As FierceHealthFinance readers well know, far too many hospitals are teetering on the brink financially, with bankruptcies and closures far from uncommon. However, the last few weeks have been particularly bruising, with a handful of hospitals filing bankruptcies or setting plans to liquidate since Aug. 19.
For example, one hospital at death's door financially is Hawaii Medical Center, a two-hospital system in Honolulu that filed bankruptcy when it couldn't get an extension on $5.5 million in debt. Unable to find an alternative source of financing, execs took the bankruptcy route to buy themselves some time.
Another struggling facility, Pontiac, MI-based North Oakland Medical Center, filed for bankruptcy when it failed at finding a larger merger or joint venture partner. While it succeeded at cutting costs by $24 million in the years leading up to the bankruptcy filing, revenue was still falling faster than expenses, and cash was at way too low a level. The hospital eventually defaulted on $38 million in outstanding bonds, as well. (North Oakland may yet rise again, though, if management accepts an offer from a group of more than 100 doctors who want to buy the facility.)
While it's hard to say if such was the case for these hospitals, those that end up dying typically respond the same way to financial crises--waiting and waiting until it's far too late to stanch the bleeding and they have virtually no options, consultants say. And at least one consultant, turnaround specialist Michael Lane, has found that it can be murder to get hospital boards to seek bankruptcy protection.
To learn more about these bankruptcies:
- read this Modern Healthcare piece
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