LRGHealthcare yesterday filed for chapter 11 protection, the latest hospital chain to succumb to disruptions from the novel coronavirus, Bloomberg News reported. The company has a stalking-horse offer from Concord Hospital Inc. for Lakes Region General Hospital, Franklin Regional Hospital and the hospitals’ ambulatory sites, according to a statement. The group plans to conduct a sale process and auction for the assets. The pandemic has pushed a cohort of struggling U.S. hospitals into deeper financial distress as they cope with the cost of care and precautions, a slowdown in profitable elective procedures, and a loss of lucrative privately insured patients. The American Hospital Association released a report in July from Kaufman, Hall & Associates that estimated as many of half of U.S. hospitals could be losing money by year-end. Population shifts from rural areas have also pressured many institutions. Problems at LRG, which listed liabilities of more than $100 million, began many years before the virus gut-punched the U.S. economy. Previous managers invested in inpatient care at a time when “patient demographics and medical trends indicated more reliance on outpatient services and decreased hospital use,” according to a court declaration. Costs rose, reimbursements fell, and it lost patients to other communities. The Laconia, New Hampshire-based company made extensive cost cuts, including eliminating more than a fifth of its workforce, but found that the reductions “did not result in profitability or sustainability.”
