‘Who’s going to take care of these people?’

https://www.washingtonpost.com/news/national/wp/2019/05/11/feature/whos-going-to-take-care-of-these-people/?utm_campaign=Issue:%202019-05-13%20Healthcare%20Dive%20%5Bissue:20860%5D&utm_medium=email&utm_source=Sailthru&utm_term=.32a0834177a0

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The hospital had already transferred out most of its patients and lost half its staff when the CEO called a meeting to take inventory of what was left. Employees crammed into Tina Steele’s office at Fairfax Community Hospital, where the air conditioning was no longer working and the computer software had just been shut off for nonpayment.

“I want to start with good news,” Steele said, and she told them a food bank would make deliveries to the hospital and Dollar General would donate office supplies.

“So how desperate are we?” one employee asked. “How much money do we have in the bank?”

“Somewhere around $12,000,” Steele said.

“And how long will that last us?”

“Under normal circumstances?” Steele asked. She looked down at a chart on her desk and ran calculations in her head. “Probably a few hours,” she said. “Maybe a day at most.”

The staff had been fending off closure hour by hour for the past several months, ever since debt for the 15-bed hospital surpassed $1 million and its outside ownership group entered into bankruptcy, beginning a crisis in Fairfax that is becoming familiar across much of rural America. More than 100 of the country’s remote hospitals have gone broke and then closed in the past decade, turning some of the most impoverished parts of the United States into what experts now call “health-hazard zones,” and Fairfax was on the verge of becoming the latest. The emergency room was down to its final four tanks of oxygen. The nursing staff was out of basic supplies such as snakebite antivenin and strep tests. Hospital employees had not received paychecks for the past 11 weeks and counting.

The only reason the hospital had been able to stay open at all was that about 30 employees continued showing up to work without pay, increasing their hours to fill empty shifts and essentially donating time to the hospital, understanding what was at stake. Some of them had been born or had given birth at Fairfax Community. Several others had been stabilized and treated in the emergency room after heart attacks or accidents. There was no other hospital within 30 miles of two-lane roads and prairie in sprawling Osage County, which meant Fairfax Community was the only lifeline in a part of the country that increasingly needed rescuing.

“If we aren’t open, where do these people go?” asked a physician assistant, thinking about the dozens of patients he treated each month in the ER, including some in critical condition after drug overdoses, falls from horses, oil field disasters or car crashes.

“They’ll go to the cemetery,” another employee said. “If we’re not here, these people don’t have time. They’ll die along with this hospital.”

“We have no supplies,” Steele said. “We have nothing. How much longer can we provide quality care?”

 

 

 

 

 

 

As emergencies rise across rural America, a hospital fights for its lifeAs emergencies rise across rural America, a hospital fights for its life

 

12 latest hospital bankruptcies

https://www.beckershospitalreview.com/finance/12-latest-hospital-bankruptcies-041019.html

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From reimbursement landscape challenges to dwindling patient volumes, many factors lead hospitals to file for bankruptcy.

Here are 12 hospitals that filed for bankruptcy since Jan. 1, beginning with the most recent:

1. De Queen (Ark.) Medical Center filed for Chapter 11 bankruptcy on April 3. The hospital, owned by an affiliate of Kansas City, Mo.-based EmpowerHMS, entered bankruptcy after facing financial challenges for months. Electricity was temporarily shut off in some parts of the hospital in February due to nonpayment, and the hospital subsequently stopped providing patient care.

2. Prague (Okla.) Community Hospital, owned by an affiliate of EmpowerHMS, entered Chapter 11 bankruptcy on March 21. A judge allowed a new company to take over management of Prague Community Hospital in early March after the hospital experienced payroll issues and lacked funds for supplies.

3. I-70 Community Hospital in Sweet Springs, Mo., filed for Chapter 11 bankruptcy on March 21. The bankruptcy filing came after CMS ended its provider agreement with the hospital, which voluntarily suspended its license for 90 days on Feb. 15. I-70 Community Hospital is owned by an affiliate of EmpowerHMS.

4. Haskell County Community Hospital in Stigler, Okla., filed for Chapter 11 bankruptcy on March 17. The hospital, owned by an affiliate of EmpowerHMS, entered bankruptcy with less than $50,000 in assets and at least $1 million in liabilities.

5. Drumright (Okla.) Regional Hospital, owned by an affiliate of EmpowerHMS, filed for Chapter 11 bankruptcy on March 17. The hospital entered bankruptcy with less than $50,000 in assets and upward of $10 million in estimated liabilities.

