Becker's Hospital Review

11 CFO / FINANCE Quorum Health files for bankruptcy By Ayla Ellison B rentwood, Tenn.-based Quorum Health, which operates 23 hospitals in 13 states, announced April 7 that it filed for Chapter 11 bankruptcy. e company, a spinoff of Franklin, Tenn.- based Community Health Systems, said the bankruptcy filing is part of a plan to recap- italize the business and reduce its debt by about $500 million. Quorum said it reached an agreement on the plan with a majority of its noteholders and term loan lenders. "We believe the financial restructuring plan announced today will strengthen our business and enable our community hos- pitals to continue the important work they are doing in addressing the COVID-19 crisis, as well as serve their patients and communities," Quorum Health President and CEO Bob Fish said in a news release. Debtor-in-possession financing of $100 million will help support Quorum's op- erations during the bankruptcy process. A $200 million equity commitment from noteholders will also be funded upon completion of the bankruptcy case. "Our company has been transparent about the need to reduce the large amount of debt and the associated high interest rate inherited when Quorum Health was formed in 2016," a statement from Mr. Fish on the company's website read. "By working with key investors in advance, we have been able to utilize the rules under Chapter 11 and the U.S. Bankruptcy Code to recapitalize the company." Quorum said its hospitals will operate as normal throughout the bankruptcy pro- cess, which Mr. Fish said is expected to last two months. e company announced March 31 that it is delaying its annual report for 2019. Quorum ended the third quarter of 2019 with a net loss of $76 million on revenues of $420 million. In the third quarter of 2018, the company recorded a net loss of $54 million on revenues of nearly $461 million. n Tennessee hospital closes as several others struggle to stay afloat By Ayla Ellison P arsons, Tenn.-based Decatur County General Hospital closed April 15. It is the 14th rural hospital in the state to shut down in the last eight years, according to the Cecil G. Sheps Center for Health Services Research. The hospital closed after the Decatur County General Hospital Board voted March 31 to shut down the hospital. Though hospital officials hope to reopen Decatur County General, no timeline has been provided, according to FOX 17. When the hospital shut down, Decatur County became one of more than 20 counties in Tennessee without a hospital. Local residents now have to travel roughly 20 miles to the nearest hospital, which is a concern for the hospital's human resources director. "From a healthcare perspective, there will be many that won't be able to get to a hospital in time," Melinda Hays-Kirkwood, Decatur County General's HR director told NPR. "It's just going to be a tough situation." Since 2012, 14 rural hospitals in Tennessee have closed, and several others are in a fragile financial position. Nineteen rural hospitals in Tennessee are at high risk of closing according to an analysis from Guidehouse, a consulting firm. The analysis looked at operating margin, days cash on hand, debt-to-capitalization ratio, current ratio and inpatient census to determine the financial viability of rural hospitals. The Guidehouse study analyzed the financial viability of rural hospitals prior to the COVID-19 pandemic, and the authors noted that the rural hospital crisis could significantly worsen due to the pandemic or any downturn in the economy. n New York hospital to split with Ascension after 18 years By Ayla Ellison S t. Mary's Healthcare in Amsterdam, N.Y., will become an independent hos- pital after 18 years as a member of St. Louis-based Ascension, according to The Daily Gazette. There are several advantages to being a member of a large health system like Ascension, but being an independent hospital with a local board of directors is the best option for St. Mary's Healthcare, CEO Vic Giulianelli told The Daily Gazette. He said the hospital could save millions from the split. "When you belong to a system, there are system expenses, and upstate New York hospitals, like St. Mary's, are among the least expensive in the country and that gets back to where we reside and to where we deliver care, and the cost here has to be lower, because the [Medicare and Medicaid] reimbursements here are not stellar," Mr. Giulianelli told The Daily Gazette. St. Mary's joined Ascension in 2002. In 2015, the two organizations began ex- ploring opportunities for St. Mary's "to pursue a future apart from Ascension," according to a March 25 news release. "We believe this is the best approach for the individuals and communities St. Mary's serves as well as for its dedicated and compassionate associates, providers and volunteers," Ascension Executive Vice President and COO Craig Cordola said. n

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