Last updated: June 06. 2014 1:52PM - 4147 Views
By - cwarner@civitasmedia.com

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UNION — The Union Hospital District will continue to serve the people of Union County and continue to pay its vendors even as it goes through the Chapter 9 bankruptcy process.

In a statement issued this morning, the district announced that, as of today, June 6, 2014, it had “filed a Chapter 9 petition in bankruptcy.”

The announcement stated that the “purpose of the filing is to seek an adjustment of the debts of Union Hospital District (including the four service areas of Wallace Thomson Hospital, Ellen Sager Nursing Homes, Carolinas Health Associates, and Union County EMS) under the supervision of the Bankruptcy Court.”

The press release further states that “it is expected that during the bankruptcy proceedings, the four service areas will continue to operate as normal and that the public will not see any change in the operation of the service areas. Union Hospital District also expects to continue paying vendors in the ordinary course of business.”

The announcement explains that “the driving force behind filing the petition was the lack of sufficient revenue to pay Union Hospital District’s debts in the ordinary course of business and accumulating trade debt. Union Hospital District is engaged in active discussions with its major creditor groups in an effort to reach a consensual plan to adjust its debts.”

Hospital District CEO Paul Newhouse said the hospital is $18 million-$20 million in debt which he said has accumulated over the past four-five years. Newhouse said most of the debt is owed vendors including a number of whom the hospital no longer does business with since it brought those services in-house in an effort to reduce costs. He said the district hopes to settle these debts during the bankruptcy process through negotiations and restructuring.

Wallace Thomson Hospital recently adjusted its workforce through a combination of layoffs and attrition including not filling some management positions as they came open in an effort to achieve further savings. He said the district is not anticipating any further personnel adjustments.

The State of South Carolina recently increased the yearly reimbursement the hospital receives for indigent care by $2.2 million and while this has helped, Newhouse said it has not covered the entire cost of indigent care. He said as a result the hospital continues to lose money through indigent care.

Newhouse said that the district is continuing to look at ways to reduce its costs while enhancing revenues and will continue to do this during the bankruptcy.

That process will include working an attorney to develop a plan to present to the court which deals with the hospital’s debt burden. Newhouse said the district’s current management will be doing this and will remain in place as will the district’s staff.

“For everyone within the organization and within the community, it will be business as usual,” Newhouse said.

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