6. Oswego (Kan.) Community Hospital entered Chapter 11 bankruptcy on March 17. The bankruptcy filing came after the hospital, owned by an affiliate of EmpowerHMS, abruptly closed Feb. 14.

7. Fairfax (Okla.) Community Hospital, owned by an affiliate of EmpowerHMS, filed for Chapter 11 bankruptcy March 17. The hospital entered bankruptcy with less than $50,000 in assets and at least $1 million in liabilities.

8. Horton (Kan.) Community Hospital entered Chapter 11 bankruptcy March 14, just two days after it closed. In its bankruptcy petition, the hospital said it has less than $50,000 in assets and liabilities of between $1 million and $10 million. Horton Community Hospital is owned by an affiliate of EmpowerHMS.

9. Hillsboro (Kan.) Community Hospital, owned by an affiliate of EmpowerHMS, filed for Chapter 11 bankruptcy on March 13. According to documents filed in the bankruptcy case, the hospital has at least $10 million in assets and at least $10 million in liabilities. The hospital owes more than $334,000 in real estate taxes, making the Marion County (Kan.) Treasurer the unsecured creditor with the largest claim against the hospital.

10. Lauderdale Community Hospital in Ripley, Tenn., filed for Chapter 11 bankruptcy on March 8. The hospital, owned by an affiliate of EmpowerHMS, has faced financial challenges for months, and a federal judge appointed a receiver to oversee the hospital’s finances in February.

11. Washington County Hospital in Plymouth, N.C., entered bankruptcy in February after creditors filed an involuntary Chapter 7 bankruptcy petition. The hospital, owned by an affiliate of EmpowerHMS, missed payroll Feb. 8 and suspended all medical services Feb. 14.

12. Penobscot Valley Hospital, a 25-bed critical access hospital in Lincoln, Maine, filed for Chapter 11 bankruptcy Jan. 29. “We have made tremendous strides over the last three years in bringing our operational costs in line with revenue,” Hospital CEO Crystal Landry said in a press release. “Legacy debt is the issue here, and Chapter 11 allows us to restructure that debt so we can keep our doors open and ensure that our community continues to have a hospital close to home.”

 

 

 

Private equity-owned hospital chain files for bankruptcy

https://www.beckershospitalreview.com/finance/private-equity-owned-hospital-chain-files-for-bankruptcy.html

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New LifeCare Hospitals, a long-term acute care hospital operator based in Plano, Texas, filed for Chapter 11 bankruptcy protection May 6, according to The Wall Street Journal.

The company, owned mostly by affiliates of Blue Mountain Capital, Monarch Alternative Capital and Twin Haven Special Opportunities Fund, cited declining reimbursement due to Medicare changes as the reason for the bankruptcy filing.

Prior to entering bankruptcy, New LifeCare, which operates 17 facilities in nine states, closed some hospitals and took other steps to cut costs.

New LifeCare is in discussions with potential buyers, and CEO James Murray expects the company to be auctioned through the bankruptcy process later this year, according to The Wall Street Journal, which cited bankruptcy court documents.

 

 

 

Washington health system files for bankruptcy, cites issues with revenue cycle vendor

https://www.beckershospitalreview.com/finance/washington-health-system-files-for-bankruptcy-cites-issues-with-revenue-cycle-vendor.html?origin=cfoe&utm_source=cfoe

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Astria Health, a three-hospital health system based in Sunnyside, Wash., filed for Chapter 11 bankruptcy protection on May 6.

Astria plans to use the bankruptcy process to restructure its finances, enter into a plan of reorganization with its creditors and replace its billing company, according to TV station KIMA.

In a press release issued May 6, the health system said it is facing a significant shortfall in cash flow due to issues with the company it contracted with to manage its billing in August 2018. Astria said the unidentified company failed to process a significant number of accounts receivable, leading to a backlog of unpaid claims, according to the Yakima Herald-Republic.

“Although hospital leadership has actively managed the supply chain to ensure necessary supplies for patient care, this delay in cash collections has now become severe enough to potentially disrupt the organization’s ability to pay for crucial items in a timely matter,” Astria Health wrote in its news release, according to the Yakima Herald-Republic.

Astria said it has secured debtor in possession financing and the bankruptcy filing will not affect operations at its hospitals or clinics. They will remain open as the health system moves through the bankruptcy process.

“As one of the largest healthcare providers and employers in the Yakima Valley, we believe this step was necessary in order to protect the Valley’s hospitals and its local economies,” Astria Health President CEO John Gallagher told KIMA. “We believe it will protect and sustain the three hospitals for the future.”

