Hospital to Become Part Of The Saint Francis Care System
After lengthy talks with creditors, government officials and financial advisers, Johnson Memorial Medical Center filed for Chapter 11 bankruptcy protection in January 2015.
The small hospital, located in Stafford Springs, Connecticut, and all of its facilities, will be acquired by their Hartford based parent company, Saint Francis Care.
The rural medical center has 95 beds and approximately 460 employees.
Some of the other facilities that are planned to be included in the transfer to Saint Francis are Evergreen Health Care Center, a short and long term nursing care facility, and Home & Community Health Services which provides hospice care.
Johnson Memorial Has Tens In Millions In Debts
In 2013, the Johnson Memorial Medical Center incurred a loss of over $5 million, in spite of having an annual revenue of close to $90 million.
The medical center’s debts have nearly totaled $30 million, with creditors ranging from local banks and hospitals, to medical technology companies.
Not The Hospital’s First Bankruptcy
In 2010, Johnson Memorial Medical Center came out of an earlier bankruptcy, with a financial situation that was significantly more optimistic than earlier in that year. In spite of the debts that were restructured then, Johnson Memorial could not maintain the necessary profit margins required to avoid the current filing of Chapter 11 bankruptcy protection.
In 2012, Saint Francis Care teamed up with Johnson Memorial in an attempt to prevent the then worsening fiscal state of affairs. The affiliation agreement helped to create more efficient operation within the hospital.
Included within the agreement was the stipulation that in the event of Johnson Memorial’s financial situation declining, Saint Francis would absorb the hospital into their already growing health care facility chain.
“The terms of the transaction include a pre-negotiated debt restructuring with our lender, who supports this process,” said Amy DuBois-Zwaan, the director of business development at Johnson Memorial Medical Center.
“The hospital is using the bankruptcy process to facilitate the sale to Saint Francis Care under the terms which have already been agreed upon by all parties.”
Johnson Memorial & Saint Francis Look Forward To A Bright Future
“Our current affiliation agreement provides the framework necessary to ensure the continued delivery of quality care to the local community,” said Saint Francis Care CEO and President Christopher Dadlez. “It will also sustain a major economic resource for the region.”
The Johnson Memorial Board of Directors appointed the CEO of the hospital, Stuart E. Rosenberg, to direct the bankruptcy process. He said, “Throughout our working affiliation, we at Johnson Memorial and Saint Francis Care have been on the path of creating a long-term partnership.”
Rosenberg added, “One of the achieved goals from our partnership with Saint Francis has been the ability to continue our mission, as it has been for the last 102 years, to provide quality healthcare in the community.”