Cutbacks threaten Cape Ann hospital

And when her father, a retired fisherman, was crushed by a forklift on a Gloucester wharf, hospital staff she had known for years gently persuaded her not to go into his room.

"The nurse said, `Louise, I will stay with him until he dies,' " Palazzola said from behind the counter at Stuff, the jumbled store on Main Street where she sells old china and other relics of Gloucester's past -- and now collects coins to fight for the hospital's future.

The Cape Ann towns of Gloucester and Rockport are locked in a fierce battle with Addison Gilbert's parent organization over the fate of the 187-year-old hospital, a fight in which growing concern about the plight of community hospitals across the state has been magnified by a very local sensitivity to loss.

Trustees of Northeast Health System, which absorbed Addison Gilbert in 1995, said a month ago that the hospital has lost $13 million since the merger and might have to close if it cannot make a series of changes. Their most controversial proposal is to eliminate emergency surgery after hours and on weekends.

Hospital officials say their goal is to keep the emergency room open at Cape Ann's only hospital, and that the surgery cutback will help them do that by saving about $500,000 a year. But many local residents and officials, convinced that Northeast's real aim is to funnel patients to its main facility in Beverly, argue that any more cuts at a hospital that has already lost 52 of its original 110 beds will drive business away and force Addison Gilbert to close anyway.

The fight over Addison Gilbert reprises a debate that has raged across Massachusetts over when and how the state should step in to protect vulnerable hospitals -- and over the effect of hospital deregulation that started the "merger mania" of the 1990s.

This summer, Waltham Hospital closed seven years after a merger with Harvard-affiliated CareGroup. Supporters of the hospital argued that cuts by CareGroup drove away so many doctors that Waltham could not recover, even under a new, independent board that wanted to keep it open.

Doctors on Cape Ann worry the emergency-surgery cutback would have a similar effect. "This is being seen as a way of inexorably dismantling the place," said Dr. Sidney Wedmore, a Rockport internist and former Addison Gilbert trustee.

This week, state Senator Bruce Tarr, Republican of Gloucester, who heads a local task force to support Addison Gilbert, is expected to introduce a bill that would require hospitals to prove that a service is financially unsustainable before closing it. Another bill, sponsored by Representative J. James Marzilli Jr., Democrat of Arlington, would essentially place a small tax on all hospitals to support the ones in trouble.

On Cape Ann, geography is at the heart of the dispute. The clear, grassy Annisquam River cuts through the base of Cape Ann, making it an island. Two bridges, one a drawbridge, connect it to the mainland. That makes it hard for Addison Gilbert to attract new patients. Hospital officials say Cape Ann's 40,000 residents are not enough to sustain the current level of services; on an average day, half the beds are empty.

But that isolation also makes residents passionate about Addison Gilbert -- both because they see their long tradition of donating to the hospital as a symbol of their self-sufficiency, and because they are afraid a traffic jam could trap them on the wrong side of the bridge in a medical emergency. The closest hospital is Beverly, 20 minutes further down the road. It can take an hour to get to Beverly from Rockport in summer traffic.

Losing any more hospital services would be an extra twist of the knife for a community already buffeted by outside forces. Strict new fishing limits added last week to an existing web of regulations that have put pressure on Gloucester's 370-year-old fishing industry. For Angela Sanfilippo, president of the Gloucester Fishermen's Wives Association and a former hospital trustee, Addison Gilbert is "the next thing that needs to be safeguarded."

Community anger at hospital networks has been common across the state during the last 20 years, as Massachusetts has lost half its hospital beds. Residents are particularly piqued when a hospital merges with a larger organization in a bid for survival, only to be downsized or shut, said Paul Dreyer, deputy director of health care quality at the Department of Public Health. But on Cape Ann, the two sides have reached a new level of mutual mistrust, he said. "This is the worst I've seen."

Gloucester Mayor John Bell calls Northeast president Stephen R. Laverty "tough to deal with because he's operating from the assumption that there will be some reduction of services." Laverty calls the board's plans "positive" efforts designed to keep the emergency room open.

Peggy O'Malley, a Gloucester registered nurse, led a group that unsuccessfully sued Northeast over use of donated funds. Residents worry that Northeast might sell the hospital's collection of paintings by Cape Ann artists like Fitz Hugh Lane, though hospital officials say they will not.

Senators John F. Kerry and Edward M. Kennedy weighed in with a press release last month, ruffling feathers at Northeast by accusing it of "depleting" and "neglecting" Addison Gilbert.

But most of all, residents say they worry that trimming emergency services will cost lives. During two recent weeks of repairs to the drawbridge, police say, accidents twice blocked the Route 128 bridge, the only other link to the mainland.

Pauline Pike, Northeast's vice president for business development and marketing, says the nonprofit organization has heard residents' concerns but must make pragmatic decisions about what services are sustainable.

In order to cut back emergency surgery and still keep an emergency room open, Northeast would need special state permission. Also, like all hospitals aiming to cut essential services, it would have to explain in public hearings how those services will be provided elsewhere. Under current law, the state cannot force hospitals to keep services open.

The idea behind Addison Gilbert's merger was to protect less profitable services by sharing overhead, said Wedmore, the Rockport internist who pushed for the merger. In that spirit, he said, $21.5 million of Addison Gilbert's investments, much of it drawn from local donations, went to Northeast, to be spread throughout the system.

Northeast is now spending $50 million on an upgrade at Beverly Hospital, though hospital officials note they are not using funds explicitly set aside for Cape Ann. Wedmore calls the project a shortsighted attempt to draw Cape Ann dwellers, who make up 22 percent of Northeast's patients, to that site. Northeast counters that it has invested $16 million in Addison Gilbert while losing money there, projecting losses between $500,000 and $713,000 for fiscal 2003.

Both sides are struggling to set aside years of suspicion and acrimony. Cape Ann officials and doctors recently vowed to help Northeast to find ways to stem the losses without ending the hospital's 24-seven emergency-surgery capability. Pike of Northeast would not commit to that, but said she is "optimistic" that the emergency room will stay open.

Anne Barnard can be reached at abarnard@globe.com.