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Hospital seeks bankruptcy protection from vendors and creditors

Providers in all industries may experience financial struggles, yet if there were one sector which Manchester residents would assume may be immune from money problems, it might be healthcare. That assumption likely comes from the notion that no matter how bad of a state the economy may be in, people will always need to seek medical treatment. While that may be true, hospitals and medical centers are business in-and-of-themselves, and often provide services at a much higher cost than that which they receive in insurance reimbursement. Thus, it may not be too outlandish to hear of a hospital seeking bankruptcy protection.

Such a case is currently happening in Oklahoma, where a medical center is filing for a Chapter 9 bankruptcy after listing over $16 million in debts with only $50,000 in assets. The CEO of the public trust that operates the facility described the decision to seek bankruptcy protection as an effort to buy time to develop and implement a long-term plan to help the hospital once again achieve financial stability. In her comments, she cited the fear action being initiated against the facility by unpaid creditors and vendors as the reason why the hospital board agreed to take such a step right now.

If a business as seemingly stable as a hospital can experience debt issues, then one may rightly claim that any other can, as well. Just as the administrators of the facility mentioned above believed that bankruptcy would allow them the time needed to resolve their financial issues, so too might other business owners wanting to deal with their debts while still staying in business. Those representing companies wanting to take this step may wish to consult with an attorney to discuss their options before doing so.

Source: Becker’s Hospital CFO “Oklahoma hospital files for bankruptcy” Ellison, Ayla, Jan. 12, 2017

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