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Leaders for Dickinson County Healthcare System in Michigan yesterday motioned to start the process of declaring for bankruptcy, Upper Michigan’s Source reported. The hospital board authorized the hiring of bankruptcy counsel so it can file for chapter 11 reorganization; the hospital plans to remain open and continue services. The board’s attorney says he could have a recommendation of counsel by the end of this week. The hospital says it is roughly $20 million in debt, but there is no immediate concern for not making payroll. Many unknowns are with pensions, as many concerned employees and citizens voiced their opinions yesterday. The unfunded pension liability of the hospital is about $17 million. The next Dickinson County Board meeting is scheduled for tomorrow.

Verity Health System of California Inc, a nonprofit operator of six California hospitals managed by billionaire former surgeon Patrick Soon-Shiong’s NantWorks LLC, filed for bankruptcy on Friday to help resolve a cash crunch while it seeks a buyer, Reuters reported. The health system’s bankruptcy filing follows a series of deals that left it saddled with more than $1 billion in pension liabilities and bond debt. Verity, which serves low-income communities in Los Angeles and San Jose, secured a $185 million loan to help it stay operational through the bankruptcy. Verity Chief Executive Officer Richard Adcock said he expected the operator to remain in bankruptcy protection from creditors for a couple years as it restructures and works with potential buyers. “We’ve had over 100 parties formally reach out to us,” he said of the sale process, which Verity started in July. He said potential suitors include large national operators, and could include deals for individual facilities.

Provant Health Solutions, weighed down by operating losses and deal-related debt, filed for bankruptcy in New York on Monday with plans to sell virtually all of its assets to a subsidiary of Quest Diagnostics Inc. for $27 million, the WSJ Pro Bankruptcy reported. Provant, based in Olathe, Kan., provides services that include sample collection, health-risk screening and on-site flu shots administered by independent contractors. Its customers include corporations and clinical-research organizations. Provant said it has 326 employees on its payroll but through a network of health professionals did nearly 1 million screenings last year. Provant and six related companies, including publicly traded Hooper Holmes Inc., entered bankruptcy with $24.4 million in debt, of which $17.6 million is a secured term loan owed to SWK Holdings Corp. of Dallas and $4.8 million is a secured revolving credit facility provided by CNH Finance L.P. of Greenwich, Conn. SWK specializes in providing financing to health-care companies, and the industry is also one of CNH’s main areas of focus.

Three Mississippi hospitals, their physician practices and a Tennessee parent company are filing for bankruptcy, citing more than $70 million in debts, the Associated Press reported. Curae Health of Knoxville, Tenn., filed for chapter 11 reorganization on Monday. The nonprofit company owns Gilmore Memorial Hospital in Amory and Panola Medical Center in Batesville, while it leases Northwest Mississippi Regional Medical Center in Clarksdale. Curae's Russellville Hospital in northwest Alabama is not seeking bankruptcy. Curae plans to keep operating the Mississippi hospitals until it can sell them, CEO Stephen Clapp said in court papers. The company has 1,245 employees, who will continue to be paid during the bankruptcy proceedings, Clapp said. Clapp added that past revenue and profits were high enough when Curae bought the hospitals in 2017 to pay off the money the company borrowed. But he said revenue declined and the hospitals faced higher-than-expected costs for electronic health records. He said that the company saw a cash crunch, with vendors demanding payment for lagging bills, which sparked the bankruptcy filing. The hospitals are the latest to struggle in Mississippi. Magee General Hospital filed Friday for Chapter 11. Five rural Mississippi hospitals have closed since 2013, while the North Carolina Rural Health Research Program says 87 rural hospitals have closed nationwide since 2010. Curae closed a hospital in Haleyville, Alabama, in January. Read more.

For more on hospital and health care insolvencies, be sure to pick up a copy of the ABI Health Care Insolvency Manual, Third Edition from the ABI Bookstore. 

Hospitals have been closing at a rate of about 30 a year, according to the American Hospital Association, and patients living far from major cities may be left with even fewer hospital choices as insurers push them toward online providers like Teladoc Inc. and clinics such as CVS Health Corp’s MinuteClinic, Bloomberg News reported. Morgan Stanley analysts led by Vikram Malhotra looked at data from roughly 6,000 U.S. private and public hospitals and concluded eight percent are at risk of closing; another 10 percent are considered “weak." The firm defined weak hospitals based on criteria for margins for earnings before interest and other items, occupancy and revenue. The “at risk” group was defined by capital expenditures and efficiency, among others. The next year to 18 months should see an increase in shut downs, Malhotra said. Read more. 

For more on hospital and health care insolvencies, be sure to pick up a copy of the ABI Health Care Insolvency Manual, Third Edition from the ABI Bookstore.