Astria aims to emerge from bankruptcy by the end of 2019.

 

 

8 hospitals closed so far this year — here’s why

https://www.beckershospitalreview.com/finance/8-hospitals-closed-so-far-this-year-here-s-why.html?origin=cfoe&utm_source=cfoe

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From reimbursement landscape challenges to dwindling patient volumes, many factors lead hospitals to close.

Here are the factors that led eight hospitals to close so far this year:

1. Belmont Community Hospital, a 99-bed hospital in Bellaire, Ohio, closed April 5. Hospital officials cited a decline in patient volume as the reason for the closure. “Utilization of BCH has continued to decline despite efforts to offer varying services at the facility,” the hospital said in a press release. “The decline has place[d] a financial strain on the BCH that cannot be sustained in the long term.”

2. Kentuckiana Medical Center in Clarksville, Ind., closed April 5. The hospital, which opened in 2009, faced financial losses for years and previously filed for Chapter 11 bankruptcy, according to the Louisville Courier Journal.

3. Horton (Kan.) Community Hospital closed March 12. The 25-bed critical access hospital, owned by Kansas City, Mo.-based EmpowerHMS, shut down after struggling to pay utilities and missing payroll for several weeks. The hospital entered Chapter 11 bankruptcy on March 14.

4. Georgiana (Ala.) Medical Center closed March 8. Ivy Creek Healthcare in Georgiana, which owns the hospital, cited growing costs and cuts to reimbursement as the reasons for the closure.

5. Cumberland River Hospital in Celina, Tenn., closed March 1. In January, officials announcedthat the hospital was shutting down due to financial challenges. They said Cumberland River Hospital had experienced significant losses in recent years due to declining reimbursements and lower patient volumes.

6. Harrisburg, Pa.-based UPMC Pinnacle closed its hospital in Lancaster, Pa., on Feb. 28. The health system announced plans in December to close UPMC Pinnacle Lancaster and transition inpatient services to another one of its hospitals located about 7 miles away. In a Feb. 15 news release, UPMC Pinnacle President and CEO Philip Guarneschelli said consolidating inpatient services on one campus would make care more convenient for patients.

7. Oswego (Kan.) Community Hospital and its two affiliated clinics closed Feb. 14. A statement from the board announcing the closure said the hospital, owned by Kansas City, Mo.-based EmpowerHMS, wasn’t bringing in enough revenue to cover payroll and other expenses. After the abrupt closure, the hospital entered Chapter 11 bankruptcy on March 17.

8. Washington County Hospital in Plymouth, N.C., closed Feb. 14 after missing payroll on Feb. 8. The critical access hospital is now working its way through the Chapter 7 bankruptcy process. The hospital is one of several facilities owned by Kansas City, Mo.-based EmpowerHMS that has entered bankruptcy or closed in recent months. The Washington County Board of Commissioners is working with state and federal agencies to investigate the hospital’s financial and operational issues and working to restore medical services as the hospital, according to a Feb. 19 public service announcement on Washington County’s website.

 

 

4 hospitals file for bankruptcy in Oklahoma, Kansas

https://www.beckershospitalreview.com/finance/4-hospitals-file-for-bankruptcy-in-oklahoma-kansas.html?origin=rcme&utm_source=rcme

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Four hospitals in Oklahoma and Kansas, all owned by affiliates of EmpowerHMS, filed for Chapter 11 bankruptcy on March 17.

Three of the four hospitals that filed for bankruptcy are in Oklahoma. According to the bankruptcy petitions for Fairfax (Okla.) Community Hospital, Drumright (Okla.) Regional Hospital and Haskell County Community Hospital in Stigler, each hospital entered bankruptcy with less than $50,000 in assets and at least $1 million in liabilities. Drumright Regional has upward of $10 million in estimated liabilities.

Oswego (Kan.) Community Hospital, which abruptly closed Feb. 14, also entered bankruptcy on March 17. It is the third hospital in Kansas owned by Kansas City, Mo.-based EmpowerHMS that has filed for bankruptcy in recent weeks. Hillsboro (Kan.) Community Hospital and Horton (Kan.) Community Hospital entered Chapter 11 bankruptcy earlier this month.

Two other hospitals owned by EmpowerHMS — Lauderdale Community Hospital in Ripley, Tenn., and Washington County Hospital in Plymouth, N.C. — have entered bankruptcy since late February.

