Will 2015 Hospital Bankruptcies outpace 2014?
It seems that almost every year, hospitals across the country are filing for bankruptcy. While the reasons are often the same, in 2015, two reasons in specific are being mentioned: increased prices for medical care and smaller health networks.
In 2013, the Affordable Care Act (ACA) was passed. Also known as Obamacare, the Affordable Care Act set out to cover the millions of Americans without health care. The affect however has not yet been fully realized and it’s too early to know how it will affect the bottom line of hospitals. Patients on the other hand, have learned that despite health insurance, medical bills continue to rise for various reasons. Ultimately, when hospitals find too many of their patients in situations where they can’t pay for services rendered, it can likely lead to hospitals filing bankruptcy themselves.
As a frame of reference, in 2014, a total of 16 hospitals filed for bankruptcy across the country, an increase over the previous year. In 2013, 11 hospitals filed for bankruptcy.
For a complete list of hospitals that filed for bankruptcy in 2013 or 2014, click here: 2013 Hospital Bankruptcies, 2014 Hospital Bankruptcies
Turning to 2015, here is a list of hospitals, shown alphabetically, that have filed for bankruptcy, with a short explanation and some background. To learn more, click on the full article links below.
1) Doctors Hospital of Michigan
Following years of revenue losses, Doctors Hospital of Michigan, located in Pontiac, Michigan, filed for Chapter 11 bankruptcy protection on July 24, 2015. The hospital is reported to have had up to $50 million in debt to its creditors. By filing Chapter 11 bankruptcy protection, the hospital enabled itself to reorganize its debt, and steady its financial instability. The hospital is owned by a private group of doctors and is a for-profit organization. This group of doctors had purchased the hospital in 2008 after the hospital, then known as North Oakland Medical Center, filed for bankruptcy protection. It’s one of the few remaining independent hospitals in Michigan. The hospital operates a 70 bed healthcare facility, and employs upwards of 200 employees. The hospital will continue to operate throughout the bankruptcy proceedings.
For the full story click here: Doctors Hospital of Michigan Bankruptcy
2) El Paso Children’s Hospital
Amid many disagreements with local officials and their managing partner, El Paso children;’s Hospital of El Paso, Texas filed for Chapter 11 bankruptcy protection on May 19, 2015. El Paso Children’s Hospital was being managed by University Medical Center, and UMC claimed they were owed upwards of $90 million. For many months before the decision to file for bankruptcy, EPCH and UMC were negotiating a deal that would allow the former to pay back their debt while still operating the hospital. After EPCH left the negotiating table, officials at UMC were very upset, and thought it was the wrong decision for ECPH. ECPH felt it was the best move forward for them, because it would lead to independent operation, a state in which they’d prefer to be.
For the full story click here: El Paso Children’s Hospital Bankruptcy
3) Hollywood Pavillion Hospital
Following several years of annual revenue losses over $2 million, Hollywood Pavillion Hospital filed for bankruptcy on April 8, 2015. Hollywood Pavilion Hospital, located in Hollywood, Florida, is associated with Hollywood Hills Rehabilitation Center as well as High Ridge Management Group. Debts at Hollwood Pavilion were close to $15 million. Two years prior to filing for bankruptcy, the CEO of the hospital, Karen Kallen-Zury, was sentenced to 25 years in prison for insurance fraud. She was also handed a penalty of nearly $40 million. Hollywood Pavilion Hospital officials decided to file a motion to seek being sold at a bankruptcy auction only several days after the bankruptcy filing. Offers to buy the hospital were already made, with one bid put forward at $17 million. This would erase all of the hospital’s debt. The hospital is managed by Larkin Community Hospital, also located in South Florida, and they are owed more than any other creditor of Hollywood Pavilion at over $14 million. The large, nearly 60,000 square foot facility is comprised of a 50 bed hospital along with a 152 bed nursing and rehabilitation center.
For the full story click here: Hollywood Pavillion Hospital Bankruptcy
4) Johnson Memorial Hospital
With tens of millions of dollars in debt, Johnson Memorial Hospital in Stafford Springs, Connecticut filed for bankruptcy on January 14, 2015. The 95 bed hospital was acquired by Saint Francis Care, who has been their parent company since 2012. Johnson Memorial Hospital had filed for bankruptcy in 2010, and two years later Saint Francis joined with the small, rural hospital to try to assist them with their failing finances. Part of the original agreement with Saint Francis Care was, that if the fiscal situation at Johnson Memorial would continue to decline, Saint Francis would absorb them into their own network.
