Fairmont General Hospital files for Chapter 11 - Beckley, Bluefield & Lewisburg News, Weather, Sports

Fairmont General Hospital files for Chapter 11

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Fairmont General Hospital filed for Chapter 11 bankruptcy protection on Sept. 3 as part of its search for a strategic partner.

The hospital's administration announced last week that it would file for Chapter 11.

"Our ultimate goal is to make sure Fairmont General will be healthy, strong, and well-positioned to thrive and provide quality care in this community for generations to come," J. Michael Martin, chairman of the Fairmont General Hospital board, said in a statement issued last week.

The board sought reorganization through bankruptcy court "so that we can move forward in fiscally preparing the organization to best negotiate a partnership from a position of strength," Martin said.

The filing was made in U.S. Bankruptcy Court for the Northern District of West Virginia.

Fairmont General Hospital is a private, non-profit, community hospital founded in 1939. It has a staff of more than 700. 

"Throughout the Board's research, discussions with potential partners, and consultation with hospital financial advisors, this move emerged as the clearest, fastest path toward completing a partnership in the near future," the hospital said in its statement made last week.

"Specifically, Chapter 11 will allow Fairmont General to restructure long term debt and contracts, and bring costs in line with local, regional, and national norms in the healthcare sector."

The statement also says Chapter 11 allows the hospital to renegotiate contracts with both its employee unions.

Last week, Kathy McCormick, executive vice president of SEIU District 1199, said, "On behalf of the over 300 employees of Fairmont General Hospital represented by SEIU District 1199, let me first say that we are committed to working with hospital management to preserve quality care and services that this community relies on.

"In the spirit of cooperation, we call upon the management of Fairmont General Hospital to sit down with employees and their representatives to discuss ways to improve hospital operations. Not all of the answers or the best ideas come from the Board Room. If hospital executives are as committed to the future of Fairmont General Hospital as the employees are, they should listen to what workers have to say as well."

Financial reasons are driving the search for a partner, the hospital's statement said.

"It is increasingly challenging for hospitals like ours to remain financially strong for the long term," the statement said. 

"So far in 2013, at least nine hospitals have filed for Chapter 11 bankruptcy. These numbers continue a trend in the last several years, with 13 reported in 2012 and seven in 2009. In these cases, some hospitals are filing as part of a strategy to find a partner."

Fairmont General's acute care patient discharges are up nearly 12 percent over the same time last year, and its net patient revenue is up $5 million, the statement said.

"While those are positive results, it's not enough to sustain us for the long term or to avoid today's action," the statement said.

"It's harder than ever before for independent hospitals to thrive while trying to go it alone. Partnerships with other hospitals and systems have become increasingly important."

In a time of large-scale health care reform, hospitals need greater efficiencies and better coordination of care across provider organizations, including hospitals, physician practices and insurance providers, the statement said.