 

2 California hospitals face closure if sale delayed

https://www.beckershospitalreview.com/finance/2-california-hospitals-face-closure-if-sale-delayed.html?origin=cfoe&utm_source=cfoe

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Santa Clara County (Calif.) officials criticized California Attorney General Xavier Becerra at a press conference Jan. 24 for trying to block the county’s purchase of two bankrupt hospitals, according to The Mercury News.

In December, the bankruptcy court approved Santa Clara County’s $235 million offer to buy O’Connor Hospital in San Jose and St. Louise Regional Hospital in Gilroy from El Segundo, Calif.-based Verity Health, which entered Chapter 11 bankruptcy in August. Mr. Becerra appealed the bankruptcy court’s approval of the sale earlier this month, putting the deal in jeopardy.

Mr. Becerra is seeking to halt the sale because Santa Clara County has not agreed to conditions put in place in 2015 when private hedge fund Blue Mountain Capital acquired six hospitals owned by Los Altos, Calif.-based Daughters of Charity Health System. The deal and name change to Verity were approved, subject to several conditions.

“In this case, we have the responsibility to ensure any transfer of the hospital maintains previously imposed conditions,” Mr. Becerra’s office said in an emailed statement to The Mercury News. “The conditions include the requirement to have an emergency room, inpatient facility beds, intensive care services, and NICU. The Attorney General is fighting to ensure these conditions are enforced.”

At the Jan. 24 press conference, Santa Clara County CEO Jeff Smith, MD, said Mr. Becerra cares more about maintaining “power and control” over regulations than local residents’ access to public hospitals, according to the report.

A bankruptcy court hearing on Mr. Becerra’s request to halt the sale of the hospitals is set for Jan. 30. Dr. Smith said the outcome of the hearing could determine whether the hospitals shut down.

“If that stay is granted, that will delay the process … and it is highly likely those hospitals will close,” he said, according to The Mercury News.

O’Connor Hospital and St. Louise Regional Hospital are two of the six hospitals Verity operated when it filed for bankruptcy protection. On Jan. 18, Verity announced it had received a $610 million offer for the other four hospitals.

 

 

Hospital bankruptcies continue to skyrocket: 3 things to know

https://www.beckershospitalreview.com/finance/hospital-bankruptcies-continue-to-skyrocket-3-things-to-know.html?origin=ceoe&utm_source=ceoe

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More than 20 hospitals have filed for Chapter 11 bankruptcy since 2016, according to an Oct. 30 report from the law firm Polsinelli.

The Polsinelli-TrBK Distress Indices Report details how healthcare trends have affected the U.S. economy. Researchers determined that while the economy, specifically Chapter 11 bankruptcies across all industries and the real estate industry, have remained stable during the past several quarters, healthcare exhibited consistently high levels of distress during eight of the last 11 quarters.

To compile the report, researchers use Chapter 11 bankruptcy data as a proxy for measuring financial distress in the overall U.S. economy and breakdowns of distress specifically in real estate and healthcare.

Here are three things to know from the report:

1. Southwestern states have been hit the hardest by healthcare bankruptcy filings. For example, increased competition, insurance payer pressure and overexpansion contributed to Neighbors Legacy Holdings in Houston, a freestanding emergency facility operator with more than 30 facilities, to file for bankruptcy earlier this year.

2. While general Chapter 11 bankruptcies have decreased 53 percent from the 2010 benchmark, healthcare industry distress increased by 305 percent during the same period.

3. The law firm’s Health Care Services Distress Research Index was 405 for the third quarter of 2018, an increase of 65 points from the second quarter of 2018. The third-quarter figures represent a year-over-year increase of 82 points.

To learn more, click here.

California health system’s bankruptcy challenged by employee union

https://www.beckershospitalreview.com/finance/california-health-system-s-bankruptcy-challenged-by-employee-union.html

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El Segundo, Calif.-based Verity Health System, the nonprofit operator of six hospitals, filed for bankruptcy protection Aug. 31. The bankruptcy proceedings are being challenged by SEIU-UHW, a union representing 2,000 workers at Verity Health hospitals.

The hospitals were originally owned by Los Altos, Calif.-based Daughters of Charity Health System. The financially troubled system began seeking a buyer for the hospitals in 2014, and Integrity Healthcare, a company created by BlueMountain Capital Managementtook over the facilities in 2015 and renamed them Verity Health System. Billionaire Patrick Soon-Shiong, MD, bought Integrity in July 2017, according to the Los Angeles Times.

Dave Regan, president of SEIU-UHW, expressed concern about Verity entering bankruptcy.

