This has been the best week for the Bay State's beleaguered hospitals in nearly a decade, with Beacon Hill finally acknowledging there is a hospital crisis and Senate leaders promising a whopping $226 million in additional aid.

But the next two weeks are likely to offer sobering reminders of just why so many hospitals are desperate for money.

The state's third-largest private psychiatric facility, in Holyoke, says that its $4 million in annual losses puts it ''on the edge'' of financial disaster. Plans to auction off Charles River Hospital in Wellesley are barreling ahead, threatening to eliminate another 60 critically needed psychiatric beds.

And, while a deal to save the state's last remaining city-run hospital is making progress in Haverhill, the proposal faces enough problems that nearby hospitals are preparing to provide emergency services if it closes.

''I'll say it right out: It's a public health crisis,'' Dr. Howard Koh, commissioner of public health, said of the ongoing threats of hospital closures.

But Koh added that he is buoyed by the Senate action, which is ''much more supportive of hospitals than we've seen before.''

''I think the governor and House have put good proposals on the table,'' he said. ''Everybody is engaged in trying to meet the long-term needs of hospitals in a very serious way, and that's definitely progress.''

Massachusetts hospitals have faced huge financial difficulties for years, as rates paid by insurers fell behind their growing costs. Still, it was tough to get anyone to pay attention to what seemed like abstract economic issues. Recently the stakes have become clearer, as emergency rooms became so crowded they sometimes don't accept patients for hours at a time and as many community hospitals hovered on the edge of bankruptcy.

Hale Hospital in Haverhill is a case in point. After 114 years, the facility simply became too expensive for the city, running up debt at the rate of $750,000 a month. Essent Healthcare of Nashville tendered a bid to buy it earlier this year and has been working to meet the city's June 30 deadline.

It is clear now that it will take at least two extra months for the deal to be finalized, and several potential ''deal breakers'' remain, said Hale chief executive Carl Zack. The state's private insurers would have to increase reimbursement rates 30 percent; the site of a city-owned nursing home would have to be transferred to Essent, so it could build medical offices; and the firm would have to be satisfied that there are no other legal impediments.

But one big hurdle - securing $1.5 million to keep the hospital open through August - was overcome Thursday night, when the City Council approved the funds.

While substantial obstacles remain, Zack said, ''I remain optimistic that we're going to be able to accomplish each of them.''

W. Hudson Connery Jr., Essent's president and chief executive, also remains upbeat. ''There's still a lot of work to do,'' he said yesterday. ''But is it doable by Aug. 31? Absolutely.''

That optimism is based partly on meetings Essent held this week with state officials, as well as on the powerful legislators that Haverhill hopes can help it secure $1.5 million in state reimbursement for the extra months of hospital operations. Essent officials have promised to repay that aid if the sale goes through.

Even as he pushes ahead in talks with Essent, however, Zack has been meeting with officials from Holy Family Hospital in Methuen, Lawrence General, Anna Jaques Hospital in Newburyport, and the Lahey Clinic in Burlington to discuss a stand-alone emergency room if Hale closes as a full-service facility.

The Department of Public Health is concerned enough about Hale's future that it will hold a hearing Wednesday in Haverhill.

As bad as things are at general hospitals, they are even worse at those specializing in treatment of mental illness. The trend toward deinstitutionalization has proceeded so far, so fast, that there are not enough emergency beds left.

At Providence Hospital in Holyoke, one of the state's largest private psychiatric facilities, ''the financial viability of services is continuously in jeopardy,'' chief operating officer Robert Simpson warned this week.

Simpson is pushing the state to once again raise its Medicaid payments to the 270-bed facility, which is part of the Sisters of Providence network. Without such an increase, he said, ''it would raise the question of having to close certain services.''

In Wellesley, another private psychiatric hospital, Charles River, is due to be sold at auction June 20 unless its owners work out an agreement with Lehman Brothers, its mortgage holder.

But the two sides seemed miles apart late this week, increasing the odds that the prime 9-acre site will be sold to a developer who would close the facility, most of whose patients are poor, have illnesses like schizophrenia and substance abuse, and were referred there because they pose a risk to themselves or others.

Lehman is ''mostly interested in money,,'' said Fred Thacher, the hospital's chairman and chief executive. ''They're not interested in public welfare or social services.''

To which Gary Eisenberg, a lawyer for Lehman, responded: ''Charles River has defaulted on nearly $18 million in debt. It really isn't in a position morally, ethically, or legally to determine what's a fair return for Lehman Brothers.''

The Senate Ways and Means Committee unveiled a $226 million aid package this week that, while it does nothing for psychiatric hospitals, responds in a big way to the worries at general hospitals by including higher Medicaid payments and more money for treating the uninsured, and doubling funds for hospitals.

The House and governor have introduced slightly more modest programs, all of which represent a ''major step in recognizing that there is a health care crisis and in addressing it,'' said Ron Hollander, president of the Massachusetts Hospital Association.

Senator Richard T. Moore, Democrat of Uxbridge and chairman of the Health Care Committee, was also enthused, but added: ''We're still short of where we need to be in Medicaid relief for hospitals, and we still have not done anything for nursing homes and doctors.''

The Boston Globe

-- Anonymous, June 09, 2001