Much of Brooks-TLC Hospital in Dunkirk seems built for another generation, a 180,000-square-foot behemoth full of mismatched and outdated décor. It still has some four-patient rooms, and the narrow opening to its fast-track emergency area can’t accommodate a wide bed.
Still, Brooks-TLC has tried to update the existing hospital and grow services. It has purchased advanced mammogram technology and also has a busy, and modernized, infusion therapy suite.
“We do a really good job with what we have,” Julie Morton, the health system’s chief nursing officer and chief operating officer, says as she walks around the hospital.
But, more than ever, it feels like Brooks-TLC Hospital System’s seven-year quest to build a new hospital is at a critical juncture.
The hospital’s financial condition is deteriorating, and maintaining an aging hospital isn’t getting any cheaper. The hospital is propped up by tens of millions of dollars in state funding, which has kept the operation from joining the list of 186 rural hospitals that have closed across the country since 2005. In fact, Brooks-TLC, which has a management agreement with Buffalo-based Kaleida Health, had closed the former Lakeshore Hospital campus in Irving in 2020 due to fewer patients using its services.
Still, Brooks-TLC has tried to update the existing hospital and grow services. It has purchased advanced mammogram technology and also has a busy, and modernized, infusion therapy suite.
“We do a really good job with what we have,” Julie Morton, the health system’s chief nursing officer and chief operating officer, says as she walks around the hospital.
But, more than ever, it feels like Brooks-TLC Hospital System’s seven-year quest to build a new hospital is at a critical juncture.
The hospital’s financial condition is deteriorating, and maintaining an aging hospital isn’t getting any cheaper. The hospital is propped up by tens of millions of dollars in state funding, which has kept the operation from joining the list of 186 rural hospitals that have closed across the country since 2005. In fact, Brooks-TLC, which has a management agreement with Buffalo-based Kaleida Health, had closed the former Lakeshore Hospital campus in Irving in 2020 due to fewer patients using its services.
That facility will be roughly half the size. The plan calls for a 57,634-square-foot, 15-bed microhospital and adjoining 35,883-square-foot medical office building in the Village of Fredonia, with convenient access to I-90 and routes 20 and 60.
The microhospital concept – similar to Catholic Health’s Lockport Memorial Hospital – fits into where health care is headed, while the medical office building would feature services such as primary care, physician specialties, diagnostics and physical therapy.
The approximately $71 million plan would be covered by funding long ago awarded by the state, though the state has yet to release the funds and has provided no timeline for if and when it will do so.
A vital need
Various concerns have delayed the project, including the planned hospital’s long-term financial viability. Covid, too, disrupted progress. Most of all, perhaps, the hospital’s potential relocation is a hot-button local issue, with Dunkirk officials and residents not wanting to lose the facility.
A recent local agreement, however, may provide some momentum for the hospital plan, which, leaders agree, will at least preserve health care access for residents in and around northern Chautauqua County.
That’s a big deal for patients like Jean Smith, who received treatment during a recent visit to the hospital’s busy physical therapy unit. Smith, 76, said her husband had driven her 30 minutes to the hospital from their home in South Dayton, Cattaraugus County.
“It was either here or Jamestown, and that’s too far in the winter,” she said.
Judith Wach, the facility’s director of rehabilitation services, said the physical therapy unit – like other services at Brooks-TLC – has a lot to offer patients, though she wishes clients wouldn’t have to walk through an old hospital and take an elevator to get to the unit’s third-floor location.
She believes the new facility will provide patients a more accessible first-floor option in the planned medical office building.
“This is an opportunity to give the community the best space,” she said.
A long-delayed plan
The new hospital plan was set in motion in March 2016 when Kaleida said it was affiliating with Brooks Memorial and nearing a similar arrangement with TLC Health Network in Irving.
That came on the heels of a state grant to help restructure the small, and financially struggling, Chautauqua County hospitals. Â
Kaleida, with Brooks and TLC – which later merged to form Brooks-TLC, developed a multiyear plan to change the way care was delivered in southern Erie and northern Chautauqua counties.
That involved finding a new location for Brooks Memorial, since renovating the structure and adapting it to modern health care wasn’t seen as cost-effective.
Some local officials and residents expressed concern about the hospital potentially leaving the City of Dunkirk, especially without a plan to address the gap in services such a move could create for the poorest citizens who lacked transportation. Further, many local officials were frustrated by the lack of transparency in the site-selection process, which created uncertainty.
By fall 2017, Brooks announced a plan to build a 29-bed hospital in the Town of Pomfret to replace its aging 65-bed Dunkirk facility. It wanted to open the new hospital by late 2019 or early 2020.
But by early 2019, after “planning issues and zoning challenges” with the 26-acre Pomfret site, Brooks shifted gears and zeroed in on a 30-acre site in the Village of Fredonia, 3 miles away from the existing hospital.
