LERHSNY: Brooks loaned Lake Shore $3.7M+

Lake Erie Regional Health System of New York said a meeting Monday between its board and key regional political leaders updated them on the likely closure and potential sale of Lake Shore Health Care Center.

LERHSNY formed in 2008 as the active parent organization for Brooks Memorial Hospital in Dunkirk and TLC, now comprised of Lake Shore in Irving and Gowanda Urgent Care & Medical Center.

For the first time, LERHSNY’s board Monday also revealed that in 2013 it has lent TLC/Lake Shore more than $3.7 million from Brooks Memorial Hospital to keep Lake Shore functioning – even as Lake Shore lost $9.1 million from operations.

That’s a staggering amount from Brooks, a hospital with about $42.9 million in annual revenues that expects to lose a total of $1.8 million this year from operations.

From 2008 through the end of 2012, audited figures show that TLC/Lake Shore lost $16.7 million from operations. Through October 2013, it lost an additional $9.1 million from operations, for a total of $25.8 million.

“As we move most effectively through this difficult process for all our stakeholders, we want to not only be transparent, but keep our local political leaders informed on what’s happening and what we expect will happen,” said Christopher Lanski, LERHSNY board chair.

In mid-October, the LERHSNY and TLC board of directors voted to apply to the state Health Department to close Lake Shore by Jan. 31, 2014 unless a suitable purchase could be arranged with adequate financing prior to that date. Closure may occur sooner if there is no additional funding. A revised closure plan was filed Dec. 6 with a closure date for the hospital, nursing home, and Conewango Clinic of Jan. 14, 2014 if additional funding is not found.

Officials continue to have discussions with prospective buyers for the TLC/Lake Shore campus, but to date they said they have not received a firm bid that met the minimum requirements for the sale. Those would be an adequate purchase price, but would also include interim financing until a transfer of ownership could take place. A transfer of hospital ownership could take a number of months to accomplish, since it requires prior state agency approval.

To demonstrate the impact of its support for TLC and be fully transparent, LERSHNY also released its consolidated statement of operations (unaudited) through Oct. 31, 2013. That shows losses from operations of $10.5 million for LERHSNY in 2013.

It is also important to remember that TLC/Lake Shore was financially challenged before creation of the LERHSNY system, officials said. Corporate documents show that Kaleida Health of Buffalo was the sole member of TLC from 2002-2008. It subsequently decided to exit and the state’s Commission on Health Care Facilities in the 21st Century, the Berger Commission, recommended that the inpatient beds be closed (page 205). Thus LERHSNY is not solely responsible for today’s status of TLC/Lake Shore.

Present at Monday’s meeting were, State Sen. Cathy Young; Jessica Jeune and Caitlin McGowan from the senator’s office; Jacqueline Chiarot, an aide to Congressman Tom Reed; Dr. Greg Young, state Department of Health; Assemblyman Andy Goodell; Assemblyman Joseph Giglio and Michael Brisky from his office; and LERHSNY members, Chris Lanski, board chair; Lou DiPalma, treasurer; Andy Burr, secretary; Gene Bailen, Walter Gotowka, Dr. Richard Milazzo, Dr. Virginia Horvath, Dr. Jay Bishop, Dr. Sue McNamara, Dr. John Tallett, LERHSNY medical director; Gary Rhodes, interim CEO; Jeff Morgan, CFO.

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