The board of financially troubled Greater Southeast Community Hospital in Washington is mulling partnership or buyout offers as it tries to avoid closing the doors of the only facility serving the inner-city neighborhoods east of the Anacostia River.
Last week, a federal bankruptcy judge extended by one week the deadline for the hospital and its creditors to present a plan for keeping the 305-bed hospital open.
In the meantime, the hospital plans to name its interim management firm, Vector Health Solutions, a subsidiary of Brentwood, Tenn.-based Quorum Health Group, as the broker for a buyout or partnership deal. That decision was made at a board meeting last week.
The board's hand has been forced by the refusal of the District of Columbia government to offer any more financial assistance. The district government already has extended $8.5 million in assistance since the hospital and its parent, Greater Southeast Healthcare System, sought Chapter 11 bankruptcy protection in May (May 31, p. 4).
That decision also prompted Moody's Investors Services to downgrade $46 million worth of Greater Southeast bonds even further, to Ca from Caa3, and has put it on a watchlist for an additional downgrade. Moody's said a partnership that brings needed cash to the facility is "quite possibly" the best alternative for the hospital and its bondholders.
Paul Porter, Greater Southeast's vice president of corporate planning and development, said a creditor, which he wouldn't identify, had offered to extend another $12 million loan, provided the district would back the loan. The district declined to do so.
In refusing to offer any more assistance, the district government pointed to a standing buyout offer of $24 million from Doctors Community Healthcare Corp., a Scottsdale, Ariz.-based hospital chain which also owns 148-member Hadley Memorial Hospital in Washington.
Greater Southeast had rejected that offer initially because it questioned the financing of the deal, Porter said.
Doctors Community executives declined comment on the company's bid for Greater Southeast.