Hospital officials hoped to break ground in spring 2019, targeting a late 2020 opening.
But that timeline also would come and go.
Waiting on the state
After seven years of delays, Sen. George Borrello, R-Sunset Bay, expressed confidence that momentum is finally building.
Hospital leadership and local officials have reached a deal that would allow Dunkirk Local Development Corp. to acquire the existing hospital property for $1 if and when the project in Fredonia moves forward. The deal gives local officials a jump-start on seeking developers to redevelop the property.
While Dunkirk Mayor Wilfred Rosas said he still prefers the hospital stay in the city, they also want to ensure the region maintains access to health care.
“The [Brooks-TLC] board of directors has made it very clear that they don’t think they’re going to be in the city and, if they don’t receive funding, there is potential that there could be no hospital in the City of Dunkirk or the Village of Fredonia,” he said.
With the agreement, Rosas noted, at least Dunkirk will control the redevelopment at the existing hospital site. Further, he said, the agreement could allow for some medical services at the Central Avenue site.
While updates from the state Health Department have been slow, Borrello took comments Gov. Kathy Hochul made during an unrelated event in Dunkirk last month as a good sign for the hospital project.
When Hochul was asked when the state would release the funding for the new hospital, she said: “We’ll be happy to give you an update soon, but this is very important to our health team and we’re involved in the conversations about keeping it viable. It’s important as a job creator but also we need a place to go to get care when you’re sick.”
Now, Borrello said he and other elected officials are pressing Hochul and the Health Department to finally move forward.
Brooks-TLC was recently given a six-month extension, through June 1, on its deadline to purchase the property in Fredonia, which is a grape field off East Main Street owned by Cornell Cooperative Extension.
The longer the state waits to release the long-ago allocated funding, Borrello argues, the more it is costing taxpayers via the significant dollars needed to keep the old hospital afloat.
“The bottom line is the state is still subsidizing these losses, and it’s unnecessary,” he said. “The inaction is just going to perpetuate these steeper losses versus creating a new facility.”
Financial challenges
Brooks-TLC has been hemorrhaging cash for years.
For the four years ended Dec. 31, 2021, the health system incurred an operating loss of about $55.2 million, according to a report last year by a commission that reviewed the hospital plan.
Government relief helped to offset those losses.
From 2018 to 2021, the Health Department provided more than $40 million to Brooks-TLC through funding streams such as the Vital Access Provider Assurance Program, an initiative geared toward hospitals in severe financial distress.
On top of that, the report noted, the hospital system received about $14.5 million in Covid relief funds from the federal government. The hospital also received a $4 million forgivable Paycheck Protection Program loan in late April 2020.
Morris said the relief, particularly the state’s Vital Access Provider funding, has kept the hospital running.
“If it wasn’t for that program, we would be at a place where we wouldn’t be operating today,” he said.
As federal relief has dried up, the finances of Western New York hospitals have languished.
Brooks-TLC’s financial condition is only worsening amid soaring inflation, higher labor costs and revenue declines. Labor costs can weigh heavily on a small hospital such as Brooks-TLC because it competes for the same regional talent with the likes of much larger health systems.
As he spoke in mid-January, with Brooks-TLC tallying its final 2022 financials, Morris said he expected the hospital system to log an operating loss of more than $20 million for last year.
If Brooks-TLC continues in its current facility, a consultant to Brooks estimated the operation will lose at least $15 million a year through 2030.
If the new hospital is built, that consultant estimates annual losses can be trimmed to $3.3 million – still potentially a money-losing operation, though closer to the break-even point.
How it all leads to Kaleida
Kaleida has long had a state-approved management agreement with Brooks-TLC, helping to recruit physicians to the area, integrating the Dunkirk operation onto a common technology platform and leveraging its back-office infrastructure.
If the new hospital is built, that relationship will deepen.
“The vision has always been upon completion of the new construction project, Kaleida Health would bring Brooks-TLC under the umbrella of the health system,” Kaleida President and CEO Don Boyd wrote in a Sept. 8 letter to the commission that reviewed the hospital plan last year.
Boyd confirmed this month that Kaleida would “strive to have an even more integrated relationship” with Brooks-TLC if and when the new facility is built.
Boyd, who was Kaleida’s executive vice president of business development when it affiliated with Brooks, said those involved with the project always said they needed three things for the new hospital to be realized: a plan, a timeline and funding.
“We remain committed to the project of the replacement hospital, and we believe that’s vital for that community to maintain access to care,” Boyd said. “We’re eagerly awaiting the outcome of the next steps from a capital perspective to fund a project, because we have a plan, we have a timeline – we would need the funding.”
Source: The Buffalo News