For the full story click here: Johnson Memorial Hospital Bankruptcy
5) New Horizons Medical Center
Following years of debts worth millions of dollars, New Horizons Medical Center of Owenton, Kentucky filed for Chapter 11 bankruptcy protection on May 29, 2015. This was not the first time the hospital, which serves three neighboring counties in Kentucky, had went through tough financial times. In 2001, money problems for the hospital forced the hospital to be sold to pharmacist Bernard Poe with over $5 million still in loans. Poe is currently the CEO of New Horizons Medical Center, and the hospital continues to retain $4.33 million of its original debt. Poe felt that it was enough of a reason for the hospital to file for Chapter 11 bankruptcy protection. The hospital continues to operate throughout the bankruptcy proceedings.
For the full story click here: New Horizons Medical Center Bankruptcy
6) Parkview Adventist Medical Center
Following years of decreasing patient numbers based on local competition with other local hospitals, Parkview Adventist Medical Center filed for Chapter 11 bankruptcy protection on June 16, 2015. For years, Parkview competed with nearby Mid Coast Health Services for more patients, and with a consistent dip in patient volume every year, debt amounts for Parkview made it the hospital’s situation unsustainable. Parkview Adventist Medical Center is planning a merger with Mid Coast Health Services barring approval from the courts. At that time, Mid Coast will continue the operation of most of Parkview’s services, while consolidating some of the remaining services between the two health care facilities.
For the full story click here: Parkview Adventist Medical Center Bankruptcy
7) Southern Regional Medical Center
Following consecutive years with millions of dollars in revenue loss, Southern Regional Medical Center of Riverdale, Georgia filed for Chapter 11 bankruptcy protection on July 30, 2015. The hospital has cited a high volume of uninsured patients being treated at the hospital, and the subsequent lack of reimbursement from insurance companies, as the primary reason for them filing for bankruptcy protection. The hospital gave statistics of 30% of their patients being uninsured, and $21 million dollars of care that was not paid for by the patients. Prime Healthcare Foundation, a California based hospital network has advanced a bid to purchase the 331 bed hospital, that’s located just 12 miles south of Atlanta. They have pledged to fund the hospital for a minimum of five years while maintaining full operations. The hospital will operate throughout the bankruptcy proceedings.
For the full story click here: Southern Regional Medical Center Bankruptcy
8) St. Michael’s Medical Center
Following years of financial struggle, St. Michael’s Medical Center of Newark, New Jersey filed for Chapter 11 bankruptcy protection on August 10, 2015. The hospital was awaiting a response from the state to a proposed sale of the hospital to Prime Healthcare Services, a hospital network based out of California. The state has not given the hospital a clear answer in over two and a half years. The hospital filed for bankruptcy as a result, to give themselves the ability to stay afloat and fully operational until the sale to Prime is approved. The hospital was run as a non-profit organization for the past 150 years. During the bankruptcy proceedings, the hospital will continue to run as normal, and none of the employees will lose their jobs. The hospital in recent years has received poor quality and operating ratings from review boards. This is seen as a another incentive for the hospital to sell their facilities to another company that is more capable of running the hospital in a satisfactory manner.
For the full story click here: St. Michael’s Medical Center Bankruptcy
9) University General Health System (UGHS)
University General Health System, Inc. of Houston, Texas filed for Chapter 11 bankruptcy protection on February 27, 2015. Their goal during bankruptcy proceedings is to reorganize their diverse health network, and restructure their debts. University General Health System owed over $50 million to creditors, while the company only holds $10 million in assets. Several investments and network expansions failed in the previous few years. At that point UGHS decided to downsize. That could not not stem the tide of revenue loss, and the health network then decided to file for Chapter 11 bankruptcy protection.
For the full story click here: USHG Bankruptcy
10) Victory Medical Center Landmark
With millions of dollars in debt and several lawsuits being filed against them, Victory Medical Center Landmark filed for Chapter 11 bankruptcy protection on June 15, 2015. The hospital, which is located in San Antonio, Texas, is part of a larger system of hospitals under the parent company called Victory Healthcare. The hospital claimed that the main reason for the decision to file for Chapter 11 bankruptcy protection was due to insurance companies’ failure in reimbursing at the set times. This severely hurt Victory Medical Center Landmark’s revenue, and put them in the current situation where bankruptcy was the best move for the financially struggling health care facility. Victory Healthcare is currently trying to find potential suitors who would be interested in purchasing the hospital.
For the full story click here: Victory Medical Center Landmark Bankruptcy