More than 20 laid off at Putnam County hospital

Putnam County Hospital (Photo: KTVO)

Around 20 employees were laid off from Putnam County Memorial Hospital after the facility closed its psychiatric and behavioral health unit Thursday morning.

"The psych unit is shut down," confirmed Board President Howard Luscan.

Luscan said he wasn't sure of the exact number of layoffs. The decision, Luscan said, was entrusted to the five-person executive team currently running the hospital's day-to-day. Employees tell KTVO between 20 and 25 workers were terminated.

The decision is a marked change by hospital administration that appears to have been out of the loop on the hospital's finances after the abrupt resignations of CEO Cindy Cummings and her husband COO Jerry Cummings earlier this month.

"We're looking over every fact, every figure," Luscan said of the numbers the Cummingses left behind. "Not just the psych department."

Luscan expressed complete confidence in the five-person executive team, led by chairman Nathan Baughman, that took over after the Cummingses' departure. Consequently, the board has no plans to initiate a search for a new leadership team.

Employees at Thursday morning's meeting, led by Baughman, said that the reason given for the layoffs was that the hospital could not afford to pay the only remaining doctor in the psychiatric unit, and thus would be forced to shut it down. Luscan confirmed that the unit was simply too expensive to keep.

In a meeting with KTVO requested by the board on Dec. 18, members of the board, Baughman and the hospital's CFO said the psychiatric unit had been recently closed down for "renovations," and that any rumor of trouble meeting payroll or benefits was completely without merit.

Financial reports obtained by KTVO through a Sunshine Law request show that the hospital has not posted a positive year this decadeas far back as the records go. An independent audit report from the last full financial cycle in 2014 spells it out.

"[T]he Hospital has suffered recurring losses from operations, experienced negative cash flows and has a net position deficit, which raises substantial doubt about its ability to continue as a going concern," the audit report, dated Jan. 30, 2015, says.

A "going concern," to accountants, essentially means that the business can continue to operate normally for the next year without fear of having to sell off assets just to stay afloat.

Before Thursday, the hospital had refuted any claim that a financial problem existed.

"We've got something new up in the air every day," Luscan said of the challenges of sifting through the facility's financials.

Luscan said the preliminary financial reports for 2015 still show losses, but not as large "as some years."

When the Cummingses took over in 2012, they set about refinancing the hospital's $7 million in bond debt to the county, taking off some of the immediate pressure that would have forced the hospital's closing. Three years later, the Cummingses are unemployed and the hospital's debt has grown to $9 million.

"But I don't think there's any danger of [the hospital] closing. We're over the hump," Luscan said. "Things are looking more promising."

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