“When Verity bought these hospitals from Daughters of Charity four years ago, they made promises to these communities that they would not lose access to the care they needed,” he said in a press release. “Now it looks like Verity’s billionaire owner wants to go back on those commitments.”

In the bankruptcy filing, Verity seeks court permission to sell the hospitals from any liens and encumbrances. SEIU-UHW contends this shows Verity’s “intent to nullify their obligations both to their union collective bargaining agreements and the conditions of sale imposed by former Attorney General Kamala Harris when Verity purchased the hospitals.”

By challenging the bankruptcy filing, SEIU-UHW intends to ensure the hospitals are kept open and continue to meet pension obligations and maintain current services and levels of employment.

 

 

California’s Verity system files bankruptcy, faces $175M in annual losses

https://www.healthcaredive.com/news/californias-verity-system-files-bankruptcy-faces-175m-in-annual-losses/531524/

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Dive Brief:

California-based Verity Health System filed for Chapter 11 bankruptcy late last week. The nonprofit operator blamed ongoing losses and debt, along with aging infrastructure and an inability to renegotiate contracts, for its tenuous operating position. The system secured debtor financing of up to $185 million, and plans to keep its six hospitals open during the bankruptcy proceedings.

The Friday filing follows a statement in July noting that Verity was exploring different avenues to pull the system out of its slump, including the potential sale of some or all of its hospitals and other facilities.

Last year, billionaire investor and entrepreneur Patrick Soon-Shiong purchased Integrity Healthcare, the company that manages Verity, with the intent to revitalize the system and upgrade its technology while continuing to serve lower-income populations. Yet, “after years of investment to assist in improving cash flow and operations, Verity’s losses continue to amount to approximately $175 million annually on a cash flow basis,” and more than $1 billion overall, Verity CEO Richard Adcock said in the company’s bankruptcy announcement.

Dive Insight:

The company has been struggling for a while and can “no longer swim against the tide” of its operating reality, which includes a legacy burden of more than a billion dollars of bond debt and unfunded pension liabilities, an inability to renegotiate burdensome contracts, the continuing need for significant capital expenditures for seismic obligations and aging infrastructure,” Adcock said.

Verity’s problems come in an caustic environment for U.S. hospitals, many of which are suffering from costs that are rising faster than revenues. Credit rating agency Moody’s warned just last week that the nonprofit provider industry was on an “unsustainable path.”

A recent MorganStanley analysis found that about 18% of American hospitals were at risk of closure or performing weakly, a high figure in historical context. Only 2.5% of hospitals closed over the past five years, yet Moody’s estimated 8% of the 6,000 hospitals studied were apt to close their doors. Additionally, more nonprofit hospitals suffered credit downgrades in 2017, and Moody’s revised its outlook for the hospital sector from stable to negative.

But it’s not only industry pressure that’s causing Verity to fold. Another burden is the management of Soon-Shiong, who’s been hit with backlash for the way he runs his businesses and methods.

The South Africa-born surgeon and investor purchased the hospitals in July 2017, following a 2015 acquisition by New York hedge fund BlueMountain Capital Management. The system had struggled financially for years and needed the influx of cash both buys gave it.

“There’s going to be a huge capital need,” Soon-Shiong said at the time. “There’s been little investment because these hospitals could not afford it.” He said he planned to bring in new equipment and technology, along with expanded oncology, transplant, cardiology and orthopaedic services. Through his company NantWorks, Soon-Shiong funneled more than $300 million into the system within the year, but Verity’s losses continued to mount.

At the time of the acquisition, Soon-Shiong, who has founded and sold multiple biotech companies and now owns a stake in the Los Angeles Times and L.A. Lakers, heralded the charity work done by the hospital, but said the restructuring was “inevitable” due to years of underinvestment.
Touted plans to revitalize the flagging hospital system didn’t pan out, and some of Soon-Shiong’s critics say it was intentional.

“It has become crystal clear by the bankruptcy announcement that he virtually had no intention of keeping these hospitals open and to continue to serve the poor,” San Mateo County Supervisor David Canepa told news outlets following the announcement.

Labor unions are similarly displeased. SEIU-UHW representative David Miller reportedly said “there were other paths out of this” and that it’s a “very destructive approach,” as the bankruptcy filing could put employee pensions at risk.

But in the press release, Adcock said the bankruptcy filing was the best thing for all involved, and told Reuters that the 1,650-bed, 6,000-employee company has already received interest from more than 100 parties. Potential suitors include large national operators. Any sales will now be supervised by the bankruptcy court and approved by regulators