Westerly - Recovering Tuesday in her hospital room after pneumonia sent her to the emergency department last week, Marion Ruggles said she's grateful her hometown hospital survived near closure and is still there when she needs it.

"I have a lot of health issues, and they know me here," the Westerly resident said. "It's a relief not to have to go to a different hospital in a different county, where they don't know me."

A few doors away, patient Frank Rutan said the hospital seems "more efficient" than the last time he was hospitalized a few months ago, when the 91-year-old institution was newly out of receivership and Lawrence + Memorial Hospital in New London had just become the owner. He noted that one of the procedures he had both times was noticeably easier this time, thanks to some new equipment.

"It's shaping up," the 83-year-old Westerly resident said.

Seven months after The Westerly Hospital was acquired by L+M, after a long financial slide that ended in receivership and the court-approved sale, the smallest of the region's three hospitals appears to be on more stable footing. While L+M had projected that The Westerly Hospital would continue running in the red for three years, savings through staff reductions, efficiencies and increasing patient volumes have put it back in the black for the first time in recent memory.

Westerly Hospital ended fiscal 2013 on Sept. 30 with an operating margin of $680,000, meaning revenues were 2 percent higher than expenses. Before the acquisition, 45 staff members had been laid off, and afterward, administrative costs were slashed when L+M managers were put in charge of both hospitals.

At 4 p.m. today at the Mystic Marriott, the status of Westerly Hospital will be one of the highlights of L+M's annual meeting. Taking place for the first time outside L+M, the meeting location is intended to be more central to members of both hospitals' boards and the newly chosen representatives from Westerly on the L+M Corp.'s Board of Corporators.

"I'm pleased that L+M is living up to its obligations, both in terms of capital improvements and physician recruitment at Westerly Hospital," said Tom Liguori, a member of the Westerly Hospital Residents Committee that oversaw the receivership process and now a member of Westerly's reconstituted board of directors. He referred to four new doctors at Westerly and two more scheduled to start there in the next few months. Capital improvements include repaving the parking lot to fix long-standing drainage problems, repairing the air conditioning system and purchasing new digital breast and cardiac ultrasound equipment.

"There were a number of deferred maintenance issues that needed to be addressed," he said. "They've honored those commitments and given the board constant updates and, hopefully, restored consumer confidence."

'A good move'

Patient Eleanor Ornbery said Tuesday that she had some uncertainty about coming to the hospital during the receivership, especially after the layoffs and the closing of the labor and delivery department. Now, however, she feels confident in the care being provided there.

"It was a good move that L+M took over," said the 75-year-old Westerly resident. "I have complete faith in everyone here."

During a tour of the hospital, Dr. Christopher Lehrach, vice president and chief transformation officer at L+M and head administrator at Westerly Hospital, stopped to chat with nurses, doctors and other staff about the transition, hearing responses that ranged from "a lot more confidence in the future" to "a lot less anxiety" to "awesome."

"When I come in here and see 60 patients here and being well cared for, I say, 'We're going to be OK,'" Lehrach said. The hospital, licensed for 125 beds, is staffed on a day-to-day basis for 60 patients, he said, leaving about one-quarter of the 200,000 square feet unused and ripe for repurposing.

"It's a great asset for L+M to have, when it's bursting at the seams in New London," he said, pausing at an empty wing. The administration, he said, is looking for creative ways to use the space that would help support maintaining basic medical-surgical services in Westerly, including establishing a regional cosmetic surgery center for a physician looking to centralize his bi-state practice.

"We're in fairly advanced discussions" with the physician, Lehrach said, whom he declined to name.

In the emergency department, volumes at Westerly Hospital were up 2 percent for the fiscal year that ended Sept. 30, compared to the previous year, L+M spokesman Mike O'Farrell said. After declines during the yearlong receivership, inpatient and outpatient numbers have stabilized there, he added. He cautioned, however, that Westerly Hospital is facing the same financial pressures as other hospitals.

Jackie Desmond, president of the union that represents 200 nurses and technicians at the hospital, said staff is working well with the new management. One significant change since the takeover is that nurses and technicians are now required to be more flexible about the number of hours they work each week. Staff is pared back when patient numbers are down and units consolidated, resulting in more fluctuation in workers' weekly pay.

"They can be thankful that the staff are willing to work with them to increase and decrease staffing levels," she said. "The staff should be proud of everything they've done."

There is a cooperative atmosphere between the new management and staff, said Judy Lawrence, president of the 200-member union that represents service and maintenance workers.

"The management has listened to what we've had to say, and we've worked with human resources to resolve any issues," she said. "There have been some improvements in staffing levels in some areas, like adding hours for the CNAs (certified nursing assistants)."

Both union leaders, however, said labor troubles at the main L+M Hospital in New London have been a concern at Westerly Hospital. Workers at Westerly are represented by a different union than the nurses and technicians who were part of a strike, then locked out, at L+M in December, but were "generally supportive of the members there," Lawrence said. Contracts for the two bargaining units at Westerly will expire in June.

"Everyone here was watching it very carefully," Lawrence said of the strike and lockout. "It definitely brought to mind what could happen down the road here. There's nobody more aware than we are that the tide could change here very quickly, but for now we're cautiously optimistic."

j.benson@theday.com