Elected Officials Opposed to the Decision
El Paso Children’s Hospital filed for Chapter 11 bankruptcy protection on May 19, 2015. This took place amidst severe disagreements with local lawmakers and the entities that managed the health care facility in El Paso, Texas.
University Medical Center had been managing El Paso Children’s Hospital since its opening in February 2012. UMC claims it’s owed over $90 million in unpaid rental and service fees from EPCH.
UMC Shocked by the Decision
For several months before the decision to file for bankruptcy was reached, El Paso Children’s Hospital and UMC tried negotiating a deal that would allow for the hospital to pay back their debt. Even during that time, El Paso Children’s Hospital considered bankruptcy. No deal was reached between the two partners.
“Their filing states that their board authorized bankruptcy as early as Feb. 11,” said Steve DeGroat, Board Chairman at UMC. “All this while, EPCH gave us the impression that an agreement might be acceptable to them. It seems that their intent was never to come to an agreement or to pay what they owe UMC or other creditors.”
Injustice for Taxpayers
Some elected officials have openly voiced their disapproval of El Paso Children’s choice to file for bankruptcy protection.
In an interview with the El Paso Times, County Commissioner Vince Perez said, “The reckless decision by the El Paso Children’s Hospital board is a slap in the face to all El Paso County taxpayers who have been financially supporting the Children’s Hospital for months by providing critical services to help keep the hospital open.”
Elected Officials Lament the Move to File for Bankruptcy
Many local officials felt that the decision on part of El Paso Children’s Hospital, was a poor one.
“In my view,” said County Judge Veronica Escobar. “They had an extraordinary option on the table, which was to go work with a strategic partner that was interested in their long-term growth, and that wanted them to be successful. Instead they filed bankruptcy.”
“While it’s very sad that taxpayers may have to pay the bill again,” remarked County Commissioner Carlos Leon, “It’s also sad to witness the EPCH Board of Directors risking the future of Children’s Hospital.”
Hospital Thinks it’s the Most Sustainable Option
Officials at El Paso Children’s Hospital felt confident about their decision to file for Chapter 11 bankruptcy protection, and that it was the necessary step forward to ensure the continuation of medical care for all of its patients.
“We plan to restructure our debt, our financial billings, insurance, partnerships and other components, which will allow us to start fresh from the solid foundation,” said Mark Herbers CEO of El Paso Children’s Hospital. “It is anticipated that the Children’s Hospital can emerge from this process by the end of the year.”
Bankruptcy Will Lead to Independent Operation
EPCH argues that following the bankruptcy process, which will allow the hospital to restructure its debt, the hospital will then be in the position to operate in an independent fashion without the assistance of an external company such as UMC.
The hospital will continue to run normally.
“The filing will not affect patient care,” said Herbers. “Every child will continue to be treated exactly as it has been for the last three-and-a-half years since Children’s Hospital opened.