BY Fraser Tennant
Due to significant financial challenges largely beyond its control, healthcare provider Thomas Health has filed for Chapter 11 bankruptcy protection in order to advance its strategic alternatives, including restructuring options to address its long-term debt.
Despite the filing, the company is keen to stress that it is not closing its doors and that there are no planned changes to employment, services or how it delivers care to its patients. Furthermore, the Chapter 11 process is not expected to affect enrolment of patients or employers in healthcare plans throughout 2020.
“By addressing our debt structure now, we can secure the long-term future of Thomas Health,” said Dan Lauffer, chief executive of Thomas Health. “This is not a Thomas Health-only problem. Many hospital systems throughout the country are experiencing financial challenges and are now taking similar actions. We appreciate our community’s support as we continue serving the best interests of our patients, employees, physicians and all those whose livelihoods will be positively impacted by Thomas Health’s mission to each of communities that we proudly serve.”
A partnership built on the strengths between Thomas Memorial Hospital and Saint Francis Hospital, Thomas Health offers a range of patient focused service lines creating value for patients, physicians and payers through committed healthcare professionals delivering a compassionate exceptional patient experience, superior clinical outcomes and fiscal stewardship to enhance the health and wellness of the communities it serves.
However, like many hospital systems throughout the US, Thomas Health has been experiencing significant financial challenges, including: (i) an ongoing decrease in commercially-insured patients; (ii) Medicaid, Medicare and Public Employees Insurance Agency (PEIA) continuing to reimburse at levels below what it costs hospitals to provide such services; (iii) many patients being unable to afford their deductibles; and (iv) opioid/substance use disorder treatment costs being significant and often exceeding corresponding reimbursement.
Thomas Health senior management have been publicly discussing these challenges for several years and have made significant changes within the organisation that have saved the health system millions of dollars. For example, Thomas Health has merged duplicative services between Thomas Memorial and Saint Francis Hospital, consolidated both IT systems to an integrated platform, and built more affordable care clinics for non-emergent patients.
Going forward, Thomas Health expects the Chapter 11 process to strengthen its ability to meet the new healthcare payment realities and ensure its future.
News: Thomas Health board of directors vote to seek Chapter 11 protection