Chicago’s Mercy Hospital and Medical Heart filed for bankruptcy this week after it incurred greater than $30 million in losses since final July.
The hospital, which is owned by Trinity Well being, will discontinue its inpatient acute care companies whereas it winds down as a full-service acute care hospital.
Till its anticipated ultimate closure date of Might 31, 2021, Mercy will proceed to supply fundamental emergency therapy companies, diagnostic imaging and care coordination companies.
WHAT’S THE IMPACT
Within the submitting, Trinity referred to as it a “troublesome resolution” to file for Chapter 11 chapter however pointed to the continuing monetary struggles of the hospital. Mercy’s monetary troubles started earlier than COVID-19 and the pandemic exacerbated income struggles.
In the course of the first six months of fiscal yr 2021, Mercy misplaced a mean of $5 million a month, in line with the submitting. Trinity estimates that it’s going to value between $90 million to $115 million to restructure.
Regardless of the losses, Trinity doesn’t anticipate it would have a “materials adversarial impact on the monetary situation of Trinity Well being or the Trinity Well being Credit score Group,” it stated within the submitting.
THE LARGER TREND
Final July, Trinity Well being announced plans to close Mercy, citing greater than $100 million in renovations wanted to maintain the hospital a secure care surroundings and a failed $1.1 billion plan to kind the South Facet Coalition.
Additionally included within the closing announcement was the choice to rework Mercy’s care supply mannequin from an inpatient mannequin to an outpatient mannequin. It introduced plans in November to open the Mercy Care Center, an outpatient facility that might provide pressing care, diagnostic companies and care coordination.
However late final yr, Illinois officers from the Well being Services and Providers Overview Board voted to maintain the hospital from closing over fears that sufferers would lose entry to care in an space that already faces well being disparities.
The identical board voted once more in January to disclaim Trinity’s software to construct the Mercy Care Heart. Critics argued that the outpatient facility wouldn’t be an equal alternative to the full-service hospital.
Regardless of the pushback from the overview board, Trinity stays dedicated to its closure plan and stated it anticipates the Mercy Care Heart will open in 2021. There can be one other assembly with the state overview board on March 16.
Trinity can be going through monetary hardship because of the COVID-19 pandemic. Final July, it stated it expects to suffer revenue losses within the neighborhood of $2 billion throughout fiscal yr 2021. In response, the system stated it was pursuing cost-cutting measures together with eliminating positions, shedding staff and lengthening furloughs and scaled-back working hours.
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