last week, S&P Global Ratings noted Lawrence General’s “highly vulnerable” financial situation and downgraded its credit rating to B- from B.
Lawrence, where people of color make up 85 percent of the population, has been especially hard hit by COVID-19. About 21 percent of the city’s residents live in poverty, according to US Census data.
Since the start of the pandemic, 1 in 4 Lawrence residents — or 20,000 people — have been infected with COVID-19..
Residents who became seriously ill ended up at Lawrence General, where at one point last spring, more than 100 of the hospital’s 186 beds were filled with COVID-19 patients. The number of COVID-19 patients surged again after the winter holidays.
State health officials on Tuesday did not indicate whether they would send more aid to Lawrence General. They’ve already provided tens of millions of dollars in support to the hospital, “in addition [to] working with them on their longer term fiscal situation,” said Brooke Karanovich, spokeswoman for the Executive Office of Health and Human Services.
Juana Matias, a former state representative from Lawrence who now serves on the hospital board, called on state officials to do more.
“We have not been funded adequately by the state,” she said. “The state is quick to talk about health disparities and inequities, but they’re not funding a community hospital like Lawrence in the way it needs to be able to serve the people who live here.”
“If we don’t receive these remedies,” she said, “the situation is only going to worsen.”