MI hospital defaults on bonds, discusses selloff

Things have gotten ugly for financial managers at North Oakland Medical Center. The 178-bed hospital, which is based in Pontiac, MI, defaulted on $38.5 million in bonds issued by the Pontiac Hospital Finance Authority. The hospital lost $13.4 million from operations in fiscal 2007, and had a meager 18 days cash on hand on Dec. 31, according to Standard & Poor's. The hospital missed a January 15 bond payment, which lowered its S&P rating on the series from B to D.

Executives say that they've been squeezed by their role as a safety-net hospital, which resulted in their spending $21 million in uncompensated care over the last three years. It hasn't helped that admissions have fallen from 7,600 in 2006 to a projected 5,000 this year.

Given these conditions, North Oakland execs are in talks to sell the facility to one of several local chains, including Henry Ford Health System, Trinity Health and William Beaumont Hospitals.

To learn more about the hospital's fate:
- read this Crain's Detroit Business piece (reg. req.)

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