How We Helped Springfield Hospital Navigate a Financial Turnaround

Picture of Chip Holmes
Chip Holmes
Executive Vice President, Hospital Operations

I know I am biased as a result of serving hospitals and health systems for more than 30 years, but I strongly believe –

Hospitals are the most important asset in a community.

I suspect the town manager of Springfield, VT, Jeff Mobus agrees with me.

I also worry far too many hospitals are in danger of closing their doors.

As Dr. Dwayne Gunter, CEO of Octave Leadership Advisory Services, wrote in a recent blog,

“…every state except Delaware, Maryland, New Jersey and Rhode Island has at least one rural hospital at immediate risk of closure, and even before the COVID-19 pandemic, ‘In 21 states, 25 percent or more of the rural hospitals were at immediate risk’ due to persistent financial losses and/or low or non-existent financial reserves.”

That’s why I am so proud of Springfield Hospital.

As we wrote in a new client success story, Springfield Hospital (SPH), in Springfield, VT, is a 25-bed, not-for-profit, critical access and safety net hospital. The hospital provides inpatient, outpatient, 24-hour emergency, diagnostic imaging, physical therapy, rehabilitation and general surgical services as well as specialty care and inpatient general psychiatric care.

To say SPH was a distressed hospital is a serious understatement.

As the Vermont Digger reported,

“The financial constraints that have led to the closure of 181 rural hospitals nationwide since 2005 have yet to play out in Vermont. But in the summer of 2019, one institution in the Green Mountain State came dangerously close to joining that list.

Springfield Hospital, a 25-bed facility in Windsor County, had been operating at a deficit for years. As bills mounted in 2018, there wasn’t enough money to keep the heat on or cover salaries.”

Enter Octave Leadership Advisory Services.

In late 2018, the SPH board of directors selected Octave to provide an interim CEO and CFO. Interim CEO Mike Halstead shared at a series of community town halls in 2019 and 2020,

Over a three-year period, Octave focused on financial and operational excellence, collaboration and relationship management and communication.

Springfield Hospital, Octave Leadership Advisory Services and the State of Vermont: Improve Hospital Performance

Jim Rumrill, the chair of the Springfield Hospital Board of Directors, said it best,

“We worked together to save Springfield Hospital. Between 2019 and 2022, while contending with the COVID-19 pandemic, Springfield Hospital went from one day’s cash on hand and millions owed to vendors and banks to a lower total debt, improved cash flow and positive days cash. I am grateful for the invaluable role Octave provided in catalyzing the medical and clinical staff, the leadership team, the Board of Directors, the community, the Governor and the State of Vermont.”

Springfield Town Manager Mobus said it well too.

“A closure would be a blow to residents, some of whom are on Medicaid and cannot afford to travel outside of the community for their care. The local economy, too, would suffer if the hospital, a major employer, shut down.

‘It’s access to medical care…It provides [residents] a great deal of comfort knowing that medical care is available right there in their own community.”

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