Lawrence & Memorial Bid For Westerly Hospital Approved By Court

came one step closer to acquiring Westerly Hospital after a judge accepted a $69 bid by the New London facility.

L&M spokesman Michael O’Farrell said Associate Justice Brian Stern of the Washington County Superior Court made his ruling this afternoon. The decision opens the offer to a state regulatory review, which would have to approve the offer before L&M could assume control of the hospital and its assets. The review could be completed as early as January.

“Today is a significant day for both hospitals,” said Bruce D. Cummings, L&M president and chief executive officer. “For L&M, it’s an opportunity for us to strengthen and improve our ability to continue what we’ve done for 100 years – improve the health of the region.

"For the Westerly Hospital, it marks the first step in restoring financial stability to a fine hospital that has been providing excellent care to its community for generations.”

Under the $69 million bid, L&M would assume Westerly Hospital’s $22 million in debt and provide a $6.5 million injection of capital funds. L&M would also invest $30 million over five years to improve technology, equipment, and the physical plant at Westerly Hospital.

L&M was one of in Westerly Hospital in April, submitting a non-binding proposal to acquire the hospital's assets. NS Healthcare Holdco LLC and South County Hospital in Wakefield, R.I. also said they were interested in taking ownership of the hospital.

Last year, Lawrence & Memorial and Westerly began discussions on to align their missions and improve health care in the region. Lawrence & Memorial has a main hospital in New London as well as 10 satellite locations in East Lyme, Groton, Mystic, Old Saybrook, Pawcatuck, and Waterford. Westerly Hospital is affiliated with medical centers in Mystic and Hope Valley, R.I.

The hospital also considered alignment in the 1990s. Last year’s discussions were put on hold after Westerly Hospital . The receivership went into effect in December and is being managed by court-appointed special master Mark Russo.

If the acquisition is approved, Westerly Hospital will retain its name and continue to operate as a non-profit acute care hospital. It would operate under the L&M Corporation, the parent company of Lawrence & Memorial Hospital, L&M Physician Association and the Visiting Nurse Association of Southeastern Connecticut. It would be separately licensed from L&M and elect its own medical staff and medical staff officers.

The agreement would require L&M to maintain Westerly Hospital as an acute care facility for five years and all clinical services for two years beyond the time the acquisition is approved.

Cummings said L&M reached an agreement earlier this month with two employees’ unions, representing over 400 workers, at Westerly Hospital. He said L&M is committed to retaining the clinical, support, and trades staff at Westerly.

“We have worked diligently for nearly a year to ensure that any agreement is beneficial for all involved,” said Cummings. “For L&M. For Westerly. For its employees. And, most importantly, for the community.”

Cummings said L&M intends to restore Westerly Hospital to a profitable facility within a three-year period.

“We will bring what we believe are solid business practices to Westerly,” he said. “Other areas of efficiency and cost reduction will come from the result of our implementation of process innovation techniques, something that has saved millions of dollars at our main campus.”