In a pattern that has become routine, and one that seems more dangerous than ever with an approaching pandemic, more hospital systems in the United States have filed for bankruptcy or are closing their doors. The most recent of these closures is Randolph Health in North Carolina, although hospitals in South Carolina and Ohio also made the news recently.
Randolph Health in North Carolina
“Randolph Health, a single-hospital system based in Asheboro, N.C., announced March 6 that it has filed for Chapter 11 bankruptcy. Randolph Health leaders have taken several steps in recent years to improve the health system’s financial picture, and they’ve made progress toward that goal. The health system boosted its operating margin in fiscal year 2019 and continued to see improvements in the first quarter of fiscal 2020. Entering Chapter 11 bankruptcy will allow Randolph Health to restructure its debt, which officials said is necessary to ensure the health system continues to provide care for many more years.”
“‘Restructuring our debt is something that we have been talking about for some time now, and this filing is simply the next step in a planned process to ensure the future of health care for the people of Randolph County,’ Randolph Health CEO Angela Orth said in a news release. ‘Over the past three years, we have undertaken significant efforts to strengthen financial operations, identify a long-term path forward and ultimately protect Randolph County’s health care future.'”
“Randolph Health will operate as normal throughout the bankruptcy process, which is expected to be completed this year. ‘Patients will have the same access to their health care provider and services with no interruption of care,” states the news release. “Randolph Health will continue to pay salaries and fees to physicians and employees, purchase supplies and equipment and ensure access to quality health care during this process.’ Randolph Health comprises a 145-bed hospital, a network of physician offices, outpatient rehabilitation centers, homecare services and a cancer center.”
Regional Medical Center in South Carolina
“The Regional Medical Center in Orangeburg, S.C., has less cash on hand than it needs to adhere to loan agreements it has with banks, according to The Times and Democrat. Under bank loan requirements, the hospital must have 100 days’ cash on hand. At the end of January, the hospital fell short of that requirement by two days. One day of cash on hand equals about $587,902 at the hospital, according to documents cited by The Times and Democrat.”
“The reason the days of cash on hand fell in January was due to it being a month with three pay periods, Dion Franga, MD, the hospital’s finance committee chairman, told the newspaper. RMC CFO Liza Porterfield said the hospital will speak with the banks about the issue and work with an auditing firm to see where RMC can recover more cash. The hospital has until March 31 to report its days of cash on hand to the banks. In December 2019, the hospital closed its primary care practice — a move that affected about 1,100 patients — because the practice had recorded net losses for the past two years.”
The Medical Center at Elizabeth Place in Ohio
“The Medical Center at Elizabeth Place, a 12-bed hospital owned by physicians in Dayton, Ohio, closed March 5, according to the Dayton Daily News. The closure follows years of financial problems. In January 2019, the Medical Center at Elizabeth Place lost its certification as a hospital, meaning it couldn’t bill Medicare or Medicaid for services. Sixty to 65 percent of the hospital’s patients were covered through the federal programs.”
“CMS determined MCEP didn’t meet the agency’s definition of a hospital because it sometimes lacked the minimum number of patients needed who also remained inpatients for a sufficient amount of time. Sixty people will lose their jobs because of the closure, according to the Dayton Daily News.”
Stay on Good Financial Ground
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