Chicago’s Mercy Hospital and Medical Middle 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 providers whereas it winds down as a full-service acute care hospital.
Till its anticipated ultimate closure date of Could 31, 2021, Mercy will proceed to supply fundamental emergency remedy providers, diagnostic imaging and care coordination providers.
WHAT’S THE IMPACT
Within the submitting, Trinity referred to as it a “tough determination” 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 median of $5 million a month, in line with the submitting. Trinity estimates that it’ll price between $90 million to $115 million to restructure.
Regardless of the losses, Trinity doesn’t anticipate it’s going to have a “materials antagonistic impact on the monetary situation of Trinity Well being or the Trinity Well being Credit score Group,” it mentioned 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 setting and a failed $1.1 billion plan to type 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 may supply pressing care, diagnostic providers and care coordination.
However late final yr, Illinois officers from the Well being Services and Companies 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 utility to construct the Mercy Care Middle. Critics argued that the outpatient facility wouldn’t be an equal substitute to the full-service hospital.
Regardless of the pushback from the overview board, Trinity stays dedicated to its closure plan and mentioned it anticipates the Mercy Care Middle will open in 2021. There will likely be one other assembly with the state overview board on March 16.
Trinity can be going through monetary hardship as a result of COVID-19 pandemic. Final July, it mentioned it expects to suffer revenue losses within the neighborhood of $2 billion throughout fiscal yr 2021. In response, the system mentioned it was pursuing cost-cutting measures together with eliminating positions, shedding staff and increasing furloughs and scaled-back working hours.
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