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May 16, 2019

St. Lawrence Health System on Monday presented a draft preliminary assessment of Massena Memorial Hospital’s finances and operations. 

The draft preliminary assessment found:
•    A review of hospital performance since 2011 distinctly portrays a hospital suffering from the consequences of a declining local economy. Net patient service revenues are for the most part flat, yet expenses continue to grow.
•    Like most other rural hospitals across the country, Massena Memorial has seen a sharp decline in utilization, including a 50.4 percent decline in average daily census from 2008 through 2018.
•    In conjunction with this decline of core service utilization, a corresponding degradation of financial performance occurred. Net patient service revenues failed to grow materially while expenses rose, resulting in significant and unsustainable operating losses.
•    The scale and effect of these ongoing operating losses have been masked to some degree by non-recurring other operating revenue infusions in three of the last five years. From 2014 through 2016 MMH received in excess of $13.2M from NYS in distressed hospital funding. 
•    MMH has $7 million in accounts payable, in addition to being millions of dollars behind in payments to the New York State and Local Retirement System.
•    Conversion to a Critical Access Hospital (CAH) could mean a net revenue gain of $2.6 million in 2019. An application for CAH status was submitted in April. 
•    Next steps include determining if additional short-term funds from New York State are forthcoming, which would assist as longer-term solutions are crafted, and execution of a Supervisory Agreement and a Management Agreement that would allow St. Lawrence to operate and manage MMH, under NYS Department of Health supervision, while a long-term plan is devised. These agreements are subject to NYS Department of Health review and approval, which could take several weeks.

Loretta Perez, Chair of the Massena Memorial Hospital Board of Managers, said: “We are committed to working cooperatively with St. Lawrence and the Town to right the ship. We know we face many challenges and we are anxious to begin overcoming those challenges as we strive to maintain quality health care services for the people of Massena and the surrounding area.”
Town Supervisor Steve O'Shaughnessy said: “This is certainly not good news but I’m optimistic that working collaboratively with St. Lawrence, MMH will be able to begin to get its financial house in order and reestablish its financial footing. Our Town depends on Massena Memorial providing quality health care services for our people and I am hopeful that we will be able to continue depending on MMH for years to come.”
St. Lawrence Health System CEO David Acker said: “Our preliminary financial assessment of Massena Memorial Hospital reveals the difficult financial challenges facing the hospital. From cash on hand to accounts payable, it is clear that in the absence of significant action the viability of Massena Memorial is at risk. We look forward to continuing to work with MMH to ensure quality health care for everyone in the region.”

St. Lawrence Health System was retained in late March to perform the financial assessment of MMH. All the work related to assessing MMH’s situation and any work going forward are being done in cooperation with the New York State Department of Health, which regulates all hospitals in the state.