Hospital Losing Millions Annually
With estimated debts totaling $50 million, Doctors Hospital of Michigan filed for Chapter 11 bankruptcy protection on July 24, 2015. The hospital is located in Pontiac, Michigan, 20 miles southeast of Detroit. In spite of the bankruptcy filing, Doctors Hospital will continue to operate throughout the bankruptcy process.
Doctors Hospital of Michigan is owned by a group of 42 doctors, some of which are still active in their profession. It is an independent hospital, one of the few left of its kind in the state of Michigan.
The hospital was suffering from immense revenue loss. This, in addition to potential Medicare dollar cuts based on below par grades in maintaining patient rights, infection control and quality assurance, ultimately led to the filing for Chapter 11.
Not the Hospital’s First Bankruptcy
This is not the first time that Doctors Hospital of Michigan has filed for bankruptcy protection. In 2008, when the hospital was under the name of North Oakland Medical Center, it filed for bankruptcy protection due to financial struggles.
Doctors Hospital has been in existence for over 105 years, serving the local community of Pontiac and its surrounding areas. It was known originally as Pontiac General Hospital, and had its name changed to North Oakland Medical Center, which it carried until 2008, when the hospital was sold following the bankruptcy filing to the group of physicians that currently own the hospital today.
Hospital Tried to Cut Costs
Within the past several years, the board at the hospital were well aware of where the financial situation was headed. As a result, many decisions were put into place in an attempt to achieve financial stability.
In October 2013, the Doctors Hospital shut down their emergency care department. In April 2015, the hospital laid off 40 workers. The hospital has between 200 and 300 employees working at the healthcare facility on any given day.
Even after these plans were implemented, the previous debts incurred before the purchase by the group of doctors, combined with years of revenue loss, forced the hospital to choose a new method in dealing with their financial woes. As a result the board at Doctors Hospital decided to file for bankruptcy protection.
Plan to Reorganize Hospital’s Finances
By filing for Chapter 11 bankruptcy protection, Doctors Hospital will enable itself to reorganize debt with the hope of getting financially stable in due time. The hospital is currently entertaining several ideas as to how to ensure the right move forward.
“There’s a number of potentials here,” said Max Newman, attorney from Butzel Long law offices, the hospital’s representative through the bankruptcy proceedings. “It could be purchased, it could merge with somebody. But at this point, the effort is going to be primarily to keep it running as a standalone entity.”
Hospital Will remain Open
“Doctors Hospital itself remains open,” said hospital CEO John Ponczocha. “There are no plans to close.”
The hospital operates a facility that contains approximately 70 beds. The hospital will continue to offer its services to all its patients. These services include surgical procedures, nursing care and various forms of rehabilitation.